According to the American College of Healthcare Executives’ (ACHE) annual survey, financial challenges are the leading concern for CEOs and other executives in healthcare provider organizations. In 2009, 76 percent of respondents cited financial challenges as their top concern, showing no change from 2008. Implementations to achieve healthcare reform were a distant second. Based on these statistics, you may want to consider if a Revenue Cycle Optimization is a good idea for your organization. You can often find your answer by tracking your organization’s performance against pre-determined Key Performance Indicators (KPIs). Every organization uses KPIs to review their revenue cycle, and there are often one or more components of the cycle that fall outside of the pre-established norms.
Obviously there is more that should be taken into account, i.e. roles, processes and workflows, when making a final decision about your revenue cycle. KPIs are essential to revenue cycle performance monitoring, but establishing meaningful KPIs based upon known organizational optimal performance is a key that is often overlooked. Assessments can provide some idea of your revenue cycle’s general health, however, the things these assessments often identify are mearly the tip of the iceberg and indicative of deeper issues. You will want to review and analyze this information using Root Cause Analysis and KPIs, which will help you identify the cause of the issue and not just the sysmptoms. Another factor to keep in mind is the interrelationship of KPIs in the analysis process. Days in Accounts Receivable, Denials Percentage, Dollars in DNFB, etc. are good indicators of performance, but have limited use without more information. Monitoring the cost-per-collected-claim or denial-management-by-reason-code KPIs can be much more revealing about the true health of an organization’s revenue cycle. But we are getting a little ahead of ourselves.
You should view revenue cycle as one contiguous process, with interrelated and dependent activities.When conducting a revenue cycle optimization, our goals are to identify opportunities to reduce accounts receivable, accelerate cash collections, streamline the operational efficiency of revenue cycle functions, and reduce costs of operations.
Our approach is to review the entire revenue cycle: from registration and scheduling through the time the payment is posted. While we realize there are several processes that exist after payment processing or account status determination (Contract Management, Reimbursement Analysis and Management, etc.), we generally carve out these processes and treat them separately.
Current State Assessment
Before any optimization takes place, our team must thoroughly understand the current revenue cycle operations. Adept generally recommends that we perform an operational assessment, or current state analysis. Using our experience as a guide, we concentrate on the following areas and processes:
Bill preparation and Claims submission
Account Maintenance including cash posting and Remittance Processing
Bad Debt Write Offs and Recoveries
Health Information Management (Medical Records)
Information Systems and Information Management
When requested, we analyze staffing—division of responsibility, labor assignment, workload and throughput—and organizational structure across the revenue cycle flow. We can also review internal controls, the formulation and execution of relevant KPIs, the management of information throughout the cycle, and the formulation and execution of quality assurance performance loops.
Defining Scope, Approach, and Performance Criteria
The next step in our methodologies approach is to use the information derived from our initial assessment to plan areas of process improvement. We then execute the plan and make changes and monitor the ongoing success.
Using this approach, Adept consultants work with hospital management and staff to assess and diagnose issues related to the problems identified in the plan, then reach a mutually agreed-upon plan of action which addresses system, operational processes, information flow, performance monitoring, and policy issues. Upon agreement, the steps of the plan are implemented along with mutually agreed-upon measurement components. The implemented plan is monitored over time to ensure that expected outcomes are achieved. Any adjustments to system settings or operational procedures are made as necessary. Keep in mind your operations, clinical requirements, regulatory compliance and other things need to be integrated for a complete revenue cycle solution.