reimbursement operational efficiency · revenue cycle management versus revenue integrity for many...

Revenue Integrity: Why A Comprehensive Approach to All Revenue Streams Is Crucial To Your Bottom Line

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OperationalEfficiency

ComplianceAdherence

Reimbursement

SS REVENUE INTEGRITY


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Table of ContentsIntroduction 1

Revenue Cycle Management versus Revenue Integrity 2

Consider all three revenue streams 3 Front End – Patient Engagement 4 Mid-cycle -Revenue Recognition 5 BackOffice-BillingandCollections 6

Assessing your revenue integrity readiness 7 People 7 Process 8 Technology 8

Summary 9

About Hayes 10

Sources 11


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IntroductionFinancial challenges lead the list of hospital leaders’ top concerns in 2016, according to the American College of Healthcare Executives’ annual survey. Perhaps more critical was the fact that it was the twelfth consecutive year in which CEOs identified finance issues as their most pressing worry.1

That should come as no surprise in a time when healthcare organizations are facing shrinking top and bottom lines. The crushing weight of financial worries continues to increase because of the many challenges organizations face in a still-turbulent healthcare environment:

• Added pressure to reduce costs as the industry trends toward value-based reimbursement models

• Increased individual financial responsibility for healthcare costs making patient collection a key focus of revenue cycle management

• Organizational transition to more complex reimbursement models • Intensified oversight by private and governmental auditing agencies in-

creasing the risk of penalties and overpayments requiring reimbursement

For many years, organizations have been addressing this financial pressure by implementing revenue cycle management initiatives. These programs have helped organizations improve their performance by focusing on tightening existing claims and billing processes.

Hospitals and physician practices are coming to realize that such efforts largely focus only on a single element of the revenue cycle and that a more comprehensive view is required. This has resulted in a shift to revenue integrity, a concept that takes the entire revenue stream into consideration. The goal of revenue integrity programs is to optimize all three components of the revenue cycle – front end, mid-cycle and back office. The focus is not only on the individual aspects of each stream, but also on how the streams can work together to enhance revenue identification, collection and retention.

Moving to a revenue integrity program is an important step to maintaining financial viability in an environment of growing cost and revenue pressures. This white paper will outline why a revenue integrity program is important, what it looks like in operation and what you need to consider as you move toward implementing this initiative in your organization.


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Revenue Cycle Management versus Revenue IntegrityFor many years, Revenue Cycle Management (RCM) has been the cornerstone of healthcare organizations’ efforts to properly bill and collect legitimate reimbursement revenue. RCM is the process of managing the administrative and clinical roles related to claims processing, payment and collection. The process includes identifying, documenting and collecting patient service revenue.

RCM focuses on ensuring the transactions related to patient encounters are handled properly. It tries to ensure that documentation, coding, charge capture, billing, follow-up, payment posting and collections are carried out as efficiently as possible so that the organization can maximize its total revenue stream. The problem with most RCM programs is that they rarely connect the dots between the various departments that handle these different functions. Because of this siloed approach, RCM teams often end up dealing and fixing transactional errors on a case by case basis as they occur. This reactive approach often leaves gaps in the revenue cycle that may result in revenue collection shortfalls.

REVENUE CYCLE MANAGEMENT

VS.REVENUE INTEGRITY

Docu-mentation

CodingChargeCapture

BillingPaymentPosting

Collections

Docu-mentation

CodingChargeCapture

BillingPaymentPosting

Collections

Operational Efficiency • Enhanced ReimbursementCompliance and Revenue Retention


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Revenue Integrity programs, on the other hand, take a more holistic view of the revenue cycle. It evaluates many of the same people, processes and technology involved in RCM, but it goes a step further by understanding how these various disparate processes can be connected to optimize the entire revenue cycle.

The goals of a revenue integrity program are threefold:

• Increasing operational efficiency by ensuring departmental alignment. • Enhancing reimbursement collection by closing the gap between what

the organization is billing and the revenue that is ultimately collected.• Ensuring compliance to reduce the costs of take-backs and guard

against under payments.

According to a recent Healthcare Financial Management Association (HFMA) survey of 125 hospital and health system CFOs and revenue executives, only 44 percent of respondents said their organizations have established revenue integrity programs. The results of these initiatives illustrate how effective revenue integrity programs can be. These forward-looking organizations realized a 68 percent increase in net collection, 61 percent overall gross revenue capture and 61 percent reduction in compliance risk.2

Suzanne Lestina, revenue cycle technical director for the HFMA defines revenue integrity as “the right revenue, right delivery, and right protocols to ensure right (accurate) reimbursement and compliance.”

The HFMA further says that revenue integrity is meant to prevent recurrence of issues that can cause revenue leakage, revenue degradation and compliance risk. Integrity is the consistency of actions, values, methods, measures, principles, expectations and outcomes and is measured by the ability to achieve one’s own goals. The HFMA asserts revenue integrity can only be achieved with the proper processes, tools and related expertise aimed at effectively pricing, charging and coding for services and supplies related to patient care.3

Consider all three revenue streamsThe key to an effective revenue integrity program is to review, evaluate and optimize all three revenue streams – front end, mid cycle, and back office.


