Margin, Mission, Mindset: Healthcare Organizations Take on Another Priority—Protecting Their Patients’ Financial Health

This article is the first in CVB's "2020 Vision: What Does Operational Excellence Look Like?" roundtable series. Here we focus on revenue cycle management.

Facing vacillating operating margins, U.S. healthcare systems are looking to pull every lever available to secure their fiscal health. This reality isn’t all that unique. Across most industries, smart businesses survive by earning (and collecting) dollars from consumers, reducing their operating costs and managing their portfolios wisely. What sets healthcare apart from many industries is that responsibility for their consumers’ health is baked into their mission. And, now, amid skyrocketing costs, payers strategically shifting financial liabilities to their beneficiaries and policymakers abuzz about surprise billing, healthcare organizations are feeling mission-bound to tackle the task of protecting their customers’ financial health as well. 

Anthony Cunningham, MBA

Anthony Cunningham, MBA, spent nearly two decades engineering revenue cycle transformations for a variety of healthcare clients before joining Wake Forest Baptist Health in Winston-Salem, N.C. Now the health system’s vice president of Patient Financial Services, Cunningham is among those looking at all the levers his team could pull to ensure the organization collects the dollars owed to it. The options before him include those that rose to the top when CVB and the Association of Academic Surgical Administrators (AASA) conducted a survey on operational priorities: documentation and coding, payer mix, charge and benefits capture, authorizations, preregistration and reducing denials, among others. He’s focused on building efficiencies into the system but says any conversation about revenue cycle must include how to safeguard patients’ financial well-being while also furthering the organization’s mission and protecting its margin. 

Cunningham helped CVB kick off a year-long series on operational excellence in healthcare by moderating a roundtable on revenue cycle management. Here are excerpts from the discussion.

Upfront strategies

Cunningham: As healthcare revenue cycles continue growing in complexity, hospitals and practices are facing many challenges affecting our ability to collect every dollar owed for services. One major headwind is increasing patient liabilities due to payers shifting more responsibility to our patients as well as significant numbers of uninsured patients presenting for services. The third largest payer behind Medicare and Medicaid is now self-pay. 

This is why, at Wake Forest, we’ve reevaluated our uninsured discount and charity care policies and set goals that include meeting all of our patients’ individual needs. We recognize that we must deliver high-quality care while also offering lower-cost options to help protect our patients’ financial health and fulfilling our fiscal responsibility to the organization. 

For our uninsured patients with urgent/emergent needs, we’ve developed a process where our uninsured patients receive an episode of care where services related to the episode of care are adjusted for charitable care contributions. We’ve infused nurses into the process to provide this episode of care that aligns with why the patient was, or is, being seen. The episode of care then drives charitable adjustments as the patient moves forward. This approach allows us to help our patients from a financial health perspective while also meeting our mission without further impacting the overall margin, as the goal for charity care is to have funding to support the right patients at the right time for the right services.  

What are some challenges your organizations are facing related to collecting self-pay dollars? How are you helping to minimize fiscal risk to your organizations?

.Caudill: I'm sure we’re not unique in that we take care of the poorest of the poor, people no one else wants to see. We have an open door for care regardless of the patients’ ability to pay. The challenge isn’t just the uninsured; there’s also significant backend responsibility for insured patients. That’s a double-edged sword: The payer mix improves thanks to these patients’ commercial payers, but the out-of-pocket liability continues to grow, which potentially increases our bad debt. 

This creates layers of problems, and addressing them is difficult. Over the last year, we have tried to update the qualification criteria and levels of discount in our charity policy. We’re working to shift the collection process to the front end for some of our surgical cases. First, we want to work directly with our patients’ insurance companies before procedures. Second, we’re trying to understand each patient’s liability up front. And, third, we’re aiming to settle up with patients on the front end of services instead of waiting on the back end for everything to clear through the third party and subsequently through patient billing. 

