Revenue Cycle Risk Mitigation White Paper December 1 2010 Ver 1 2

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Healthcare Whitepaper Revenue Cycle Risk Mitigation New Strategies for Revenue Cycle Success

Version 1.2

12-1-2010

Foreword written by:

Lyman Sornberger, Executive Director

Patient Financial Services

Cleveland Clinic Health Systems

By: Phil C. Solomon iSolutions iQ

5620 Southwyck Blvd. Toledo Ohio 43614

800-673-1987


Table of Contents

Foreword 3 What is Revenue Risk Mitigation? 6 Background 6 Gain Best Practice Results Utilizing Operational Business Intelligence 8 Maximize Physician Charges by Leveraging Electronic Collaboration 11 Never Miss Another Medical Necessity Screening 12 Achieve Zero Registration Errors and Defects 12 Leveraging New Tools to Dramatically Increase Self-Pay and POS Collections 15 Summary 19


Foreword

The healthcare revenue cycle is now feeling the effects of consumerism

as employers focus on containing healthcare costs. How will providers

feel this shift in healthcare revenue cycle management or RCM? In

essence this means that today’s growing financial pressures on

healthcare organizations will continue to increase as consumers bear an

increased financial responsibility for their healthcare costs. Revenue cycle

solutions that extend the capabilities of your hospital information systems

are the key to improving access management, responding to healthcare

consumerism, enhancing cash collection, and improving payer

performance.

Improving Access Management The use of financial clearance solutions in your healthcare revenue cycle

enables you to determine not only insurance eligibility but also the ability

and propensity to pay healthcare services. Including medical necessity

checking during scheduling and registration can reduce denials and

increase revenues and decrease audits such as RAC and MIP. Enhanced

workflow processes and enhanced validity of eligibility and estimates is

the way of the future and clearly needed to respond to a very dynamic

health care industry, consumerism, and transparency.

Responding to Healthcare "Consumer Shoppers"

Patient shoppers or "consumerism" is now the standard and Financial

Counseling is critical to patient satisfaction and protecting the financial

stability for providers and their respective healthcare institutions. Access

to healthcare costs and patient’s out of pocket expenses are no longer a

"nice to offer option" but now is a customer expectation. Allowing patients

to access healthcare costs either via portals or kiosks, schedule

appointments and provide self-registration on line, receive online

statements and make electronic payments are the new industry "leading

practices".

Revenue Cycle Risk Mitigation All Rights Reserved © iSolutions iQ


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Enhancing Cash Collection

After services are performed; electronic solutions, denial management,

monitoring productivity, underpayment pursuit, and cost containment

RCM techniques are critical to the financial survival of healthcare

institutions large or small. The decline of reimbursement mandates that

providers optimize performance and decrease expenses.

Improving Payer Performance

Gone are the days of "contentious" relationships with payers and

collaboration between provider and insurances are critical for survival in

the future of healthcare revenue cycle management. Defining the metrics

to measure between both parties is essential and recognizing that

measuring the payer as you do internally; is the recipe for success? Until

both the provider and payer is open to sharing their challenges and

recognizing the expenses associated with those flawed processes; they

will continue to experience unnecessary expenses and decreased patient

and employer satisfaction. Once both parties are transparent, they move

to the next necessary evolution of success in this ever changing industry.

The growing financial pressures on healthcare, organizations are forced

to seek innovative strategies to improve RCM. Providers and Payers can

no longer survive in a vacuum and nor is there any single solution.

Hence, finding a business partner that will complement these demands

and changes is crucial to responding and surviving to the healthcare

market challenges.

I encourage you to read this whitepaper and take note of the potential

strategies, technologies and solutions which are currently available to you

and your organization. The author, Phil C. Solomon has done an

admirable job in outlining the categories of solutions which can positively

improve your revenue cycle performance with limited or minimal budget

repercussions. In order to compete in today’s health care environment,

one must have the information to adjust, reformulate and often completely



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change operational directives if necessary. Currently, tools such as the

ones described in this paper are available providing plenty of data as

feedback for business performance. Leveraging basic data in itself is no

longer enough. Knowledge is the key to improving RCM performance.

