Blog, Revenue Cycle, Revenue Integrity, The Hospital Finance Podcast®

How HIM affects the revenue cycle [PODCAST]

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The Hospital Finance Podcast

In this episode, we are joined by Laura Legg, Director of Revenue Integrity Solutions at BESLER, to discuss the evolving role of health information management (HIM) in the revenue cycle.

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Highlights of this episode include:

  • Why the electronic health record has been instrumental in bringing together hospital finance and clinical teams.
  • How HIM professionals can play an important role in areas of optimizing cashflow, case mix index, and compliant billing.
  • What activities can improve operations and relationships between HIM and revenue cycle departments.
  • How revenue integrity ties into the efforts of both HIM and revenue cycle departments at hospitals.
  • And more…

BESLER has developed a suite of services to address common mid-revenue cycle concerns. Our Revenue Integrity Services can help your hospital capture more revenue and stay compliant.

Mike Passanante: Hi, this is Mike Passanante. And welcome back to the Hospital Finance Podcast®. 

Today, we’re going to be talking about the evolving role of health information management in the revenue cycle. And to help us understand more about that topic, I’m joined once again by Laura Legg who is the Revenue Integrity Director here at BESLER.

Laura, welcome to the show.

Laura Legg: Thank you Mike.

Mike: Laura, you’ve worked in health information management pretty much your whole career I believe. So why don’t we start today’s conversation by talking a bit about HIM departments and what their primary functions are.

Laura Legg: Yes, Mike, I have been in the med revenue cycle in HIM for a long time. And the important thing to think about is that health information management departments are located right in the middle of a revenue cycle. So that really means that HIM can either serve as a bottleneck if it’s not efficient and well-managed. But a well-managed HIM department can serve as a hub for revenue cycle activities.

You know, it’s where we determine hospital reimbursement with code assignment. It’s where we send those clean claims to billing or we improve documentation and share completion of a record. And there’s also a lot of other responsibilities in HIM.

They really do play an integral part in the revenue cycle management.

Unfortunately, there’s been in the past the perception out there that HIM professionals just code which can lead to exclusion of HIM participation from a revenue cycle management team.

So, I would just put out there that it’s really important for HIM directors to become fully educated about the revenue cycle management process in order to join the team and really contribute to it.

So, some of the typical functions within HIM that we’ll talk about today are reconciliation of accounts versus documentation noted, the order and timeliness of the processing cycle of records, of course coding, physician query processes, internal and external coding accuracy audits. And HIM also does request for records and documentation externally.  

Mike: And Laura, as you intimated, HIM’s role is changing within the revenue cycle. Can you talk about those changes?

Laura Legg: Well, in the past, Mike, some of the HIM professionals really took a backseat to their involvement in the revenue cycle. But that really changed with the implementation of the electronic health record.

The electronic health record has really been instrumental in drawing revenue cycle departments together as well as drawing together the finance and clinical teams.

So, it was really challenging in the beginning, the transition for HIM because, really, just getting revenue cycle, billing, finance, and HIM to speak the same language took a while. But we’ve made a lot of progress in the last 10 years.

Prior to the last 10 years, HIM’s involvement is almost limited to the CFO calling the HIM director every week and asking why the DNFB was so high. So we really have moved past that. That kind of put HIM directors on the defensive to try to find answers to some of those questions. But now, HIM professionals are more active participants in revenue cycle on many fronts.

So, not only do they prioritize their own department efforts, but they contribute across the revenue cycle and really look beyond their own departments.

So, the real challenges lie in what somebody referred to as the “white spaces between the org chart.” So the inter-departmental challenges with HIM and revenue cycle really include duplication of effort, overlap of responsibilities inter-departmental problems falling through the cracks, isolated islands of knowledge. And a big one, Mike, is information systems that don’t integrate across departmental functions.

And of course, that one I mentioned earlier, we don’t understand your language barriers.

So, really, we spent a lot of time in the last 10 years just breaking down those silos which can be very difficult. But I see many organizations who are being or have been successful at breaking down those silos between revenue cycle and HIM.

Mike: Laura, where should HIM focus their efforts for supporting the entire revenue cycle team?

Laura Legg: Well, Mike, at the top of the list is always improvement of the discharge not final bill file; and of course, accounts receivable. They’re essential to the healthy revenue flow.

But there’s many other initiatives where HIM professionals can play an important role. They’re really an important part of the revenue cycle team and should be involved in most of the improvement initiatives.

One of the things that’s happened over the course of the last 10 years, Mike, is that web-based remote coding has really brought in those long success stories around lowering the DNFB.

HIM professionals can also become invaluable to the organization by understanding and contributing more to the revenue cycle functions. And this really now replaces those defensive responses we used to have with CFO’s.

But I would say I think that the three most important areas are optimizing cashflow, optimizing case mix index and compliant billing.

Mike: Laura, what are some of the activities to improve operations and relationships between the revenue cycle and HIM departments?

