Can GPOs help plug the revenue drain for their members?
Editor’s Note: The participation of those in the following articles does not constitute an endorsement of the sponsor’s products or services.
The following responses were provided by Kate Banks, senior vice president, MedAssets Net Revenue Systems; and Ann Diamond, executive vice president, Xactimed, a MedAssets company.
The Journal of Healthcare Contracting: How do you define revenue cycle management for your IDN members?
Kate Banks/Ann Diamond: It is the process by which hospitals are paid for the services they provide. This begins when the patient chooses the facility for treatment based on costs/quality/insurance eligibility or other factors, and ends when the patient claim is paid in full or is closed.
JHC: Why is revenue cycle management important to our readers at The Journal of Healthcare Contracting?
Banks/Diamond: Supply costs are the second largest expense in most hospitals. Ensuring proper reimbursement for supplies used in patient care is essential to a hospital’s financial health. Materials management and revenue cycle can no longer operate in silos; they must come together to understand how they each contribute to the success of the other.
JHC: How will revenue cycle management impact hospital CEOs/COOs and their hospital systems?
Banks/Diamond: CEO/COOs must lead the charge to bring disparate people and systems together and foster communication between them to increase data integrity and transparency in supply charging.
JHC: How do you break down the concept of revenue cycle management? Are there basic categories you address with regard to revenue cycle management? What are these categories and how are they broken down?
Banks/Diamond: We break down our members’ workflow into three segments. At the front end are scheduling, pre-registration and patient access. Activities undertaken at the front end include bill estimation and point-of-service/cash collection. In the middle are charging, coding and utilization management. Activities in this segment include charge capture, coding and documentation, and case management utilization review. At the back end are collections, accounts-receivable management, and remittance processing. Activities in this segment include claims management and electronic billing, expected reimbursement contract management, denials and remittance management, and collection and accounts-receivable management.
JHC: What tools do you offer to help IDNs address different aspects of revenue cycle management?
Banks/Diamond: We offer:
- A single contract management engine for contract modeling and profitability analysis, bill estimation and point-of-service collection, under-recovery analysis and service, and accounts-receivable valuation.
- Complete denials management: Concurrent and retrospective case management.
- Claims and denial management integration and reconciliation.
- Charge level billing edits.
- Supply cost management and supply charge integration.
- The ability to wrap services and to go at-risk.
- Financial management dashboard with cost and reimbursement data, not just a revenue.
JHC: How do you help your members address differences working with Medicare-insured patients, privately insured patients or uninsured patients?
Banks/Diamond: Regardless of who the payer is, submitting an accurate and complete claim or bill is key to being reimbursed fully and in a timely manner. Every patient needs to understand the services provided, and his or her financial responsibility for these services. MedAssets has tools to help providers establish consistent and compliant charging policies such that prices are defensible.
JHC: If reimbursement is capitated, what difference does revenue cycle management make?
Banks/Diamond: Even if reimbursement is capitated, it is important for hospitals to have consistent processes for all services provided. MedAssets has cost accounting and contract management tools to help providers access the profitability of every payer contract.
JHC: How much more money should hospital systems be able to make by addressing revenue cycle management?
Banks/Diamond: Every hospital system is different. There is a very big opportunity to increase cash flow by improving the revenue cycle; however, the goal is to receive the correct amount of reimbursement. Often times, with the use of technology or by improving processes, net revenue will increase. However, there are other times when implementing technology and new processes can decrease net revenue, because a hospital may have been unknowingly overcharging for services. It is equally important to address these instances. MedAssets estimates a 1 to 3 percent increase in net revenue by using our tools and services.
JHC: What steps should CEOs or COOs take to begin addressing revenue cycle management if they do not already do so?
Banks/Diamond: A CEO/COO must understand that the revenue cycle begins well before the patient even comes through the door, and ends long after the patient is discharged. The C-suite should empower those in charge of the revenue cycle to find the tools needed to provide the patient with a great financial experience. This includes helping patients make informed decisions before entering the facility, ensuring proper coding by clinical staff, and providing an accurate bill/claim to facilitate timely payment from the patient and third-party payers.
JHC: What educational tools do you provide to help your members become more revenue cycle management savvy?
Banks/Diamond: We host the Performance Forum at the Healthcare Business Summit in Las Vegas each year. We also offer product training and compliance training throughout the year to revenue cycle customers (who may or may not be a GPO customer).
JHC: Are members growing increasingly aware of revenue cycle management? Are more members coming on board? Please explain.
Banks/Diamond: There is a growing understanding of the supply chain’s impact on reimbursement among our GPO customers, as well as industrywide. We believe we have helped make this connection with our CrossWalk software – a technology that links the revenue cycle with the supply chain.
JHC: What is the future of revenue cycle management? Do you anticipate that more sophisticated tools will continue to be developed, and that revenue cycle management will become more sophisticated in years to come?
Banks/Diamond: Consumerism will probably drive the most change in the coming years. Consumers will demand that hospitals have the ability to estimate the cost of care, so that consumers can choose where to receive treatment. Further efficiencies and improvements will be forthcoming.
JHC: What will revenue cycle management mean to your members in five years? Do you anticipate that this will become a major part of running a hospital system?
Banks/Diamond: Revenue cycle management is already the lifeline of the hospital. It’s how the hospital gets paid.