The progenitor for traditional monthly operational statements and

periodical reporting has given way to real time operational business

intelligence, consumer analytics and multifarious cascading data mining.

Knowledge is power and my recommendation is to use it to its fullest

capability.

Respectfully,

Lyman Sornberger

Executive Director Patient Financial Services

Cleveland Clinic Health Systems



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What is Revenue Risk Mitigation?

Background

You may be asking yourself what is the meaning of “Revenue Risk

Mitigation?” Revenue Risk Mitigation is the art of securing every dollar of

revenue available through revenue cycle processes from the services

provided to patients. Additionally, as a part of this mitigation strategy, it is

critical to identify, categorize and quantify every dollar which is lost or not

collected during the revenue cycle process, such as which accounts end

up in bad debt and which accounts should be classified as charity or

community benefit.

In today’s unyielding economic climate, the majority of hospitals and

health systems are acutely interested in improving performance while

embracing innovation to improve the functionality of their revenue cycle.

Where is the best place to start? It is much more cost effective and easier

to improve cash collections and liquidity on current patient revenue base

than attempt to open new markets or drive new patients to your door.

Once you have supplied service for a patient, every dollar should be

collected to offset rising operating costs. This whitepaper highlights five

key strategies designed to solve critical revenue cycle issues facing

today’s healthcare financial executives.

Current trends indicate hospitals are losing 3 percent to 5 percent of their

net revenue from inadequate revenue cycle management processes and

procedures. Capturing revenue from all payer sources has become of

paramount importance for hospitals to thrive in our difficult economy and

in some cases, stay in business. The most recent data indicates that a

typical mid-sized hospital could experience approximate revenue leakage

ranging from $4.5 million to over $9 million each year. (Stuller, 2010) The

largest amounts of revenue losses are a direct result of poor data capture

at the front end of the revenue cycle and operational inefficiencies

throughout. A smaller but still significant amount of losses come from

unidentified or undetected government and commercial revenue sources

The most recent data indicates that a typical mid-sized hospital could experience approximate revenue leakage ranging from $4.5 million to over $9 million each year



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that end up in the self-pay financial class and eventually go uncollected.

Additionally, even though some of these unidentified insurance accounts

may ultimately be collected at a later date, the result of financial class

misallocation of insurance coverage results in an unnecessary increase of

AR days.

Bad debt continues to rise as patients take greater risk by choosing

higher deductable plans to reduce their overall out-of-pocket costs. Even

with the advent of healthcare reform, many patients are forced to under

insure themselves or go without insurance all together. The challenges of

collecting self-pay accounts continue to rise, as patients have become

more astute consumers. In some cases, patients choose hospitals that

have the spottiest collection track record and continue a repetitive cycle of

receiving services without paying for them. Aside from the collection

challenges of self pay, hospitals are plagued by the rising cost and

financial repercussions of performing revenue cycle activities such as

handling insurance payment rejections and denials, identifying lost

charges, delayed payments, underpayments, and the hidden cost of

rework.

Leading healthcare operational strategists are continually searching for

tools and technologies, which offer end-to-end solutions to boost revenue

and capture operational cost efficiencies across the entire revenue cycle.

No longer are the current “bolt on” single technology solutions acceptable

as a stopgap solution in today’s complex environment. Healthcare

executives are looking for cost efficient, overarching strategies and

technology solutions, which complement their current systems and

processes, and provide the business and operational intelligence data

needed to optimize financial and operational performance.

Why are some hospitals experiencing revenue leakage? Why is it that

some categories of revenue losses are quantifiable, but there is no

immediate fix in site? In general terms, providers are challenged to stay

up with, and consistently meet, complex and rapidly changing payer

No longer are the current “bolt on” single technology solutions acceptable as a stop gap solution in today’s complex environment



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requirements for pre-authorizations, medical necessity, and timely filing

limits. This is compounded by the rise in self-pay patients and the

inefficient data flow that supports the collection of these accounts. In

order to operate efficiently and effectively, easy to use systems with good

controls and fluid communication across the enterprise are needed.