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Front End – Patient EngagementThe first step to revenue integrity is effectively managing the front-end patient engagement process. This is becoming increasingly important as more of the financial responsibility

shifts to patients. The complexities of eligibility and co-pays makes it critical that your processes for patient engagement at the front end are effective. Organizations who can optimize collections at the time of service significantly reduce the resources and effort required to collect fees after the fact.

Begin by assessing the front office processes, policies, workflows and systems to identify appropriate optimization strategies. The goal is to establish appropriate front end workflows and best practices critical to ensuring an efficient, streamlined revenue cycle. If you have multiple practice management and electronic medical record systems, it is crucial to find and leverage the key tools in each system.

Key focus areas in the front-end stream include:• Patient pay optimization• Effective patient bill estimation process• Efficient propensity to pay program (P2P)• Benefits/coverage verification• Patient liability determination• Comprehensive upfront collection• Appropriate financial counseling• User-friendly patient portal/online payment tools

Properly managing the front end is also a customer satisfaction issue - an important consideration in a competitive environment. Growing consumerism in the healthcare industry means patients now view themselves as customers who expect a positive interaction when they arrive for care. Recent studies have shown that satisfied patients are more likely to be loyal customers and stay with a healthcare provider. Retaining patients is becoming a critical component to preserving a strong revenue stream.

By optimizing the front-end process, you will realize increased collections at point of service, improved patient understanding and accountability, decreased bad debt and improved registration accuracy.


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Mid-cycle -Revenue RecognitionThe front and back end of the revenue cycle often receive the most attention when it comes to revenue integrity. However, it is in the mid-stream – the process that begins

with clinician documentation and ends with payer acceptance of the claim – where significant opportunity for improvement exists.

Accuracy is key in the midstream where even a one percent error rate can cost an organization millions of dollars. Assess current workflows, processes and technology to determine optimization opportunities. Potentially valuable midstream initiatives include Clinical Documentation Improvement (CDI) programs, Computer Assisted Coding (CAC) training, and Charge Description Master (CDM) improvement which ensure appropriate reimbursement.

Technology can also be an important element in optimizing the mid-cycle. The right solution can help manage the crucial coding and documentation process to identify anomalies and detect trends that are key to enhancing revenue integrity. Having dashboards and reports enable you to drill down into valuable data to study existing issues or prevent potential ones from occurring.

Key focus areas in the mid-cycle include:• Revenue optimization• Charging - including CDM and pricing• Reconciliation - including missing/unbilled charges• Coding assessment• Prospective auditing• CDI program management

The benefits of enhancing your mid-cycle include improved processes and workflows, optimized technology, improved coding and documentation and increased productivity.


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Back Office - Billing and CollectionsEnsuring smooth and efficient business office operations is critical to ensuring revenue integrity. Look to optimize business office processes and workflows to ensure claims

are processed properly and revenue is collected promptly.

A key component of the backstream is denials management. A first step is to evaluate your people, processes and technology to ensure a comprehensive program to minimize your denials. This involves comprehensive staff training, workflow review to highlight redundancies and potential errors that could result in denials.

The transition from manual to electronic documentation and billing has helped, but denial rates still consume an average of nearly three percent of an organization’s net revenue annually. In recent years, denials have grown to encompass 15-20 percent of the billing value of total claims. That can mean a $6 million hit for a 200-bed hospital to over $260 million for an 1100 bed facility.4

Technology plays a key part in evaluating and optimizing an effective denials program. You need ready access to source transaction data that allows you to initiate a data-driven, goal-centric denials management program. An automated audit workflow and analytics program enables you to overcome the disconnect between denial creation and root cause resolution. It allows you to move from simply fixing transaction errors to instituting long term corrective action process.

Key focus areas in the back office stream include:• Business Office optimization• Claim editing and scrubbing• Denials/rejections management including prevention and

remediation• Write-offs and fatal/technical denials• Underpayments/contract management• Patient self-pay/after insurance collection

A back office optimization results in improved revenue recovery from payers, enhanced cash flow, accelerated collections and receivables, identification of root causes for targeted corrective action and improved clean claim rate.


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Assessing your revenue integrity readinessThe first step in implementing an effective revenue integrity program is to evaluate the resources and infrastructure of your organization. Once you complete an assessment of your current situation, you can more easily develop and implement an action plan to get you where you need to be.

As in most significant initiatives, the key to successful implementation lies in the readiness of your people, process, and technology.

PeopleAs is the case when implementing any new project, it is critical to get everyone in the organization on board. That starts with clearly communicating the reasons behind the

program, why it is important and the roles of each individual in it. Assess the level of understanding of staff and implement training where necessary.

