Optimizing Revenue Cycle Performance for Hospitals and Medical Groups

Episode Overview

Transcript:

Daniel J. Marino 

Welcome to Value-Based Care Insights. I'm your host, Daniel Marino. In today's episode, we're going to spend a little time talking about denials, denial management, and some of the things that are impacting revenue collections, both from a hospital and physician standpoint. You know, as we've talked about in this program many times, denials and, and how organizations manage denials, how organizations manage the collection activity, even the claims processing with their payers. Some folks do very well, some folks are very challenged, and certainly over the years, it's become even more challenge for, for health care providers to really manage through the different rules, the different collection activities from payers and so forth. And especially as we've become more sophisticated, or maybe complicated is a better word, on different types of coding documentation, the requirements from the plans, what we're seeing is that there's a continued variation in the number of denials where rejection of claims are occurring and so forth.  

 
And it certainly becomes a problem for a health care organization. It was a problem before covid, and, and it continues to be a problem, certainly as we see more and more plans, more and more products coming into the market with different types of requirements. So here today to talk about this, I'm really pleased to have Tina Hodges, Michael Brown from RSM and they are the practice leaders of their revenue cycle practice., I've known RSM for a number of years, does a fantastic job in helping organizations work through a lot of their revenue cycle activities. Tina, Michael, welcome to the program. Thank you, Dan.  

Tina Hodges:  

Thank you, Dan. Thanks for having us.  

Daniel J. Marino: 
 

Yeah. Maybe we could start with you know, organizations and they've struggled with, with denials for, for a number of years, right? Revenue cycle, although it's some areas have continued to improve, others have, have other areas of the revenue cycle continues to, to struggle. What do you see are some of the biggest revenue cycle challenges that are, are facing hospitals and medical groups today?  

Tina Hodges:
 

Sure. I'll kick it off, Dan. I completely agree with you, those of us that have been in revenue cycle over the years, this has always been an area of opportunity, but agree with you that I think it's, it's expanding in volume. I think the number of denials that are coming back has expanded, and I think it's expanded across service lines as well., so meaning, you know, different clinical areas that are rendering services, it's expanded. And so keeping up with the volume of the denials in both in and and denials are twofold, right? So there's opportunities to rebuild. It's that component of going through the volume and keeping up with the volume is understanding what the done denial is, correcting the claim and resubmitting of course within timely filing parameters with the payers. And you kind of said to it, you know, the number of plans that are expanding across payer plans. So, number one, it's understanding do we understand the timely filing parameters, the windows to appeal for those plans? And again, correcting the claim and getting it out on time so you can still recoup those revenues., you also alluded to it, I think, is there's the labor shortage. So obviously, you know, that's a dangerous recipe, if you will, that we have increased denial volumes and less people perhaps to work through those denials., so obviously that's a, a point of difficulty.  

Daniel J. Marino:
 

Yeah, I agree. And especially when you, you know, it's complicated to begin with. There's a lot of rules. The rules continue to change. And, and then as you mentioned, you factor in the labor shortage it makes it a lot harder. But, but I'll tell you, I often say that, you know, denials work in denials, you got to do it, right? Because that's how you get the door, the, the dollars in the door and so forth, but it doesn't fix the problem, right? Right. The denial, the reason for the denial occurs way before you, you get the denial. So how do you work with organizations to help them understand maybe, you know, without getting too technical, where's the root cause analysis? Right? What's really driving the denial or the rejection,  

Tina Hodges:
 

Right? Right. Michael, I'll pitch it over to you, but I think that's a great point, Dan. And I think we talk about this all the time, that there's a fundamental difference between mm-hmm. <affirmative> denial management and denial prevention.,  

Daniel J. Marino:
 

Yes, good point. Mm-hmm. <affirmative>. Yeah. Michael, so what do you see, I mean, how do you, in terms of reporting, how do you help organizations understand where the, where are the causes?  