Of course, we also are paying as much attention as we can to co-payment collection for routine office care and the like. Those are smaller dollars, but they add up over time. 

These are significant changes because historically we haven’t done much collection effort on the front end, at the point of care, for truly uninsured patients. Our mindset has shifted toward working more closely with the patient counseling group and getting their feedback. For example, they can tell us the patient qualifies for an 80 percent discount, so that should prompt us to attempt those collections on the front end. This hasn’t moved the needle significantly, but every little bit helps. 

Cunningham: Are you going to be standardizing the entire estimating process for your scheduled patients as well as your unscheduled patients? 

Caudill: Mainly for scheduled patients. We’re focusing first in the orthopedic group but, if we can show positive impact at this specialty level, we could expand it. But right now the emergency department is out of scope.

Buckio: We also are the state hospital, so our charity care policy covers a great deal. For many of our patients, it’s about timing. If we haven't tried to prescreen before a major inpatient stay or procedure, then the patient won’t yet have the debt that would help them qualify. In an effort to find every bit of help for them, we are doing prepaid collections for major procedures. We’re first running them through a vendor’s propensity-to-pay software. 

This means the financial counselors will know in advance which folks have the ability to pay before we ask them for a copay or co-insurance. We then can change the approach for patients who are just getting by. We are asking our financial counselors to do the heavy lifting on this, but they have become the safety net. 

For inpatient stays, we have financial counselors and a nurse going through the accounts, talking with patients and trying to collect all of the paperwork to work through the complicated process for Medicaid eligibility. If they’re not eligible, we want to get right on the charity care paperwork so they don’t leave the hospital with a huge bill. They will at least know an estimate of the total financial obligation. We're trying to get in front of the service and give the patient information—it’s a kinder, gentler way to provide healthcare. 

Cunningham: Exactly. I’ve noticed that some organizations try to go too fast in this space—from collecting nothing up front to suddenly executing a policy of trying to collect co-pays, co-insurance and deductibles. That really dissatisfies the patient. In my experience, step one is patient education and communication. If you can let patients know up front what their out-of-pocket responsibility may be at the time of scheduling and/or per service, then at least they’re making an informed decision before service is rendered for elective care.

Wendt: To the point about educating and informing patients—that’s where the time-intensive resources should focus. The University of Colorado and Children’s Hospital Colorado both have financial counseling groups that will help patients qualify for another insurer if they meet the eligibility requirements. 

Our practice plan recently implemented PARO Presumptive Charity Scoring. If we know they’re coming in and they’re not going to pay, then it’s written off as presumptive charity instead of going to collection. We’re trying to mitigate some expenses that way.

We’ve begun doing estimates up front so patients are more informed when they arrive at the hospital. The more the patients understand about their out-of-pocket obligation before they receive care, the better. 

Lowering cost-to-collect through efficiency 

Cunningham: Considering that it is becoming more complex to collect each healthcare dollar owed, it is imperative for organizations to identify methods to become more efficient with the revenue cycle. Exception-based processing can be helpful here. In the past, I’ve used bolt-on technology and next-generation patient management billing systems, such as Epic, to drive work to staff based on need. This works well in the preregistration space as well as in authorization and referral management, and is especially useful in cardiology, where most patients require authorization. You’re ensuring that you understand the rules associated with authorization needs so that, when you’re looking at your financial clearance staff, you are getting the greatest value—they’re not just working on accounts to determine that no authorization was needed. 

It’s also difficult to preregister every patient prior to each encounter. Focusing on efficiency, how can we get around that? One thing that works very well is using technology to determine when there are discrepancies between the information in your patient management system vs. what the insurance company has. This knowledge ensures you’re correcting that information not only so you get paid, but also so you can communicate other issues to patients. To avoid compromising workflow, you rely on your front office staff to complete registration or verify information at time of presentation. 

What have you done in your organizations to improve efficiency measures and achieve lower cost-to-collect metrics over the long term?

