When it comes to managing the revenue cycle, David Kanzler takes a pragmatic approach-he outsources a good chunk of it. "The management of billing and collections has become so sophisticated and technical that it's hard to justify doing it ourselves," says Kanzler, the CEO and CFO of Hinsdale (Ill.) Orthopaedic Associates, a 25-physician group practice which provides a wide range of procedures including sports medicine, total joint replacements, hand surgery and spinal fusions.

Four years ago, Kanzler turned over all post charge-capture activities to Chicago-based Origin Healthcare Solutions. The practice codes its services, then hands over claims submission and related follow-up activities to Origin, explains Margarita Cuadra, revenue cycle director. "Billing gets more difficult every year," Kanzler moans. "And payers come up with new and novel ways to reduce payments and deny claims. So I need to leverage the expertise of a company thinking about this 24 hours a day."

In an industry laden with revenue cycle woes, Kanzler has plenty of company. While not everyone outsources the work to the extent Hinsdale Orthopaedic has, most providers bemoan what they describe as the growing complexity of managing the revenue cycle. The hurdles are many, from a proliferating number of payer edits-particularly from Medicare-that define the documentation required to justify payments to ever-increasing financial obligations being handed over to patients-obligations which providers must collect. Then there are disparate clinical and financial information systems.

Outsourcing the back-end of the revenue cycle is always an option. Many providers have no qualms about surrendering a chunk of their revenue to a firm well-versed in dealing with claims submissions, denials and appeals. But only so much can be outsourced. That's why providers are increasingly revamping their workflows on the front-end of the revenue cycle to avoid downstream delays and denials. Talking with patients upfront about their financial obligations is a new segment of workflow for many, one that requires a cultural shift and newly defined staff roles.

In essence providers are taking a longitudinal approach to the revenue cycle and working more closely with the clinical departments whose documentation drives it. Some are consolidating their financial and clinical systems in an effort to streamline front-end charge capture. Others are using revenue cycle dashboards to monitor the cash flow and identify possible bottlenecks. No one finds it easy-and emerging fee-for-value payment models are adding more uncertainty to the entire revenue food chain. Gary Baldwin’s feature story in the May issue of Health Data Management digs into each of these approaches for squeezing out more revenue.

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