Many hospitals have made great progress developing new processes and

procedures to improve and positively impact revenue cycle performance.

The challenge for these facilities is sustaining the financial benefits over

the long haul. This is more difficult than meets the eye. It takes qualified

and trained personnel to execute many of the complex and difficult

manual processes which have been developed over time. Maintaining a

top trained workforce and managing performance over time is no easy

task. It takes strong leadership and minimal turnover to sustain the

performance gains of procedural and process oriented strategies.

Gain Best Practice Results Utilizing Operational Business Intelligence

Providers are beginning to leverage new ideas and specific solutions to

for improving and maintaining peak revenue cycle performance. In short,

the leading practice trend is operating the revenue cycle based on

advanced technology, which delivers Operational Business Intelligence.

Having access to information is only a part of the solution; the key is

affecting positive change with the information.

The best operational managers know where they are in terms of

performance at any given moment. Having access to that level of

information in a manual environment is virtually impossible. Having

access to information and creating the ability to make decisions in real-

time is required in today’s fast paced business and healthcare climate.

New solutions are now making it possible and affordable to keep your

finger on the pulse of revenue cycle metrics and KPI’s by identifying

negative trends before they turn into performance issues. Relying on

retrospective reports is like reading Sunday’s newspaper on Monday. You

The leading practice trend is operating the revenue cycle based on advanced technology, which delivers Operational Business Intelligence.

Having access to information is only a part of the solution; the key is affecting positive change with the information



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already know what has happened and it is too late to change anything.

The best performing organizations know that the value of reporting is only

as good as the user's ability to act on the information. Unfortunately, due

to constraints and inflexibility of most healthcare information systems,

healthcare organizations are forced to operate in a retrospective mode

rather than acting in real time before an issue becomes fully developed

and can impact performance.

With capital markets tightening and budgets continuing to constrict,

healthcare financial executives are searching for non-capital intensive

solutions, which help them manage their business through sustainable

technologies that are flexible and adaptable.

Current healthcare information systems do not offer the operational or

business intelligence capabilities needed to manage quality and workflow

across the enterprise. Many outside vendors have attempted to solve this

ongoing dilemma by providing stopgap solutions which address pieces of

the puzzle; however there are minimal options for a true “end-to-end”

solution which is flexible and extendable enough to provide necessary

support – until now.

IT and financial executives should look for an Operational Business

Intelligence solution, which minimizes the need to add more staff to

support, such as an ASP model, and a flexible role based system, which

includes the easy addition, and modification of business rules which flag,

track and manage accounts through a work list. This proactive approach

to work flow management prioritizes key workflow elements beginning

with physician orders, scheduling, pre-registration to account write off.

Once Operational Business Intelligence tools are in place, revenue cycle

leaders need to benchmark performance metrics continuously. Such

performance based best practice comparables can be found at various

resources, such as the Hospital Accounts Receivable Analysis Reports

(HARA) produced by Aspen Publishers. (Petaschnick, 2007) When

benchmarking performance against national or regional data, goals must

Keep your finger on the pulse of revenue cycle metrics and KPI’s by identifying negative trends before they turn into performance issues.

Relying on retrospective reports is like reading Sunday’s newspaper on Monday. You already know what has happened and it is too late to change anything.



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be set by considering all factors, including adjustments for unique

circumstances such as varied demographics, large employer layoffs or

plant closings. Stakeholders should set goals as “better than their best”

but believable and aim for performance in the top 10% of all operational

categories tracked.

Once performance benchmarks have been established and approved by

executive management, revenue-cycle leaders should communicate and

publish their performance on a daily, weekly or monthly basis, regardless

of the results. When utilizing Operational Business Intelligence properly,

there should be no surprises regarding operational metrics. With the best

of breed Operational Business Intelligence systems, performance

trending data is available in real time, therefore line staff, supervisors,

managers, directors and executive leadership should have their finger on

the pulse of the revenue cycle at any given moment. Once in place,

performance metric tracking should be used as an integral part of a

continuous-improvement process.