Caudill: At the University of Kentucky, we’re somewhat challenged with centralization as it pertains to several of these aspects. We have a central call center for our main appointment line and triage lines. The call center also does preregistration. The call center agents preregister patients using as much information as they can gather from the patient followed by electronic verification of coverage. This is how we ensure that what is in the insurer’s system matches what we have in our registration system. Then, when the patient shows up, the registrars at the point of care validate what we have and finish the registration.

We touch and complete about 90 percent of the preregistration for new patient appointments at the central call center, so it certainly helps the flow. However, being centralized introduces other challenges. For example, there’s little accountability back to that layer, so there can be issues with accuracy and the correct information being uploaded into the respective systems. 

We also have centralized processing for our major procedures in the operating rooms. This can be good from workflow and resource stand-points, but they’re disconnected from department operations and/or the specialty layer or service line. You lose the vested interest in being accurate and ensuring that what you’re doing on the front end sets the stage for a clean bill to go out and be collected. 

We also have third-party billing in accounts-receivable work management through our foundation. We rely on them to communicate back to our team about what isn’t happening accurately and completely. 

We’ve recently tried to centralize a lot of the authorizations. We don’t do that as much on the surgical end, just because of the information that is necessary, so we do that more locally now. A lot of the quicker, easier billings get shifted over to the central area for processing. That has helped to alleviate some of the burden on the back-end clinical staff and to shorten the timelines. 

Cunningham: Have you thought about incorporating a full or more robust registration process as part of scheduling? It could accelerate the process. 

Caudill: We have, but there are two main challenges. Allocating resources to the front end for that and getting incomplete information from the patient. For example, daughter calling for Mom without full or accurate information. That takes us straight back to the resources challenge because someone would have to reach out to that patient on a secondary call. So, at this point, we have not shifted it to the main front end of this process. We are relying on when patients show up at the clinic to fill in the gaps. 

Buckio: We don’t have a single call area for appointments; it’s more by subspecialty. At the front desk registration, there is electronic insurance verification through Epic that allows us to do some validation when patients check in. 

All of our authorizations are now done centrally. One of our hospitals was doing a particularly good job in this area, so we had my financial counselors join with them. They all are trained to get multiple CPT codes authorized, even if it’s not in Epic. That puts us ahead of the game and has cut some denials. We did hit some hurdles related to Epic, but you find those things, you fix them and move on. 

Wendt: At the University of Colorado, we have the cardiovascular center, which is centralized to the hospital call center and does all of the initial intake of nontraumatic patients. Within the Department of Surgery for the cardiothoracic team, we have centralized surgical schedulers whose main focus and priority is to ensure that all of the registration, verification and authorizations are obtained for everything that will be part of that case. That may be a little unique. 

The Epic information feeds over to our practice plan, which uses Centricity (GE Healthcare). If an authorization is obtained but it’s not put into the correct field, it doesn’t necessarily interface. 

Our schedulers will input and verify the information in Epic. It is then locked when it goes over to our practice plan. They do a second set of verification validation. We rely a lot on our practice plan to come back and let us know if there are registration issues. But I do think we haven’t really figured out the best way to share that information back to the hospital and determine whose information is right. 

While we’re improving at using Epic’s new modules and insurance carrier portals for getting the most up-to-date information, our schedulers are still taking the information from the patient every time they see them. Our biggest challenge is with authorizations. The CPT codes have not kept up with the medical technology. So, we have a large issue with unlisted codes to report services that don’t actually have a recognized code. 

Caudill: I’d agree with that. From a surgical standpoint, we hold those a little more tightly at the practice level. We have surgery coordinators for scheduling and coordinating pre-operative clearances and the like. They also are responsible for getting authorizations. It’s very inefficient, but we’ve found it’s still better to spend a little more time on the front end. In fact, we call and/or electronically request authorization on every case—even if the payer’s website says preauthorization isn’t required. That’s because we’ve found we still get denials, so we log the attempt (at least) for every single nonemergent case we perform. That puts an extra time burden on those coordinators, but the result is at least somewhat better on the back end, even if it’s just a little easier for the foundation to resolve that denial and ultimately get paid. 