Many organizations are establishing manager and senior level positions to head their revenue integrity programs. Individuals in these roles are assuming responsibility for charge master accuracy, annual pricing and code set updates. Their focus is on improving revenue and ensuring compliance with federal, local and third party payer requirements. They must ensure required billing elements are in the system, paper and electronic encounter forms are kept up-to-date and used appropriately and new charge code requests are handled in a timely and efficient manner.

These leadership roles also take on the task of educating department heads as it relates to charge master issues and establishing policies and procedures to ensure an effective program.

Some organizations are reaching out to third party consultants to engage revenue cycle leaders to drive operational performance improvements, accelerate cash flow and reduce or eliminate inefficiencies causing leakage. These experts bring a fresh, objective view of the organization and can leverage experience gained from other engagements in which they have been involved. Third parties can offer a comprehensive suite of staffing solutions from optimizers to interim revenue cycle leaders.

The key is knowing the capabilities of your existing staff and supplementing your knowledge base as needed.


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ProcessMaintaining a strong revenue integrity program means coordinating workflows in disjointed departments to ensure a consolidated, effective effort to drive successful results.

Start by assessing your existing workflows and processes in all three revenue streams to identify areas of possible improvement, consolidation and streamlining.

Areas of focus should include:• Identifying processes that are disconnected• Reviewing current processes for managing audits and denials• Evaluating the process for communicating charge master and policy

changes• Assessing patient pay optimization processes• Examining revenue optimization in the mid-cycle• Reviewing business office optimization processes

Assessing current workflows and processes allows you to establish a corrective action plan that will set the stage for a successful program.

TechnologyLeveraging technology is key to implementing an effective revenue integrity program. The right technology allows you to set up and monitor scorecards to evaluate revenue cycle

KPI’s such as:

• Cash collections as a percentage of net revenue• Days in A/R• Volume of claims backlog• Unbilled (DNFB) charges• Payer mix changes• Bad debt as a percent of gross revenue• Registration error rate• Coding accuracy• Contractual adjustments compared to managed care contracts

Assess your systems and applications to determine whether they can support your revenue cycle’s front end, mid-cycle and back office streams by identifying areas of risk and preventing revenue loss. Your IT solutions should also be able to conduct continuous monitoring to drive ongoing performance improvement of billing, coding and collection behavior.


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Hayes’ MDaudit™ Enterprise - the industry-leading automated revenue integrity software solution is a closed-loop, cloud-based platform that supports the revenue cycle’s midstream and backstream by identifying areas of risk and preventing revenue loss. Through continuous monitoring, MDaudit Enterprise enables you to drive ongoing performance improvement of billing, coding and collection behavior.

MDaudit Enterprise’s Analyzer provides key metrics focused on current risk areas and allows you to monitor provider billing patterns and benchmark against peers. This helps you gain insight into compliance and risk and allows you to focus on underlying problems.

The ability of your systems to perform anomaly detection and minimize documentation and coding errors will allow you to retain more of your revenue. You need to be able to mine your organization’s billing and remit data to identify compliance and revenue risks. This is key to uncovering threats to your revenue integrity and developing corrective action plans.

SummaryImplementing an effective revenue integrity program takes your revenue cycle management to the next level and enables you to retain the revenue you worked so hard to earn. Comprehensive analysis and optimization of your processes from the first patient encounter to the billing office to the payer through to ensuring compliance is critical.

By analyzing and optimizing your entire revenue cycle – billing office, patients, payers, providers –you can realize actual bottom line improvements from 20% to 40%. Focusing on all three streams of revenue allows you to implement integrated improvements that will work together to streamline the entire process and ensure success.


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About HayesHayes Management Consulting is a leading, national healthcare technology enabled solutions firm that partners with healthcare organizations to improve revenue, mitigate risk and reduce operating costs to drive success in an evolving healthcare landscape.

Our Comprehensive Revenue Integrity Support Program – CRISP – marries our industry leading revenue integrity software, MDaudit with the financial acumen and deep seated experience of our revenue cycle experts to help organizations collect, find, recover and retain more revenue dollars throughout the entire revenue stream. CRISP has a demonstrated history of proven return on investment. Hayes has helped healthcare organizations realize 20 to 40% improvements in cost reduction, revenue generation and operational efficiency, saving them millions of dollars.

To learn how Hayes Management Consulting can help your organization, call 617-559-0404 or email [email protected]. www.hayesmanagement.com617-559-0404


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70 Walnut Street, Suite 200Wellesley, MA [email protected]

Sources1 Survey: Healthcare Finance, Safety and Quality Cited by CEO’s as Top Issues Confronting Hospitals in 2016, American College of Healthcare Executives press release, January 31, 2017.2 The Future of the Revenue Cycle, HFMA Magazine, June 20173 Revenue Integrity in Healthcare, Craneware website4 Hospital Denials Management…Insurance Outsource or Both, HumanArc White Paper 2013.

reimbursement operational efficiency · revenue cycle management versus revenue integrity for many...

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