Michael Brown:
 

Yeah, great question, Dan. I think you're asking the same thing that most health systems and health care providers are today, is how do we digest all of this information that's coming to us while we're still trying to tread water, keep oxygen into the practice, keep the money coming in, how do we do this? And so really understanding not just the volume of denials, but the root cause of the denials is really important. So it's looking at who are you getting denials from? Are you getting them from a specific payer? Is there an issue with that specific payer that's more global than just you? Are you having an issue with a specific service line in your organization or a specific provider? Are you having an issue with, at potentially a new service that you're offering, and maybe you aren't complying with current regulatory requirements for coding or for documentation. Really digesting that information really from all sides is critical. And having a tool that can help you make all of those connections, to have the insights to say this, this is where we can take action. This is where I need to put change in place to drive denials down and relieve the pressure on the staff is really key for organizations.  

Daniel J. Marino:
 

Well, no doubt about that. And I've said time and time again without good data, without good information, there's no way you can really identify where the problem is occurring. I can remember a few years back I was working with the CFO, great guy, and, you know, he was on top of his revenue, his contractual allowances and so forth, and they had negotiated some new contracts. A couple of them were Medicare Advantage contracts, and they had noticed that their rejections, even some of their contractual allowances were increasing, some of, even their write-offs were increasing. And he said, you know, we didn't do anything different in our operations. And he had just a tough time figuring out, well, what's the cause of this? Well, as we started to get data, low and behold, you know, the, the health plan, and particularly in this case it was Medicare Advantage, changed some of the rules and the requirements about pre-authorizations, right? Mm-hmm. <affirmative>, but we didn't know that. And if you don't have the data, if you don't have the information, that helps to connect the dots between what the payers require and what the, your operations are doing, that's at least some of the, where I see some of the rejections occurring. And I would imagine you guys deal with this all the time.  

Tina Hodges:
 

Yeah, I would agree with that. I agree with everything both of you said. And I think another challenge in a way that we still help providers is that root cause analysis is, it spans the entire revenue cycle and often can cross over into clinical workflows. And so the question always comes, okay, we know denial management, we know who frequently owns that to resubmit the claims, right? That's in pfs or in the billing office in the backend, if you will. But this prevention part, it's like, well, who should own that? Because determining root cause, you're going to have processes on the front end within patient access, registration, scheduling eligibility, that's driving some of those denials. Mm-hmm. <affirmative>, you could have an encoding, you know, which is the middle. And so I know we've said this for years, but unfortunately, we still see those silos within the revenue cycle.  

So, you know, front end revenue cycle, patient access can be a silo. Then you have the middle and then you have the back. And so it really is more of an operational kind of creating a cross-functional team across that revenue cycle and meeting regularly having an owner that's key. Like, who owns the meeting? Who's going to own the issue tracker? Who's going to document what we know today? Cuz oftentimes folks have to go back and do some homework, do some research so who really owns the meeting? The issue tracker, holding people accountable and just continuing to work through the data and the information that's available and solve for that root cause. Right. And then once you know what it is, it's the whole team coming together, perhaps, and implementing the fix. And, you know, and then the, the fix often crosses over with it because hopefully we can fix it with technology and not manual processes. But I think that's another key point is if, if organizations don't have that cross-functional team, it's absolutely imperative.  

Daniel J. Marino:
 

Absolutely. And it needs to be integrated. I love what you said about breaking down the silos mm-hmm. <affirmative>, because if you're truly going to improve and optimize your revenue cycle, it has to span all of the operations from the clinic to how you're dealing with the patients to the collections. But, you know, I guess as you were talking about that one question came mind, where do the physicians fit in? How do you engage the physicians in improving the revenue cycle activity? Or do you see this as just being an outside administrative function?  

Michael Brown:
 

No, definitely not. I think the physicians play a big part in ensuring that they understand changes potentially in payer authorization requirements or medical coverage guidelines so that they can make informed decisions about how they need to document and to ensure that what they are documenting will pass any kind of test that you may be facing with the, with the payer to seek an authorization Yeah. For following appeal.  

Daniel J. Marino:
 

Yeah, I agree with you too. And you know, a couple months ago, we had a conversation around physician compensation. And one of the things that my guests at the time, it was a physician brought up, was that they were on a hundred percent r b model, and the physicians had an tendency to, don't want to say over bill because I don't think that that's what they were doing, but they weren't basing their billing and collection on the collectability of the activities that were occurring. So, you know, I think the more that you can engage the physicians in being able to be part of the solution per se, as you said, Michael, work on some of their documentation, work on correct coding, it just helps the organization all the way around.  

