The Affordable Care Act, despite the uncertainty of many of its specifics, is sure to significantly alter reimbursement structures and the delivery of care. Because of performance pressures, health care organizations need a consolidated view of care delivery and revenue management among multiple providers to ensure optimal revenue cycle performance.
Some organizations, as in the case of Ellis Medicine in Schenectady, N.Y., will encounter factors beyond their control that lead to a system conversion as the industry continues to consolidate.
In 2008, Ellis fell victim to New York State's Commission on Health Care Facilities in the 21st Century, also known as the Berger Commission, and was required to merge three hospitals into one entity. This resulted in a significant financial system conversion. Ellis successfully merged three hospitals and cultures (the former Ellis Hospital, St. Clare's Hospital and Bellevue Hospital), improved the cash flow of the new organization, and realized an $8 million gain post-merger. The organization also re-engineered and standardized the revenue cycle processes of its three facilities while completing a big bang conversion of all three hospitals to a next-generation revenue cycle system or RCS, in 2010.
Preparing for the Unknown
Regardless of the reasons an organization undertakes an RCS conversion, the journey can be a daunting one. In fact, few events trigger more anxiety than bringing a new financial system live. With a very small margin for error, no organization wants lost claims or disruptions in cash flow.
While careful planning and thorough testing and training can help alleviate some of the anxiety, the unexpected will occur during some component of the installation.
Ensuring that a revenue cycle conversion goes as smoothly as possible and results in the desired performance gains depends largely on three factors: maintaining a positive working relationship between the provider and vendor; maintaining a positive working relationship between the revenue cycle and IT departments; and having ongoing, visible support from top managers. In addition to these factors, several lessons learned by Ellis can aid others faced with introducing a new RCS and making related changes in revenue cycle processes.
Charting a Course for Success
As Ellis embarked on its conversion journey, the team had an overarching goal of doing what's right for its patients. Having multiple systems not only was inefficient for staff; it also was painful for patients. So, an objective right from the start was to create a more patient-friendly billing and registration system. Helping staff see the direct benefit to patients throughout the project kept the level of engagement high.
The following insights and best practices can help other providers plan for a successful RCS conversion and more readily achieve desired financial performance goals.
Realize the significance of the culture change that accompanies a large system conversion; staff the project and coach users accordingly. Success can come only through organizational buy-in. In messaging the project to your organization, be careful not to minimize the importance by referring to it as simply an "IT project" or "new billing system upgrade." Staff members will struggle to feel a personal connection to the project unless they understand the direct impact on their work as well as the big picture impact — that every single patient visit will be affected by the system change.
With a new system install, you want key departments to understand how they fit into the overall revenue cycle. For example, Ellis' conversion to a next-generation system moved charge capture management from the back end, or business office, to the departments where charges are generated. While some revenue-producing areas may not have appreciated the importance of charge capture and reconciliation, Ellis' project leaders didn't hesitate to pull in C-level people to work with selected ancillary departments to clearly explain their stake in ownership.
Finally, you'll want to ensure that your implementation team is made up of people who are change agents, who are comfortable with change, who are natural leaders and who can bring the right attitude to a project of this scale.
Develop a comprehensive plan that covers all the nuances of report generation and management within your organization. A core task is to inventory all report users from your legacy system and ensure they're covered on the new system. When Ellis underwent its conversion, the obvious report users such as patient admitting areas, the business office and the finance department were covered. However, other departments, such as the information desk, pastoral care and the foundation office, were missed during the analysis phase. As such, phone calls came into the command center during go-live week with staff assuming that their printers were broken. Of course, it wasn't the printer that was broken; the legacy system was simply no longer generating a particular report and no arrangements for new reports had been made. Be sure to think outside the box on this issue, because there are users you may not think of right away who are relying on admitting or charge data to manage their responsibilities.