Once empowered by real time Operational Business Intelligence tools,

goals for the entire enterprise need to be communicated to everyone

involved in the revenue-cycle process. All team members should be able

to articulate their role and respective contributions to the organization.

They should know exactly what their production and quality goals are and

understand the specific priorities needed to meet their goals. Operational

Business Intelligence tools offer simple-to-use performance dashboards

so everyone on the team knows exactly where they are in terms of their

performance and meeting their goals.

In order to maximize Operational Business Intelligence systems and

tools, revenue cycle leaders should look for integrated systems where

multiple solutions or services are bundled with an Operational Business

Intelligence analytics platform. By choosing a multi-faceted platform,

stakeholders can reduce the number of vendors they must manage and

therefore reduce the cost associated in managing them.

Stakeholders should set goals as “better than their best” but believable and aim for performance in the top 10% of all operational categories tracked



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Utilizing accurate, timely, and credible Operational Business Intelligence

data, health care financial and operational executives are able to

accurately benchmark key performance indicators in order to meet

organizational goals. These robust technologies allow even the largest

and complex enterprise to be nimble and act quickly to make the changes

necessary for optimal financial outcomes. Leveraging a suitable

Operational Business Intelligence technology offers the foundation and

road map for sustainable revenue cycle performance.

Maximize Physician Charges by Leveraging Electronic Collaboration

In most organizations, physician offices are directly responsible for

submitting patient orders to the hospital for scheduling services. Since a

physician’s primary responsibility is to focus on patient care, they may

have taken the time or spent the money to invest in the latest technology

to communicate with the hospital. Fluid communication is key to ensuring

services are rendered by the preferred service provider rather than a

competitor. A typical scenario is the physician makes a diagnosis of the

patient’s medical condition, and then orders a procedure or set of

procedures to be fulfilled at the hospital. The standard communication

method is to complete a patient order by hand and fax that order to the

hospital. At that point, the doctor and hospital are at risk of the patient

seeking services elsewhere.

The best method to mitigate a loss of revenue to a competitor is to

proactively ensure the patient follows through with the doctor’s orders and

is registered at the hospital to receive services. The most efficient way to

ensure this is to implement an electronic orders computerized physician

order entry (CPOE) technology at the physician’s office and at the

hospital. Revenue cycle leaders should look for (CPOE) technology,

which is tied to an Operational Business Intelligence system so there are

consistencies across the enterprise for procedure descriptions, reporting

and communication. Hospitals looking to gain and maintain strong

revenue cycle performance should avoid basic and common mistakes,

such as not verifying insurance coverage in advance and placing sole

Revenue cycle leaders should look for (CPOE) technology, which is tied to an Operational Business Intelligence system so there are consistencies across the enterprise for procedure descriptions, reporting and communication



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responsibility for correct documentation on physicians. With a quality

(CPOE) system, task management and communications improves

between the physician office and the hospital resulting in better data

capture and increased revenues.

Never Miss Another Medical Necessity Screening

The state of healthcare indicates that a substantial percentage of

healthcare services provided nationally are performed on Medicare

patients, many involving high acuity of care. Billions of dollars are lost

annually through lack of understanding or adherence to correct medical-

necessity screening processes.

A high rate of outpatient denials is due to lack of consistency of the

medical necessity screening process. This is due to the lack of easy-to-

use tools and the uniformity in screening for medical necessity.

New technologies are now available which simplify the process for

screening and automatically process advanced beneficiary notices

(ABNs) instantly at pre-registration and the point-of-service. Using new

technologies during scheduling or the pre-registration process allows a

provider to quickly identify scheduled services that may not be covered by

Medicare. The provider can then work directly with the physician on the

diagnosis or scheduled service to ensure proper reimbursement.

Providers will experience immediate positive impact by significantly

lowering their claim denials.

Achieve Zero Registration Errors and Defects

Revenue cycle financial outcomes are tied directly to the patient intake

and process flow, which begins at pre-registration and follows through

scheduling, registration, treatment, discharge, and collection. The typical

revenue cycle strategy for health systems has been to focus the bulk of

their resources at the back end of the process, on billing and collections.

