In this episode, we are joined by Laura Legg, Director of Revenue Integrity Services at BESLER, to discuss the top revenue cycle vulnerabilities found in our recent research report with HIMSS Media.
Highlights of this episode include:
- Background on our study with HIMSS Media that identified current hospital revenue cycle vulnerabilities and opportunities.
- What hospital leaders identified as the top three biggest revenue cycle challenges facing hospitals today.
- Insight on payer denials and how hospitals are changing their approaches to the issue.
- What surprises were revealed by the survey responses from the research report.
- And more…
Mike Passanante: Hi, this is Mike Passanante. And welcome back to the Hospital Finance Podcast®.
This is the third podcast in a series looking at revenue cycle opportunities and vulnerabilities. And joining me again today to discuss specific revenue cycle vulnerabilities that we found in our new research report is Laura Legg, who is the Director of Revenue Integrity Solutions at BESLER.
Laura, welcome back to the program.
Laura Legg: Thank you, Mike. I’m happy to be here.
Mike: So Laura, from the research I just quoted, we asked respondents to tell us about some of the top vulnerabilities that they see in revenue cycle at their institutions. Would you mind walking us through what the results of those were in the study?
Laura: Sure, Mike. Well, the study with HIMSS Media of the top hospital revenue cycle leaders in over a hundred hospitals saw the three biggest revenue cycle challenges facing hospitals today as 1) payer denials, 2) reimbursement and 3) prior authorization.
But Mike, it’s also important to note that other challenges were noted. Documentation and coding was one of them. Health information systems was one. And of course, we know those don’t all integrate together, and that is an issue. Next came the issue of collections, then self-pay, revenue integrity, and also transparency.
So Mike, I guess we can draw from that just the knowledge that there’s no shortage of challenges in the revenue cycle. And I’m not surprised because we all know that work in revenue cycle what a complex system it is. The more complex a system is, the likelier to have challenges.
So, I really think, Mike, the key is how we manage them. Our revenue cycle management efforts are where an active revenue integrity department can really help.
So, hospitals and health systems really need to put together a work plan that’s going to take a really deep dive into revenue cycle processes, and really go from the front-end billing to claims management to actual dashboard reporting.
Mike: Good thoughts, Laura. I’d like to dive into some of the responses in a little bit more detail. One of the top challenges that our respondents noted from the survey was payer denials. In fact, that was the top challenge. So talk to us about payer denials and why you think that may be.
Laura: Well, Mike, all of us that work in hospital revenue cycle are aware of the rise in payer audits and payer denials over the last decade. It’s really easy for hospitals to be quickly overwhelmed with the number of just requests for records they get from payers as well as a number of denials and the resources required to manage those denials.
That’s why many revenue cycle leaders are moving their teams to a denial prevention stance, rather than denials management. Provider organizations are now realizing the importance of a proactive approach that prevents initial denials at the very beginning of the revenue cycle. And this does make sense because eliminating the traditional reactive approach is really a huge challenge and one that requires communication and collaboration among all departments involved.
The key is to find and understand the root causes. And that’s the key to denial prevention. Traditionally, revenue cycle departments focused on managing their own denials. But today, in the revenue cycle, really, we all need to have a good understanding of the entire revenue cycle and work proactively with patient access on the front-end, clear to billing on the back-end to resolve and prevent denials.
And I often get asked, Mike, by people, “Well, how do we do this?” Well, the very first thing you need to do is open up the lines of communication and get everyone working together. And that can be challenging. And that group really includes revenue cycle, health information management, clinical documentation, patient access, and on down the line. And so, creating that multidisciplinary team backed by executive support and assigned an owning area for each denial reason.
There’s just a number of questions that you could also ask as you get to those root causes. And one of them is: “What caused the denial? Who has responsibility for that piece? And what kind of processes do we need to change?”
Mike: Laura, were you surprised by any of the responses from the survey regarding the revenue cycle challenges that were noted?
Laura: Well, one big surprise for me, Mike, is I was just certain that charge capture would be at the top of those top three challenges because everywhere I go and listen to people and talk to people, they’re talking about charge capture. And it is very challenging.