How are others handling that? We certainly aren’t implementing efficiencies or technologies in that area. It's just trudging through and taking one for the team to mitigate some of the back-end problems. 

Wendt: It takes a lot of time to have resources in place who know what the clinicians are doing and to be able to understand insurance carrier “speak.” Unfortunately, whether it’s patient education or continued education for the schedulers and the providers, we are putting more time-intensive resources up front. They are calling the insurance carriers, explaining the case and trying to get the codes authorized every single time. We’re trying to get smarter about this, but often the surgeons don’t really know until they get in there exactly what they’re going to be doing. We’ve done some studies so we know, for example, 75 percent of the time, they also do this code, so we’ll add that on just for good faith. 

Caudill: And if the surgeon doesn’t do it, then no harm, no foul. 

Wendt: Right. And we document everything really well in the EHR. Who did we speak with? What is the reference number? And then, if something changes, we can go back and say we spoke with this person on this date and they told us no authorization was needed. 

Prioritizing relationships

Cunningham: Many of us are doing a lot of the process and people improvements needed to tackle the issues we’re facing. As we all get more mature in this space, we might be able to engage with payers to leverage direct feeds and batch processing for eligibility, for example. Those things might eventually help with the costs we’re incurring to collect dollars for the services our providers are delivering. 

We could talk for days about how to minimize denials for interoperative procedures—where you schedule one thing and get it authorized but then the clinician does two or three different things. How do we really minimize our financial risk in those very common scenarios? Part of it is to have a great partnership with the clinical team so they begin flagging those and then we are able to leverage technology to push those to our financial clearance team prior to billing.

It’s about developing better relationships with our payers and embracing technology to help. That’s how we’ll take some of the grunt work off of our people and use them to do the tasks that add long-term value. 

Caudill: So, we need to push the envelope. Some might be hesitant to do that because interfacing with the payers isn’t their job. Well, yes and no, because the more we can support each other, the better the claim we’re going to send out the door and the more we can help to resolve the things that are out of our control—such as the barriers to insurers paying. 

I suspect most of us are challenged with a third party that handles that transaction for us and often also the relationships with the payers. Anything we can do to enhance that relationship with both the billing foundation or third party as well as that interaction with the payers will turn out to be valuable for both sides. 

Wendt: Agreed, which is why we are trying hard to move forward with the clinicians’ involvement. As a coder, I have found that peer-to-peer interaction really helps. That’s when the clinician goes directly to the peer on the carrier side to explain what we are doing and the work effort involved—and sometimes to ask why there is no code to report it. This is where we can say, “With great respect, we know you have coding experts, but let us help you out with the clinical experts.” 

Caudill: Exactly! No one is going to care as much as you care. We had the same challenge and also are making progress with facilitating peer-to-peer interactions. 

Buckio: Providers are getting better at it, and they don’t mind doing it. We have one of their nurses set up the call for them, so it’s not as disruptive to them as it could be. 

Better coding through communication 

Cunningham: In revenue cycle, things seem to change based on the times. When I started in revenue cycle, it was all about how to become more effective with accounts-receivable follow-up. Then things shifted to prevention and enhanced patient access, and then to patient experience—how to do everything up front to prevent denials. 

Now, there’s a push on improving documentation to better reflect all that was performed in hopes of receiving payment for all services provided. To that trend, at Wake, we are exploring how we may be able to use machine learning to help with clinical documentation processes. Querying records is time intensive, but it has the ability to provide optimum results. If we’re able to identify records where there are documentation gaps, we could have our clinical documentation nurses query those charts to the physicians, who could then update the documentation based on the evidence in the chart. 

