Integrating Analytics to Improve the Revenue Cycle

Managing revenue cycles has become increasingly important with healthcare reform’s emphasis on value and efficiency. Analytics help medical systems know where they stand and how they can improve.

Two years ago, executives at the University of Mississippi Medical Center in Jackson began to focus on new reimbursement methodologies. They understood traditional revenue cycle metrics such as days in accounts receivable and coding data.

However, they knew that since the passage of the Patient Protection and Affordable Care Act (ACA) in 2010, there was more of an emphasis on pay for performance and outcomes. The Centers for Medicare & Medicaid Services (CMS) and other payers were basing reimbursement on the quality of care hospitals delivered and holding hospitals accountable for keeping patients healthy and penalizing them for readmissions.

Today, the medical center has adopted initiatives to adapt to the changing landscape, including its Clinical Documentation Excellence program that was launched in 2013. At the time, the director of revenue cycle and health information management, Leigh Williams, and other leaders were learning about CMS programs such as hospital value-based purchasing and readmissions reductions and educating anyone responsible for hospital chart documentation.

“The real challenge was how you transition that into some actionable items and tasks for clinicians to do to drive those outcomes,” says Williams, who now works at the University of Virginia. “How do you help, for example, orthopedic surgeons understand how the hospital readmissions reductions program may be impacting how their quality is viewed and what they’re getting for reimbursement? We had a lot of ‘aha’ moments where you figure out which service lines are heavily impacting which initiatives.”

The goals of the Clinical Documentation Excellence program are to support accurate, timely and complete documentation to help the center communicate with CMS and ensure it receives proper reimbursement. It also helps revenue cycle managers understand where they are competent and deficient and which initiatives to prioritize.

Better metrics, better money

Since the program went into effect, the cardiology practice has seen a 7 percent increase in its case-mix index, a hospital-based reimbursement metric which CMS uses to identify the average diagnosis-related group (DRG) relative weight for hospitals. The increase had led to an improvement in accurate diagnoses and cardiology-based reimbursement. The index also is used in quality measurements.

“Cardiologists were doing a good job with their documentation around the specialty they worked in,” Williams says. “They were good with their cardiology documentation. But we needed to work with them on capturing that full picture of the patient, getting the chronic diseases and other information about the patient that adds those complexities. That then puts them in a different DRG, and it gives it a higher weight.”

The medical center has seen improvements in heart failure diagnoses, as well. Williams and others implemented an initiative across the departments to educate providers on the importance of more specific diagnoses, particularly with ICD-10, which eliminates numerous unspecified codes.

Between September 2014 and March 2015, the Mississippi center reduced unspecified heart failure diagnoses by 78 percent.

“Getting them to more completely describe the condition the patient is in is helpful throughout all of the patients’ care,” Williams says. “The other providers that may be involved in their healthcare can get better, more clear and accurate information about what’s wrong with the patient.”

Clinicians continue to write operative reports and discharge summaries as usual, but they receive help on workflow adjustments for using EHRs and other initiatives. Executives also have designed and developed structured templates that remind and enable clinicians to write and document everything they do and appropriately complete the terminology.

“We have some workflow tools in our EHR that are real-time support for the clinicians to be able to remember and clearly document all of the admissions that they’re seeing,” Williams says.

The medical center's coding group then takes the documentation and provides data on DRG and Current Procedural Technology billing. Employees responsible for revenue cycle management analyze the claims data, which CMS uses for reimbursement.

“It’s not so much having doctors do anything outside of their normal workflows,” Williams says. “In fact, that’s one of the tenets of our program, that this is intended to be as soft and easy on the doctors as possible. It is designed to invent workflows that use existing behaviors and patterns and then just tweak them to make sure we’re getting good data capture.”

Getting paid faster

At Stanford Children’s Health, which has more than 100 clinic and practice sites throughout northern California, executives also used integrated analytics and tools to improve revenue cycle and deal with changes brought on by the ACA.

As recently as two years ago, more than 40 percent of Stanford Children’s revenue cycle management processes were performed manually. In addition, the practicing faculty physicians and community-based physicians were using different EMR systems and different revenue management systems.

Andrew Ray, the director of physician revenue operations, and others decided to evaluate the functions of staff members on a daily basis to determine which ones could be performed electronically and automated through the system. They changed their clearinghouse vendor and began using the Epic revenue management tools. Stanford Children’s now also manages billing, claims and payments in-house instead of outsourcing those functions.

The changes have led to substantial improvements, according to Ray. Under the old system in 2013, Stanford Children’s had 68 percent of its claims paid within 45 days of discharge, and it cost $12 million annually to collect payments. As of May 2015, it had 90 percent of its claims paid within 45 days.

Each week, Ray and his colleagues meet and discuss the top reasons for claims denials and try to figure out if there are routing issues and if they can put edits in place before sending a claim to payers.

“Those are the sort of things we want our staff working on,” Ray says. “Those things are a little bit more complex, take a little more thought to figure out what needs to be done. That’s a lot of the work we’re doing now, to continually improve and sustain what we’ve been doing.”

The new tools have helped Stanford Children’s deal with the changing healthcare industry and reimbursement models and integrate the physician practices it acquires.

“It’s positioning us to be much more proactive as those things come on because, to be quite frank, historically we’ve been reactive,” Ray says. “It’s just been, ‘OK, let’s get them on board and let’s start going and we’ll figure out what’s happening.’ The position where we are now, we’ll be able to be a lot more thoughtful with implementation of those things and be ahead of the game a little bit more.”