In sum, the health care industry is beset with a set of economic problems that threaten to turn cash flow into cash crawl. "We need to grab every single piece of revenue we can," says Becky Fisk, director of revenue cycle management at North Kansas City (Missouri) Hospital, which is, among other I.T.-enabled measures, evaluating vendors to provide a patient reminder system to help ensure patients keep their appointments.
And even when patients show up, providers now have to play a new role-that of financial counselor, if not lender outright. "Health care delivery is changing," observes Reese Walker, financial systems analyst at Phoebe Putney Memorial Hospital, Albany, Ga. "A high-deductible plan used to be $500. Now you see $5,000 deductibles. Hospitals are becoming financial institutions and lending money to their patients. Most people cannot pay a $5,000 deductible. But we provide services and have to foot the bill until they pay. Anything we can do to speed up the claims process with the insurance company and get the correct information to the patient is going to help."
Following are five ways that hospitals like Phoebe Putney and North Kansas City Hospital are using I.T. to help streamline their revenue cycles, assure proper and timely payments, and uphold their missions to serve patients.
Cash Flow Tip #1: Move Claims Out Faster
Phoebe Putney makes every effort to ensure its claims are complete and accurate before sending them to payers for adjudication. But the effort-which for years revolved around manual checks of charges, observation hours, and modifiers-had its drawbacks, observes Walker. "It caused a bottleneck," he recalls. "Claims could be held up for months."
To streamline the laborious pre-submission process, Phoebe Putney deployed software from Boston Software Systems called Boston Workstation. The software evaluates claims generated by the hospital's McKesson financial information system, and if a claim meets certain rules, it will bypass human intervention, going straight to a clearinghouse.
Walker prepared 10 scripts which embedded information into an Excel file that the software uses to evaluate claims. If a claim meets the logic of the script, it skips human intervention. If not, the software spits out an exceptions report, which a biller then uses to analyze the particular claim. For example, one script required the software to search for a national provider identifier number.
Before the scripting tool was deployed, a biller would evaluate each claim to verify the information. Another script checks to make sure that a charge for a contrast drug appears with an imaging claim if appropriate. "We have several different contrasts we use, so the software will make sure at least one unit is on the claim," Walker says.
The scripting tool went live nearly three years ago, and showed immediate results, Walker says. The hospital cleared out a 10-day AR backlog of pending claims in about two months, reducing it to about one AR day, where it stays now. "The time value of money in health care is important," he says. "We got a one-time gain in cash flow and now it is steady."
Cash Flow Tip #2: Keep Close Tabs on Accounts
With $420 million in annual net revenue, North Kansas City Hospital has a large cash flow to monitor. And like many hospitals, it historically relied on considerable rekeying of information, in such areas as posting payments and declaring accounts to be bad debt. To help expedite some of the manual labor, and improve accuracy of its financial reports, the hospital automated its process for sending accounts to bad debt about 18 months ago, says Fisk, the director of revenue cycle management.
Running on Boston Workstation, the set-up monitors accounts from the hospital's financial information system, and if proper criteria are met, sends them directly into the bad debt bucket. Previously, those accounts would linger unnecessarily as open AR days, says Fisk.
Upholding Medicare's rules about declaring accounts as bad debts is difficult, adds Fisk. To ease the chore, the software considers how long since the last payment was made, the last time the patient was contacted by customer services, and the number of statements that have been sent out, says Tom Marquis, applications analyst.
The hospital uses the software in other ways to help keep its books in order. Now, when payments are received, the software automatically posts the payment to the correct account, rather than wait for a staff person to key in the transaction. "If a payment is made, I want to credit it immediately," notes Fisk. "That way we don't send out another statement. It's much cleaner than having someone keying in the payments. If you have payments keyed to the wrong account, you get someone with an incorrect credit balance and someone else getting a statement. This keeps patients happier. We have fewer mistakes."
Of course, the bad debt bucket is just one of many financial categories that providers must track. To tackle the difficult task of monitoring overall financial performance, some hospitals have deployed sophisticated business intelligence systems, which can pull financial information from multiple departments and create graphical portraits of performance measures that executives are keen to track.
One example is Mt. Sinai Medical Center, New York. About one year ago, the hospital launched a BI dashboard, from Information Builders, for its faculty practice to provide administrators one-stop shopping for financial reports, says Gad Malamed, the center's project manager, applications development. The dashboard replaced a legacy counterpart that the organization had used to monitor the finances of the hospital for several years, Malamed notes. "The new BI tool shows data in a more graphical way," he says.
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