Tina Hodges :
 

Absolutely agree. And things like that come into play often, even with me with medical necessity, right? So when a service is ordered for a patient's acuity is it going to be covered by the payer or not? And if not, has the conversation been had with the patient that they should sign to take on that liability? And so I've been in situations where the physicians or the medical groups, you know, the clinical leadership is completely out of the loop around deny denials and also write offs, right? So write and adjustments that are of a result of a particular physician or a particular specialty around ordering things for patients and really having no understanding that per medical policy, regulatory guidelines, the services aren't even covered. So I agree a hundred percent that very frequently when we talk to the physician groups, they're like, you know, I can't fix what, I don't have any understanding of that. I don't have any visibility. So it really does go back to that data and recording having it, but also make sure you're sharing it with all the key stakeholders.  

Daniel J. Marino: 
 

If you're just tuning in, I'm Daniel, you're listening to Value-Based Care Insights. I'm here today with Tina Hodges and Michael Brown, practice Leaders in Revenue Cycle that work for RSM, having a great discussion around denials and the impact of denials on your revenue cycle. You know, Michael, you had brought up something around the technology and about the reporting given the labor shortage. And, you know, it's a challenge for everybody, right? It's a challenge in clinic operations, it's a challenge in the business office. How do you begin to incorporate technology or where do you start? I'm thinking about technology to create efficiencies, you know, clearly it's not going to take the place to having people in the business office, but are there ways to use your technology to create efficiencies? So maybe it helps you get through some of these labor challenges that we're having. Mm-hmm.  

Michael Brown:
 

<affirmative> That's a great question and a great point. Oftentimes we think about, well what do I need to acquire to meet the needs of the business today? Sometimes it's a matter of asking, what do I have that I haven't maximized that I could be using today? And so part of that is really understanding what your capabilities are within your current EMR or billing platform, or what's available to me in the clearing house that digests our claim data and sends that out to the payers that we could use to help drive business decisions and relieve some of the pressure on the staff. And, and so that's a good place to start. It's really understanding what you have, what are there maybe elements that you haven't activated simply because you didn't think it was important at the time you implemented 2, 3, 4 years ago, and maybe it's, maybe it's needed today beyond the, the EMR and beyond the billing system, looking at what you have available to you from a business intelligence perspective. Are there, do you have access to the kind of information that you need to gain those kinds of insights? You know, then, then, and only then really can you start looking at where do we need to plug these gaps? Yeah. What do we not have capabilities of doing today that we need to look outside for?  

Daniel J. Marino:
 

It seems to me, you work more in the space than I do, but it seems to me in interacting with a lot of the hospitals and health systems, the EMRs and the practice management systems today are really limited in their business intelligence. I've seen when you, at least the organizations that I've worked at who I would consider best practice revenue cycle operations, seem to have some type of an external BI tool that really helps to create some sophisticated analytics you know, and, and insights that really inform the revenue cycle leaders as to what they need to do. Do you see the same thing or is it just maybe that organizations just don't know how to use the data or the reporting functions of the practice management systems?  

Michael Brown: 
 

Yeah, software vendors are catching up at this point. I think you're probably right in that what they have today are reports, right? And they're singular reports that they then have to try and absorb and try to make sense of, and figure out how all these things connect together. There are very few that have really good, what I would call dashboards, things that are taking all that data and putting it together in a way that helps you gain an insight. But that's not the majority of the market right now. And a lot of software vendors are really playing catch up.  

Daniel J. Marino: 
 

Yeah. 

Tina Hodges:
 

I would agree. And if I would add, we have this conversation frequently is that there's really, there's not a limit of data in health care, right,  

Daniel J. Marino:
 

<laugh>. That's true. That is very true. <laugh>, right? So we have more data, we know what to do with  

Tina Hodges:
 

You got it. So it's the opposite. Data is coming in from everywhere. It's coming in from payers, it's coming in from quality, you know, organizations. It's just, it's coming in everywhere, but the difficulty is pulling it together in a way that's meaningful and impactful for the provider. Excuse me. And I think that's what Michael is talking about. Now, some platforms do better than others. Mm-hmm. <affirmative>., but most often they cannot accommodate what we just said. If you have a data warehouse where all of this information and data is coming in, that's great. At least you have it coming into somewhere. Sometimes they don't. So it's a matter of going in and pulling all that data, putting in a warehouse, pulling it out of the warehouse, and again, making dashboards that are meaningful for the users. And, and many organizations still struggle with that. I've seen a lot of movement over the last 12, 24 months around that., but I think it's still an opportunity that organizations are struggling with.  