Most revenue cycle challenges originate at pre-registration, scheduling

and registration. This is the critical time when the hospital is collecting

A high rate of outpatient denials is due to lack of consistency of the medical necessity screening process. This is due to the lack of easy-to-use tools and the uniformity in screening for medical necessity



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and verifying patient information needed to ensure submission of a clean

claim and receive full payment for services.

How are these front-end, quality improvement initiatives currently being

carried out? It is still not uncommon to see manual registration-data

quality processes, which involve the use of resources such as a quality

assurance analyst, spreadsheet software, and copies of face sheets and

insurance cards. Using this manual process, one FTE can review

approximately 100 to 150 registrations per day at most. Hospitals that

follow this method of quality assurance are truly fortunate if they are

actually able to review 5 percent of their total registrations. (Fleischer, &

Bertch, 2006) This is an ineffective and costly method of performing

quality assurance. By the time a financial executive identifies an area for

improvement, another burning issue rises to the top of the priority list.

From an outsider’s perspective, it is analogous to a dog chasing its tail.

Simple errors such as listing the incorrect format of a subscriber’s

identification number, or listing a minor as the guarantor, inserting an

incorrect address and social security number or missing a physician’s

name in order entry can create catastrophic outcomes which can be the

root cause of substantial revenue losses.

Most health systems resort to back-end cleanup processes or special ad

hoc collection projects to generate additional revenue and follow up on

lingering claims. While this strategy can be effective, these processes

usually occur too late for identifying and correcting the majority of the

most common billing errors: wrong, expired, or incomplete insurance

information; no preauthorization; non-coverage of service; or failure to

send notification.

Eliminating rework has to be the most import goal for revenue cycle

executives to work towards. When rework is minimized, the labor cost

savings will be substantial. One of the more costly FTE’s in patient

accounting is a Biller, who spends, on average, over 20% of their time

following up on and reworking claims. There is a solution to increasing

Most revenue cycle challenges originate at pre-registration, scheduling and registration.

This is the critical time when the hospital is collecting and verifying patient information needed to ensure submission of a clean claim and receive full payment for services



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productivity of your expensive and well-trained billers. (Hopkins, 2005) It

is Automated Registration Quality Technology. Automated Registration

Quality systems play an important role in implementing effective pre-

registration and registration processes which focus on obtaining all the

critical information required to deliver consistent, correct and complete

billing.

If operating in a manual QA mode, performing these tasks at the front end

often requires adding additional staff, which is never a popular option. As

hospitals convert to the latest registration quality and cascading eligibility

verification technologies, they can afford to reallocate their best and

brightest staff to the front end of the cycle and eliminate duplicate labor

costs.

The next generation registration quality tools should provide instant

feedback so that registration data correction can occur before the bill

drops. These tools need to have the ability to customize alerts to be

delivered to users which cover every error scenario giving management

and the entire revenue cycle team the ability to control throughput and

ensure registrations are performed accurately and quickly. In many

hospitals throughout the nation, at least 75% of the typical revenue cycle

staff is dedicated to working bill hold reports, appealing denials,

processing credit balances or following on billed claims. (Stuller, 2010) In

fact, HARA reports that the typical back-office staff personnel handles

over 6,000 A/R accounts in their queue at any one time. The amount of

people power needed to fulfill these tasks is enormous. Current trends

indicate that the average number of FTE’s involved in receivables

management functions at an average sized hospital is 27. (Petaschnick,

2007) Reducing errors and registration defects at the front end of the

revenue cycle can save hospitals millions of dollars annually by

eliminating back-end FTE’s or shifting resources to the front end to

achieve even greater positive results.

Reducing errors and registration defects at the front end of the revenue cycle can save hospitals millions of dollars annually by eliminating back-end FTE’s or shifting resources to the front end to achieve even greater positive results



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It is quite possible for an average size hospital that processes registration

to see a 30% reduction of errors, and achieve at least a 30% increase in

cash flow improvement, all while reducing operating costs by as much as

15%.

Patient access and patient accounting personnel need to be empowered

with tools that measure success of registration functions in real time,

enabling them to achieve superior results. With that in mind, it is

important to note that there are solutions available today that can offer

advanced registration quality assurance solutions which cost less than a

fully loaded FTE on an annual basis.