We really can’t operate anymore on autopilot. And we kind of did that for a few years. But we really got to have a continuum now for each area of the revenue cycle and each role working together to be successful. If there’s any weak link in your charge capture process, there’s going to be issues.
It’s also really reliant, Mike, on system information flow and feedback loops. And this is why revenue integrity departments are making performance improvement a top priority.
And charge captures are particularly vulnerable because it goes across numbers—a number of clinical departments as well as financial departments.
So, just to talk a little bit, Mike, about charge capture itself, it’s really dependent on the accuracy at the facility charge master, as well as the training and skill of the staff that are assigned to do charge capture responsibility. So, this is an area that revenue integrity can really be a game-changer.
Throughout the patient encounter, charges have to be captured accurately. And charge capture is most typically handled by the clinical staff that have the least amount of revenue cycle training. And actually, charge master makes it easier for the clinical staff to get the charges right. And really, your revenue integrity plan should include a process for the charge master to review and update it annually. And then, a really well-defined education plan for that clinical staff that need to learn about charge capture, and of course, concurrent auditing…
And CMS’ new initiative—well, it’s not new now. But CMS’ initiative around transparency has added another layer of complexity to that charge master work.
Mike: Laura, one of the other items that made the revenue cycle challenge list was revenue integrity. Can you share why you think that would be?
Laura: I can, Mike. I’ve been working exclusively in revenue integrity for about seven years now. And I was happy to see that our survey respondents indicated that 47% of hospitals do have an established revenue integrity program. And it’s also important to know that another 41% have plans to establish one. So, revenue integrity is really growing.
Three-fourths of those adopters noted that their revenue integrity programs have had a positive impact on net collection, gross revenue capture, and reduction in compliance risk. So that’s really good news. And those are all really wins in the minds of your financial leaders.
Now, starting your revenue integrity function can be challenging because hospitals right now are dealing with a lot of competing priorities. And establishing that revenue integrity function does call for an additional need for highly skilled staff. So that can be an issue—and being able to come together as an organization and answer the question, “What is revenue integrity to us? And what are our goals and objectives going to be?”
But one thing, Mike, that I can share for certain with revenue integrity, one of the biggest challenges and needs is to have the ability to focus on breaking down department walls or silos to get a maximum benefit from enterprise teamwork. This isn’t easy when you consider the various specialty staff and functions that are going to be involved in revenue integrity.
But really, the best advice I can give, Mike, is for people to take the time to develop a good revenue integrity plan. And each of the stakeholders in the revenue cycle really need to be clear on their role in the overall picture.
Mike: Laura, pivoting a little bit, you recently did a webinar around DRG optimization. And in that webinar, you identified clinical documentation and coding as high risk areas. Can you tie in those two elements with the influence of revenue integrity departments?
Laura: I can, Mike. And in all the revenue integrity challenges we’ve talked about today, and they were on a survey, we know that clinical documentation and coding, there is a common theme. And that theme is performance improvement through auditing.
So, a lot of people told us they’re auditing. Our industry is well-versed in the need for auditing. For most revenue integrity departments, auditing across the revenue cycle concurrently is essential for their success and that errors can be caught on the front-end and corrected before claims submission. This also will lower their denial rate.
There’s just many, many benefits, including making yourself a smaller target for regulatory enforcement by maintaining revenue integrity and compliant billing. For years, we functioned under the pay-and-chase model. We’re really moving away from that. And that department that’s moving us is revenue integrity.
In 2016, CMS told hospitals they would be subject to lower additional documentation requests based on lower denial rates. So, that’s a real incentive to get those departments going. And we both know that coding and clinical documentation issues do account for a lot of those payer denials.
Mike: And Laura, today, we talked about several different items—a webinar that you did, a white paper, a body of research. For our audience, if you’d like to get a look at any or all of those items, you can head over to Besler.com/RI. Just click on the insights button when you get there. And you’ll have access to all of that information.
Laura, thanks so much for joining us today on the podcast and sharing your insights around revenue cycle challenges.
Laura: You’re welcome, Mike. Thanks for having me.