There are solutions available that use algorithms to identify the charts where it looks like there’s a high likelihood that a query to a provider regarding additional documentation could lead to a more accurate DRG or even improving quality. What have you tried or considered trying to improve documentation?

Wendt: Timely documentation to the highest degree of specification is my expertise, so I have been asked to figure out how we could improve documentation to benefit the department. We now cover billing practice auditing and compliance education as part of each clinician’s onboarding. It’s general training, meaning it’s for all specialties and whether the clinician has years of experience or is just out of training.  

We’ve also tried implementing quarterly, department-specific new faculty meetings where coders address documentation questions. We ask about the Epic templates they need and show them how we can build something specific to their specialty to reduce the administrative burden on them. 

We’re currently lacking the right resources to trend out documentation for billing optimization. But we do have the practice plan’s audit, compliance and education team who will perform a new provider audit after 90 days. They can go back to specific providers with documentation education if needed. 

Buckio: Our onboarding also includes compliance; however, our compliance group only reviews E&M charges. We had optimal coding when coders were embedded in the department, just around the corner from the physicians. It was easy for them to run around the corner and say, “Hey, I just looked at the codes that you put in for my case that I did Tuesday, and I think we’re missing something. Can we sit and talk about it?” The coder got a quick education on the case and was able to make corrections pre-bill. As we’ve gone to the EHR and gotten bigger with more hospitals and more centralization, the coders are no longer with the physicians. We still try to keep the communication open, and the coders will come to the physician anytime, but you never get the value of that proximity back. 

We also offer templates. We try to arrange a mentorship situation for new clinicians, so someone can walk them through how to code non-routine cases. Our physicians have become good at asking for help because they feel like somebody is looking out for them. They know it’s helping to bring in revenue, so they see it as less of an annoyance than in the past. In inpatient surgery, we have a nurse coordinator who goes back through the day’s cases and sends coding queries to us each day. I wish we could have a resource like that on the outpatient side. When we find something we’ve missed, we have an analyst go back and pull all of those types of cases for the past year. It’s retrospective—prospective would be better—but it helps.

Cunningham: Is there a tight link between the coders and the clinical documentation team from a learning perspective? You could have a couple of people who identify clinicians’ behaviors and then use the querying process to educate as well.

Buckio: They do communicate, but it’s not as tight as it could be. 

Caudill: I would agree. It’s a parallel process that rarely intersects. 

Buckio: We tried it but couldn’t keep it going. 

Wendt: It’s the same for us, which is unfortunate. Now we’re in the world of telework, so how do you retain excellent coders when they want to be working from home even though the physician wants them around the corner in the office? And if our coders are just going to be centralized in a separate building, they are for all intents and purposes remote, so why not let them work from home? 

Charge capture: Policy, process & penalties

Cunningham: Let’s turn to charge capture. In my experience when you have a tight policy and process for measuring and monitoring your charge capture, you can achieve two aims. First, you ensure you’re capturing all the charges based on the services rendered so you can optimize revenue. But more important is the compliance aspect—it ensures you’re consistently charging the same amount for a service across patients. What have you done to enhance your charge capture processes? 

Wendt: We have a billing practice guideline that all services must be documented within 24 hours. I meet with each new clinician and talk through the best practice for charge capture and the department’s expectations that they will not have delinquent documentation. This goes to the citizenship category on their annual evaluations. One of our sections has implemented a penalty for delinquent documentation, but the other seven specialty divisions aren’t currently doing that. They’re focused on it as a best practice. I also try to meet with clinicians who tend to be more often delinquent to see if there are things we could do to help them.

Caudill: For that documentation expectation, is it the note itself as well as the signature within 24 hours? 

Wendt: We consider it finalized when it is signed, and that’s supposed to happen in 24 hours. There isn’t a ticking clock, but the EHR will let them know if their encounters are open. 