By collaborating together, and implementing the appropriate tools,

sustainable quality is achievable. The end result is more satisfied

employees, happier patients and a healthy bottom line.

Leveraging New Tools to Dramatically Increase Self-Pay and POS Collections

Self-Pay patients are on the rise. In 2009, the national average for

hospital’s self-pay total as percentage of gross revenue was 5.29%.

Outstanding A/R due from self-pay sources averages 16.65% and this

trend looks to continue through 2010 and beyond. (Cheng, 2003)

So, collecting from self-pay patients at the POS and afterwards should be

easy, right? Just ask for the money when the patient comes in for service

or send them a bill. Well unfortunately it’s not that easy. While top

revenue cycle performers understand they can dramatically improve self-

pay collections by requiring payment at the time of service, they are well

aware of a major limitation posed by the lack of appropriate data at point

of service (POS). In today’s environment, collecting at POS is high on the

financial executive’s priority list.

The first step to collect at POS is actually not collecting; it’s confirming the

type of payment source prior to the service being rendered. New

technology solutions now exist to search for additional payer sources by

The first step to collect at POS is actually not collecting; it’s confirming the type of payment source prior to the service being rendered.

New technology solutions now exist to search for additional payer sources by manipulating the patient demographic data and finding more eligible payers



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manipulating the patient demographic data and finding more eligible

payers. When checking eligibility for commercial and government major

payers, these technology tools can perform historical cascading searches

of registration data to identify possible missed opportunities to capture

commercial insurance data and government sources of reimbursement.

These additional payer search and insurance propensity technology tools

have proven to increase cash collection as much as 20% over traditional

processes.

Within the past 12 months, in many areas of the country, the self-pay

financial segment has doubled in volume. On average, many facilities

have 16% or more of their accounts receivable residing in the self-pay

financial class (including uninsured patient balances, unpaid co-

insurance, deductibles, and co-payments). If a hospital can achieve a 5%

to 10% increase in collections by adding a new strategy to their

processes, the result can make a significant impact to their financial

wellness. Since the average collection rate for pure self-pay balances

range between 2% to 3% and collecting balances after insurance tops out

at approximately 35%, any incremental increase in collections drops

directly to the bottom line. (Boehler, & Hansel, 2006)

To improve POS collections, leading hospitals are collecting both

estimated self-pay payments and estimated coinsurance amounts at the

time of service. New tools are now available which enable providers to

determine estimates for charges in real time prior to the patient’s visit,

during the pre-schedule phase and at the point of registration. These

technologies are able to calculate charges with amazing accuracy within

seconds of a request at any point during the registration phase. In

addition to collecting for current services, advanced data aggregator

technologies enable the collection of past due balances for previous

services rendered. Knowing what a patient owes the hospital for past

services and using that knowledge to collect more cash dramatically

helps meet POS collection goals. The best-in-class POS patient

Knowing what a patient owes the hospital for past services and using that knowledge to collect more cash dramatically helps meet POS collection goals



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estimators provide quality information without creating an abundance of

refunds on the back-end.

A POS driven strategy offers numerous benefits in addition to cash

collections, including real-time early classification of charity and medically

indigent patients. Categorizing patients early in the registration process

allows staff to focus on helping the patient by either assisting them with a

government subsidy program or classifying them as non-collectible. This

allows collection staff to devote their attention to collecting cash instead of

pursuing uncollectable accounts.

A maturing trend in self-pay collections is the use of real-time analytic

modeling and scoring. Segmenting patients based on their payment

patterns and historical payment record both within the hospital system

and with outside creditors will help amplify the patient accounts which

need the most collection effort and decipher which accounts need to be

accelerated to bad debt write off. Additionally, an often overlooked

analytic tool helps financial counselors determine how much a patient can

really afford to pay, thereby taking the guess work out of negotiating a

settlement or payment plan. At the end of the day, having access to the

right information is powerful. No longer are the days where a single

FICO® or credit score are truly helpful in determining a patient’s ability to

pay. The best practice algorithm for accurately estimating future payment

behavior and verifying a patient’s financial profile is only achieved when

the analytic output is cross validated using a complex mixture of actual

patient historical collection data, patient demographics and credit data.