Daniel J. Marino:
 

Yeah. Oh, I absolutely agree. And like you said, if you don't have a way of creating strong analytics, strong insights, you know, you can have all the data you want, right? It just doesn't mean anything. Right. So let's work through something here, because this is a question that comes to me all the time, and I'd love to hear how you guys answer this. Many organizations struggle with understanding whether they're getting paid according to their contracts, and there seems to be always a disconnect between who's negotiating the contracts and the rates, and then the collection of those activities, as you're working with organization, what approaches do you give to providers or how do you ensure that the, what I call the collectability or the collective versus what you should be collecting, you know, is at that 99 or a hundred percent figure? What do you do? How do you help organizations kind of understand where to start and whether they are getting paid appropriately?  

Michael Brown:
 

Yeah, I'll start, Tina, so I think it really depends on what they have access to and the capabilities of their system. So I think on the surface, if they do not have a contract management tool, and then they have no way of maybe digitizing what they're expecting in collections and what they are receiving in collections, I would start with kind of a high level analysis of, what are your expected reimbursement rates from an aggregate level by payer by maybe service type, right? Right. Whether that's, you know, E&Ms versus whether that is some diagnostic service or procedure. Start with that and really try to understand are there any gaps there that will get you part of the way., I think you still need to look for tools that will take you all of the way to really understand at a specific claim level, where do I need to challenge this payer for an underpayment, right? And an underpayment of a couple of dollars or in some cases, a couple of cents over the course of time really adds up. So it's Oh,  

Daniel J. Marino: 
 

It adds up. Oh, I couldn't agree with you more. You know we're working with the specialty hospital right now, and the big thing with them is the underpayment issues. And yeah, making sure you get paid correctly, it's such a challenge. Even CFOs sometimes are going to say, okay, well if I'm getting underpaid $50 or a hundred dollars, maybe I don't have to work it. But over time that adds up, no doubt about it.  

Tina Hodges: 
 

And I think you're spot on. It's the timeliness of it. I mean, I can't stress enough really, that contract management system to give visibility to the claim level is really best practice because, You know, we're in conversations about it's, all of the down coding that's taking place with certain payers in for the ED and urgent care, it is very high volume going on right now, and it's spreading across the payers. And this particular organization that we're working with, they don't have it at the claim level. And so they were making some assumptions based off of RVs and claims that were going out, but then, because they didn't have the claim level analysis months and months and months went by, and they didn't have visibility to all that down pointing that was going, that was going on, and those services were their bread and butter, mm-hmm. <affirmative>. So it really took them back and they didn't have the information, you know, that information is also incredibly valuable for contract negotiations with those payers. And if you're not armed with that information at the claim level to have it accurate at the claim level, when you're kind of rolling that up you're kind of coming in at a disadvantage.  

Daniel J. Marino: 
 

Yeah. You really are. Well, and I think your disadvantage is twofold. One, you're not able to get the collections you need, and then it affects your contracting.  

Tina Hodges:
 

Yep.  

Michael Brown: 
 

Right. 

Daniel J. Marino:
 

Yeah. So, if a CFO out there suspects that they have problems with their revenue cycle, right? And, you know, I'll bet you, you talk to nine, 10 CFOs, you're going to get probably 90% of them saying, yep, my revenue cycle isn't optimized. Where should they start to look? Or at least begin to evaluate one if they have a problem, but two, where do they fix it? I know it's kind of a big question, but I figured we good to throw it out there.  

Tina Hodges:
 

Sure. I can start, I think I would ask each leader of the revenue cycle depending, you know, normally you have a VP over all of it, and then oftentimes it's split into that front, middle, and back type of leadership structure. And I would start and ask each of those leaders to provide, what are they tracking from a K P I perspective right across the revenue cycle. There's industry used industry, common key performance indicators that we should be benchmarking across. And I think I would start there and say, Hey, can you share with me what you're tracking as far as performance goes? I mean, it could be lots of things, right? It could be collecting upfront, it could be denials, all those sorts of things and say, what are you tracking? And can you provide me a benchmarking to where we're today and where, what our goal is to get to. Because, you know, at least you'll know what are they tracking and are they tracking? Because if folks come back and say, oh, we don't have that, you know, I think that's a good place to start.  