Caudill: We have a 10-business-days/14-calendar-days expectation. And it is punitive. If it goes beyond the 14 days and the note is finalized after that, they do not get RVU credit for that service or procedure. If it’s Medicare, we don’t bill for that service, so it is lost revenue on the professional side as well. This has been in place for about a year and is across the entire enterprise. As you can imagine, it has not been very popular with our faculty. 

Buckio: Ours is on a practice plan level. The stated encounter benchmark has to be closed in eight days, but stated preference is for three days. For inpatient, we have not nailed down what that metric should be. For OP notes, it’s 24 hours. We report those monthly and send emails to each faculty member. Every month, I can track and know exactly who is at risk for the citizenship portion of their incentive program. They forfeit everything at that point if one of these metrics is outside stated goals. We try to help them along the way, but there is accountability. 

Caudill: This year we added that 98 percent of their notes have to be completed within the 14 calendar days or they forfeit participation in the productivity incentive for that quarter. It’s fairly liberal, but it’s the first time we’ve had any kind of baseline behavior tied to overall participation. So, there is a punitive direct impact on a case-by-case basis as well as an overarching impact that we’re still reviewing. Even if they lost 50 RVUs, if they didn’t hit the 98 percent threshold, they’re forfeiting the participation. 

Integrating with the clinical team 

Cunningham: In some circles, people view the revenue cycle as apart from clinical operations, where the revenue cycle’s purpose is to enable clinicians to practice medicine while the revenue cycle figures out how to collect the dollars for those services. There’s also a belief that, to have a highly functioning and effective revenue cycle, clinical integration is paramount. What are your thoughts on this philosophical difference as it relates to creating and fostering a culture that understands the importance of revenue cycles, and what is its place in your organization?

Buckio: Clinical operations and revenue cycle must be connected. The revenue cycle group does not have the in-depth knowledge of care delivery to do their job to optimal effectiveness without the clinical team’s input and partnership. I meet with the revenue cycle team every month to review all of the surgical division’s coding, billing and collections. They willl say, “See, you’re down here and up there,” and I will respond with, “Let me tell you what is going on in that area.” They handle many services and hospitals, and it is difficult to know everyone's business, so they count on me to explain what they don’t know. We must have that partnership or they will not be successful, which means we will not be successful. 

Caudill: I couldn’t agree more. Even just integrating on the back end and being more engaged with the providers could help solve some problems. Most clinicians will get involved if we simply ask them. They understand that we’re all participants in a game with many players. It’s not just about biller and payer. We start the service, and everything is predicated on what we do from there on—if the documentation is weak or is missing information, for example. But at the end of the day, the clinicians are the only ones who know what they did or didn’t do and how best to argue it. All of the pieces in the middle must work together in tandem to make sure that we’re playing the game appropriately and doing our part. 

Buckio: What I have seen over 20 years is that, when claim representatives first were embedded with the department, they were afraid of the physicians. They didn’t want to ask them to tell them more about how they did a procedure. My very senior surgeons weren’t used to being asked such things, but today’s new physicians are happy to answer questions and engage on that level.

Caudill: I would go a step beyond that. They’re not just happy to do it; they expect it. They desire to be part of the process. Some would say, “If you’re not coming to me, that’s a problem in itself.” 

Wendt: In many cases, they are teaching physicians, too, and, if those coders or their partners can get in front of them, they are willing to teach. And most coders want to learn; they’re curious people. 

I would reiterate that it is so important to have those partnerships. While we know the partnerships are always changing, it’s the constant focus on sharing information so that we can use the resources the best way that we can.

Caudill: And, with our centralized approaches, creating those relationships is so much harder today than it used to be. 

Cunningham: Exactly. And it’s funny, the reason I asked the question is that—like you, I’m sure—I get calls from vendors trying to sell revenue cycle support services. Their parting line usually is, “Hey, we will take care of everything else, and you won’t have to worry about it.” That’s basically the wrong message. 

Caudill: Right, that’s the wrong pitch, thanks for calling. 

See the related story: Bring on the Bots: Introducing AI into the Revenue Cycle

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