With new analytic and POS tools in place, health systems need to decide

how to process self-pay accounts and where they will get their biggest

bang for the buck. Utilizing leading edge outsourcing companies who

offer a variety of services, including integrated analytic modeling, eligibility

assistance and early out self-pay outreach programs are many times the

best option to collect the high volume low dollar self-pay accounts and

support the financial assistance needs of your patients. By outsourcing

The best practice algorithm for accurately estimating future payment behavior and verifying a patient’s financial profile is only achieved when the analytic output is cross validated using a complex mixture of actual patient historical collection data, patient demographics and credit data



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non-core or lower value tasks to a trusted business partner, it leaves the

larger balance insurance accounts, government and other billing and

follow-up work to the hospitals seasoned staff. This allows hospital

revenue cycle executives to utilize their best trained staff to handle the

most important and relevant tasks. With new analytic tools available, it is

not prudent to make wholesale decisions such as holding all self-pay

accounts in house for 45 to 60 days because of the belief that some will

pay in that timeframe. Analytics now provide the data necessary to drive a

segmented strategy, which will take the guesswork out of work flow

design, placement timeframe decisions and overall strategies.

Another option is to consider partnering with financial institutions so they

can provide loans to patients as an additional resource to collecting cash

internally or outsourcing self-pay accounts. This strategy that offers

drawbacks as it is not available to all patients; patients must meet

minimum credit criteria in order to be granted a loan. Additionally, the loan

stipulations can be onerous for the hospital if they engage in a recourse

arrangement with the bank. The hospital will be required to “true up” with

the bank if a patient defaults and reimburse the funds that were advanced

to them.

The healthcare industry faces pre-service to cash challenges that no

other industry faces. Managing the revenue cycle requires that a labyrinth

of rules and regulations constantly need to be adhered to. This drives

revenue cycle executives to actively search for breakthrough technologies

and industry specific tools to help overcome the rigors of operating in a

fast changing and challenging environment. With the proper self-pay

collection tools in place, it is not unconceivable for a mid-size hospital to

reduce its financial assistance processing expense by over 50%, reduce

statement costs by 10%, reduce mail returns by over 25% and yield an

additional $500,000 to $2,000,000 in net revenue annually.

With the proper self-pay collection tools in place, it is not unconceivable for a mid-size hospital to reduce its financial assistance processing expense by over 50%, reduce statement costs by 10%, reduce mail returns by over 25% and yield an additional $500,000 to $2,000,000 in net revenue annually.



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Summary

The key factors which differentiate the best revenue cycle leaders from

those who deliver mediocre results are the passion and forethought

envisioning how the revenue cycle can operate more successfully and

which tools are needed to accomplish peak performance. These leaders

find creative ways and are not deterred by budget constraints or the

status quo to perform at the highest level, continually striving to

benchmark their performance against the industry’s top performing peers.

The first steps that should be taken to analyze performance improvement

or revenue-cycle redesign are:

‐ Assess and map the current state of the revenue cycle

- Identify key challenges and the systemic causes of the challenges - Brainstorm strategic and tactical solutions to the challenges - Outline the all encompassing best practices technology, outsourcing or process redesign required to eliminate the challenges

Once revenue cycle challenges are identified, the strategies outlined in

this whitepaper offer solutions to mitigate revenue risk by leveraging new

technologies and techniques in the areas of Business Operational

Intelligence, Physician Order Communication, Medical Necessity

Screening, Zero Error and Defect in Registration Quality and POS and

Self-Pay Collections.