You'll also want to establish a reporting team or infrastructure before going live. Prior to Ellis' conversion, reporting was very much decentralized. The process was boiled down to users emailing or calling particular people they knew who could create reports for them, but there was no general coordination. During its conversion Ellis was able to develop a dedicated team of report writers, as well as a systematic way to handle and prioritize report requests. This meant ensuring that the ownership of reports was clear and enforced.
It's also essential that your must-have reports are ready for Day 1, not three months after going live. Furthermore, ensure daily monitoring of key operational reports. Ellis had several inpatient accounts get stuck in the system; because a particular report was not designated for daily review, it took a week to identify the issue, which resulted in a brief cash crunch.
Monitor operational performance throughout the conversion. To develop a meaningful dashboard or metric report while going through a conversion, it's important first to develop some comparative metrics. Ellis did this by using two comparative metrics, one being baseline metrics that consisted of an average of its six-month pre-live metrics, and then incorporating several of the Healthcare Financial Management Association benchmarks.
Post-live metric monitoring should include daily as well as weekly monitoring, such as DNFB (discharge, not final billed) claims submitted and even cash. You may want to review these metrics again monthly with year-to-date averages as well as some percentage trends compared with your baseline figures.
Assess policies and procedures prior to implementation. A thorough assessment of the currency, awareness of, and adherence to the organization's policies and procedures is key. One thing you don't want to do is build your new system around old processes. Even the best systems cannot make up for poor workflows, processes and communication. Since you'll be determining newer, more effective workflows, they likely will require new policies and procedures. One effective means to accomplish this task is to use small groups to work right in the new system, determine what kind of a workflow is most appropriate, then develop and test the new policies and procedures with those workflows.
Implement a solid formal change management structure. Change management is important when you're going through a conversion. One of the lessons Ellis learned is that changes to an enterprisewide solution such as a new RCS can affect many systems and users. As such, you need to consider carefully any change to the system and how that may affect other systems and other users. Ellis' change management program is led by its IT department, and the team meets weekly to review proposed changes and decide to approve, deny or postpone. Every proposal is subject to a waiting period of at least five days prior to a vote. The organization also has key leaders sign off on changes, so decisions are well-documented.
Avoid other conversions during the same time, or at least carefully consider the risks and impacts. Some things may be under your control and some may not be. Ellis' fiscal intermediary underwent a conversion that didn't go very smoothly about two months after Ellis' conversion, resulting in delayed payment from the intermediary. Ellis also implemented a new payroll system around the same time and brought some outsourced functions (its self-pay function in particular) in house with the conversion. All of these changes going on simultaneously caused a bit of a struggle. While the organization got through them, it learned a valuable risk-management lesson.
Begin risk-management discussions with payers early. An RCS conversion can involve high-risk process change, so it's essential that all issues affecting these processes are considered up front. Explore all options concerning cash flow issues with payers and partners. For example, Ellis worked with a payer who was willing to do a claims push to expedite processing. You'll also want to work closely with your accounts payable department and vendors to keep them all informed of any changes and assess any impact of fluctuation in cash outflows during the initial post-live period. It's equally important to be aware of anything outside the conversion that may affect cash; physician incentives, vacations and payouts fall into this category.
Continue weekly meetings post-live. Although it's been more than a year since Ellis went live with its new system, the implementation team, which consists of vendor and hospital resources, continues to have weekly status meetings to review any system or process issues. This management technique works especially well for those issues that might require a multidepartmental approach. For example, Ellis has people from patient access, revenue management, IT and medical records on the implementation team — the ongoing face-to-face dialogue among all stakeholders has been effective in issue resolution.
RCS conversions typically are complex and stressful. Ellis Medicine's system conversion experience emphasizes that with the right planning, staff engagement and executive support, the intended gains can be achieved with minimal disruption to the revenue cycle.
John Glaser, Ph.D., is the CEO of Siemens Health Services in Malvern, Pa. He is also a regular contributor to H&HN Daily. Veronica Ziac, M.B.A, C.H.C., is the revenue cycle systems director at Ellis Medicine in Schenectady, N.Y.