Laura Legg: Well, there’s really three top activities I would recommend, Mike. And they all revolve around communication which is probably not a surprise to any of us.

The first is a formal cross-departmental group or team that addresses revenue cycle management issues. Some hospitals have reported establishing standing committee specifically to address revenue cycle improvements. Committee membership should be broad and should include clinicians, business office, quality staff, and HIM professionals and even more depending on your facilities.

And this group should address a wide range of topics, including defining the revenue cycle, establishing roles of various departments, monitoring performance and problem-solving. So that’s a really important one.

The second one also, Mike, that we don’t want to forget about is those informal cross-departmental communications. This can be very successful. Even if you don’t have a formal committee, informal cross-functional teams can really help.

One hospital reported at AHIMA last year that the assistant HIM director and business office manager were meeting regularly to approach clinicians regarding issues surrounding clinical documentations required for coding. So that’s just one example where that cross-departmental communication can be so important.

And the third, Mike, is really having HIM participate in various standing committees that are important to the revenue cycle. This seems to really have a positive influence on the revenue cycle management team when they all work together.

So, examples of that, those standing committees, Mike, would be the chargemaster review committee and denial teams. These committees would permit input from HIM and also help HIM professionals better understand revenue cycle management in our hospitals.

Mike: Laura, what are some of the KPI’s for revenue cycle teams that they track that HIM can help influence or drive?

Laura Legg: Well, Mike, I always try to be really careful in recommending KPI’s. And the reason for that is every facility is so different. But before I would recommend any KPI’s, I would specifically advise the revenue cycle team to assess their current operating levels and see what really requires improvement and focus your efforts there. Target and monitor those areas.

For years, I think we got wrapped in to do quality. But now, revenue integrity and revenue cycle teams doing KPI’s are really focusing on where the greatest need is.

But some of the areas I have seen often that have key performance indicators for revenue cycle are value of discharge, not final bill cases, not to exceed two days of the average daily revenue—that’s an important one—AR days not to exceed 60 days, bill hold days set at four days post-discharge.

And that really has tightened up. It used to be five to six days post-discharge. But now, often, we’re seeing hospitals have a goal of four days. And so that’s a really important one.  They use those four days to gather all of the charges and ensure some of the internal operations. But really, to have that bill hold not be any longer than that.

And then, to have the late charges that are gathered not to exceed 10% of the charges is important.

And then, of course, we have to also look at the entire revenue cycle from beginning to end when we’re assigning KPI’s. So one of the goals I always have for our clients is accurate registrations no lower than 95% because, really, the quality and accuracy in the revenue cycle really starts upfront at the very beginning.

Mike: Laura, revenue integrity is a broad term that you use in the industry. Does revenue integrity tie into the efforts of both HIM and revenue cycle departments for hospitals?

Laura Legg: It really does, Mike. And really, the integration of revenue integrity into the revenue cycle has really brought HIM billing, finance, access, all of those departments together.

But with HIM being the most vulnerable part of the revenue cycle, they really can be a primary focus of revenue integrity efforts.

And revenue integrity really is defined in a lot of different ways, Mike. But most facilities are defining their revenue integrity process as the process that validates documentation, charges and codes really to ensure a complete, compliant, and accurate billing and coding process. So that’s really the internal process. And certainly, HIM as mid-revenue, it’s really important.

And so, a good revenue integrity team is going to include coding professionals, people from finance, people from billing. And as a group, they can identify lost charges and coding issues and provide education and development of processes to improve this part of the revenue cycle.

So, that’s kind of just a description of the revenue integrity. And it ties closely to coding and documentation.

Really, for healthcare providers these days, to survive the surmounting financial and operational pressures of our changing environment, both clinical documentation program and coding processes have to be connected to the key services within revenue cycle including revenue integrity.

So, it’s really important to have that ongoing teamwork between coding CDI and revenue cycle. And that can really create a great opportunity for a facility’s revenue cycle to thrive.

Mike: Laura, what are some of the common issues that you find your team is helping HIM in revenue cycle teams at hospitals with?

Laura Legg: Well, my team at BESLER really provides multiple different services that can help within revenue integrity. But probably our focus, Mike, is in DRG validation and compliance because those are such important functions and fit right within the internal revenue integrity teams.

So, instead of trying to take over a facility’s revenue integrity team, we really try to go and work with the internal team and enhance it.

We also can provide auditing as well as in-patient denial services for facilities.

Mike: All problem areas… and certainly, we’ve done some research to that effect which shows that those areas are very vulnerable, right?

Laura Legg: Absolutely, coding and clinical documentation. Without internal or external auditing and constant performance improvement, there can really be a revenue leakage if you’re not careful.

Mike: Laura, thank you very much for coming by and sharing your expertise on this topic with our audience today.

Laura Legg: Oh, it’s been my pleasure, Mike. Thank you for having me.

Mike: Visit for additional resources related to today’s episode and other helpful information about revenue integrity.

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