The overarching benefits of implementing the latest strategies detailed

above are:

- Ability to track any performance metric to ensure top performance - Maintaining a seamless flow of information within the revenue cycle - Increased information accuracy - Decreased denials - Decreased manual effort to bill and collect



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- Better accuracy and communication between referring physician offices and the hospital - Improved patient satisfaction ratings

The costs of inadequate revenue-cycle process execution permeate far

beyond the financial ramifications. Poor performance creates a cloud

across the entire organization. Successful application of leading revenue

cycle strategies requires the involvement and acceptance of departments

outside of patient access and patient accounting. Revenue cycle quality

and performance require the buy-in from cross-functional groups to

support the new systems and technologies needed to sustain high

performing revenue-cycle output. It is paramount that the focus on

revenue cycle activities becomes an operational priority across the

industry. Every specialty, large or small facilities and for-profit and not-for-

profit organization need to make revenue cycle performance a top

priority.

Money isn't the only factor to consider in evaluating revenue cycle

performance. Patient satisfaction goes hand in hand with operational

performance. Even if you don’t have the data to support the assumption,

more often than not, if you have a revenue cycle performance problem,

you have a patient satisfaction problem.

Works Cited

Stuller, E. (2010, August 26). Top 10 revenue cycle mistakes. Retrieved from

http://findarticles.com/p/articles/mi_m3257/is_1_59/ai_n8700915/?tag=content;co

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About the Author

Phil C. Solomon is the Chief ROI Officer of iSolutions iQ, the healthcare industry’s most innovative operational business intelligence firm proving technology and services solutions to providers nationally. Phil oversees all aspects of the firm’s activities and operations including the development of the overall strategy, product development and vital mission and roadmap of the organization. Phil and the company’s business and technical leaders are focused on continuing iSolutions iQ’s innovation, leadership and deepening relationships

with their most important business partners. Phil’s 19 year track record of success has been focused exclusively in technology solutions, services outsourcing, collections, customer care and call center applications. Previously, he was the CEO of a Fast Tech 50, call center performance improvement technology firm, and a principal executive at an INC Magazine American top 500 Fastest Growing Private Company. In addition, he managed the Healthcare vertical market for one of the largest global outsourcing and receivable management companies in the world.

He is an active member of the HFMA, NAHAM, MGMA and AAHAM and is frequently featured as a speaker at industry trade conferences and educational seminars. Phil resides in Atlanta, Georgia and holds a B.A. degree from San Diego State University.

About iSolutions iQ

Founded in 2006, privately-held and headquartered in Toledo, Ohio; iSolutions iQ is a leading healthcare revenue cycle performance improvement and analytics company – leveraging business

operational intelligence and specialized analytics to improve operational and financial performance for large and small health systems, hospitals and large physician clinic’s and groups. iSolutions iQ’s mission is to evaluate, measure and decipher key performance indicators, then provide the tools necessary to manage revenue cycle activities with peak performance.



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iSolutions iQ’s technology delivers analytical data in real-time, increasing the visibility of business information for faster, informed decisions improving performance and increasing operating margins. For information, visit www.isolutionsiq.com or call 800-673-1987.

Foreword written by:

Lyman G. Sornberger, Executive Director, Patient Financial Services, Cleveland Clinic Health Systems

Lyman Sornberger joined Cleveland Clinic Health Systems in 2006 and is the Executive Director of Patient Financial Services for the Cleveland Clinic Health System (CCHS). Prior to his affiliation with CCHS he was with the University of Pittsburgh Medical Center [UPMC] for twenty two years as a leader in the revenue cycle management.

His role at Cleveland Clinic Health Systems is comprised of the Revenue Cycle Management for all 10 Cleveland Clinic Health System Hospitals and Foundation Physicians. In addition, he is responsible for the management of Weston, Florida Technical and Professional billing. Lyman is responsible for all CCHS billing for the main and regions, patient access for the East and West nine hospitals, and Medical Records, Coding, and transcription for their Main Campus. In total there are 1100 employees under his direction with a model that is both centrally and de-centrally dispersed.

In parallel in the past twelve years he is proud to have served as a consultant and advisor with various practices nationally. He has authored numerous articles for HFMA, AHAM, and other leaders in the Revenue Cycle arena. Mr. Sornberger earned his BS and Masters at the University of Pittsburgh and served as a Medic in the US Army prior to joining the Health Care private sector.

Documents

Revenue Cycle Risk Mitigation White Paper December 1 2010 Ver 1 2