Attention to Margin

Amerinet has added revenue cycle management to its offerings to members for 2006. In doing so, executives of the St. Louis-based group purchasing organization hope they can help members improve their margins, and that Amerinet can increase its involvement with its IDN members’ “C suites,” that is, chief executive officers, chief financial officers and chief operations officers.

“As we bring a lot more to the table, particularly for larger IDNs, [we anticipate] a mutual commitment between Amerinet and the customer,” said CEO Bud Bowen, speaking to the Journal of Healthcare Contracting on the eve of Amerinet’s annual Supplier Conference, held Nov. 1-2 in St. Louis. “In return for our customers’ agreement to maximize their utilization of our core services, we in turn will commit additional resources – such as onsite personnel, consultative services and diagnostic services.” The result, said Bowen, will be a stronger partnership between the GPO and its members.

Revenue cycle management
Revenue cycle management comprises four elements, says President Todd Ebert:

  • Increasing net revenue through such activities as qualifying patients, identifying payers and helping patients identify payers
  • Collecting a higher percentage of unpaid bills
  • Improving (and speeding up) the revenue cycle by streamlining the process
  • Increasing the predictability of revenue cycle results

ACS Healthcare Solutions, Dearborn, Mich., (formerly Superior Consultant Co.) helps members conduct benchmark studies so they can gauge where they stand in their revenue cycle efforts, said Ebert. “Providers will receive feedback on processes from getting patients in the door to coding to reimbursement and collection.” At that point, they can select from a number of potential solutions, including consulting, outsourcing services and even interim management. Amerinet also offers a software package – the Chargemaster Toolkit Suite from Orlando, Fla.-based Craneware Inc. – to assist members in the efforts.

Information systems
During the past year, Amerinet has worked hard to augment its information systems offerings, according to Ebert and Bowen. Included are the datamart module, Diagnostix, and eBid, an electronic bidding system.

The newly introduced datamart module allows Amerinet to analyze sales information from distributors and manufacturers, and identify “where our customers are missing opportunities to use contracts, and where we are missing contract possibilities,” said Ebert.

Its Diagnostix software, introduced last year, takes the concept one step further. The Diagnostix AccuPrice tool is designed to help members audit their pharmacy pricing daily, eliminating overpayments and reducing the time that staff spends resolving errors. Amerinet plans to expand AccuPrice to its food and laboratory product areas.

The Diagnostix AccuSave software, meanwhile, helps members analyze their purchasing data and take advantage of the most appropriate price. “This is the real basic blocking and tackling [of contract management],” said Bowen. It is not uncommon to find IDNs buying the same product from multiple purchase locations, using different numbers and different descriptions, and paying different prices for the same item, he said. As a result, many IDNs do not pay the contract price to which they’re entitled, and they fail to qualify for better, volume-related pricing. AccuSave can help them identify those opportunities, he said.

Amerinet also instituted eBid, an electronic bidding system, allowing pharmaceutical suppliers more flexibility in their proposals, and Amerinet the ability to analyze suppliers’ responses more rapidly. The GPO plans to expand the electronic bidding system to its med/surg, laboratory and nutrition programs.

Other developments
Amerinet is poised to take the next step with its Amerinet Clinical Advantage program, which helps members reduce costs on physician-preference items, such as cardiology and orthopedic implants.

“We have had success with the [program] relative to clinical preference contracting,” said Ebert. “The question is, where do you take this? If you know you’ve reduced prices, can you tie it to outcomes? Are they better, the same, or have you created a problem? (We don’t think we have.)”

To answer these questions, Amerinet will accumulate outcomes data and tie it to decisions made as a result of Clinical Advantage projects. Presumably, when physicians see that standardizing on physician-preference items or accessing lower prices does not jeopardize patient care, they will be more willing to participate in future projects.

Capitol Hill
Looking at the year ahead from a Capitol Hill perspective, Bowen predicted that the federal government will re-introduce legislation to impose controls on GPOs, as it did last year with the Medical Device Competition Act. (Introduced in October 2004, the legislation would have provided federal oversight of group purchasing organizations. It died when the 108th Congress adjourned in November 2004.)

“We will continue as an industry to oppose the introduction of any bill, because the industry initiative has to be given a chance to prove it will do more than satisfy the concerns, and provide accountability that is unheard of in private industry,” Bowen said. The Healthcare Group Purchasing Industry Initiative is a voluntary association of GPOs created in 2005 to encourage and sustain ethical business practices in the GPO industry.

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