Daniel J. Marino:
 

Well, I think that's great too, because then you're comparing yourself around to similar organizations, right? Mm-hmm. <affirmative>. And if you do it over time, then you can hold your revenue cycle people accountable as well, Hey, here are the benchmarks. Here's how we should be performing. If we're not performing, then there's a gap, right? So then building on that gap 

Tina Hodges:
 

All <laugh>, that's huge  

Daniel J. Marino:
 

We're not checking all, which is probably the case, but building on that, you know, Michael, from your perspective then, how do you integrate that into your operations?  

Michael Brown:
 

Yeah, you know, Tina alluded to this earlier, I think beyond the KPIs, I think the thing we need to understand is from a cultural perspective and from a standards of practice perspective what is the collaboration that's occurring, not just between the revenue cycle teams, but between the rest of the organization and the revenue cycle team, because everything that the patient accounting area is dealing with is a result of some breakdown in process or control upstream. And so really understanding where are they not collaborating and where are they not sharing information and being strategic in the way that they attack their problems is a good insight into where do we need to focus first? Yes, we need to make sure we are tracking the right KPIs, but also are we having the right conversations? Are we being strategic in the way that we're attacking this?  

Daniel J. Marino:
 

Yeah. No, that's great. Well, guys, this has been, this has been great. I really appreciate it. And as I said, I think this is, along with the labor shortage, is definitely a top of mind issue with many of our health care leaders and CFOs and many folks that are listening today. If you were to give any advice to some of our listeners, maybe we can start with you, Tina, as to how maybe they need to, either improve their revenue cycle or look at different things, any pieces of advice come to mind?  

Tina Hodges:
 

I think like really broad and high level, I would say, do you have confidence that you have the right people in the right roles working on the right things? I mean, again, I think it's a simplistic way of looking at it, but it's all about roles and responsibilities, performance. Mm-hmm. <affirmative>, do you have the right number of people, right? Everybody's looking at costs right now, and cost to collect is huge, because, you know, that's true. If you have double the number of people in your back office, then you really should have what's going on within your processes, what's going on with your technology. I think I would start there.  

Daniel J. Marino:
 

Yeah, that's a great point. And a lot of times that's the way people think about solving the problem, right? You just continue to add bodies. Michael, any other thoughts come to mind?  

Michael Brown:
 

Yeah, I think the challenges that are facing health care today and the labor market are not going away anytime soon. And so I think that the best organizations are already looking for ways to automate. So really evaluating automation opportunities is going to be key for long-term success.  

Daniel J. Marino:
 

Absolutely. I mean, you have to become efficient, and the only way you become efficient is really through the use of technologies. Well, guys, as I said, this is a really important topic, I know you all have done a great job over the years with this. If any of our listeners are interested in finding out a little more, either about both of you or maybe connecting with some questions, maybe learning a little bit more about RSM, Tina any information you could share with our listeners.  

Tina Hodges:
 

Sure. Thank you, Dan. Thanks so much again for having us, so there's our website, RSM, you can Google it, it'll come up. But in the absence of kind of clicking through where you can find Michael and I would say please send me an email, it's real easy. It's tina.hodges@rsmus.com.  

Daniel J. Marino:
 

Good. And yours, Michael,  

Michael Brown:
 

Easy enough. Michael.brown@rsmus.com.  

Daniel J. Marino:
 

Great. Well, thank you. And your email and contact information will definitely be in our liner notes, but on behalf of our listeners, guys, again, want to thank you for your time today. This is great. I want to thank our listeners again for listening in today, until the next insight, I am Daniel Marino, bringing you 30 minutes of value to your day. Take care. 

About Value-Based Care Insights Podcast

Value-Based Care Insights is a podcast that explores how to optimize the performance of programs to meet the demands of an increasingly value-based care payment environment. Hosted by Daniel J. Marino, the VBCI podcast highlights recognized experts in the field and within Lumina Health Partners