It's been nearly a year since electronic health records first came under fire for their potential connection to medical billing fraud and rising hospital Medicare costs. The widely publicized studies and subsequent allegations that some providers were using their EHRs to "game the system" by upcoding services such as emergency care — or cutting and pasting their way to assigning more costly billing codes through a practice called cloning — set off an industry firestorm.
As someone who has devoted his professional life to espousing the myriad benefits of health care information technology, I was troubled by this industry black eye. Moreover, I was discouraged by the "one step forward, two steps back" impact the controversy ultimately might have on the positive strides made through the meaningful use program.
After all, here was a golden opportunity to cry foul for those who have long questioned the value of health IT or those opposed to the EHR incentive program for a variety of reasons. And many did.
Some even criticized the Office of the National Coordinator's investigation of the issue, suggesting the experts involved were too closely tied to the industry to be objective — likening the situation to asking the National Rifle Association to investigate gun violence.
An Odd Parallel
Comparing the ONC with the NRA is neither particularly illuminating nor fair. However, there is a comparison that can be made between guns and EHRs.
If we allow the very tools designed to protect us and keep us safe to find their way into the hands of those with malintent, the consequences can be devastating. Likewise, tools designed to ensure that better care is delivered and accounted for can be used to harm the industry and its participants.
If the intent to harm or cheat is there, technology can amplify our ability to perform such dubious acts. Sadly, health care technology joins guns, automobiles and the Internet in being applicable to a wide range of motivations.
While the billing fraud concern is certainly a legitimate one — well worth efforts by the government to investigate, audit and eradicate — we must not lose sight of the critical role information technology, specifically revenue cycle software, plays in the delivery and financing of care; and, ultimately, in supporting the overall well-being of our health care systems.
In fact, if we were to examine the other side of the fraud debate, we may see that the rise in billing is rather a result of providers' getting better at documenting care and capturing their costs more accurately through the use of EHRs and revenue cycle technology.
In Praise of Revenue Cycle Systems
As we know, the contractual agreements and reimbursement terms involved in managed care in the United States are complicated and becoming exceedingly difficult to manage for both care providers and payers. In reality, it is not uncommon for some providers to routinely deal with several hundred different health plans and arrangements. Without the appropriate tools to manage the billing and reimbursement terms of these agreements, providers easily can fall short of realizing expected net revenues and cash, and place their continued existence in peril.
For example, underpayments cost physicians and hospitals millions of dollars each year — either because the underpayments are difficult to identify or the effort and cost to recover them exceeds the gain. Likewise, industry data suggests that many health care providers are writing off up to 4 percent of net patient revenues because of payer denials. For a median-size hospital (358 beds) with annual net patient revenues of $370 million, this is more than $14 million in lost revenues and operating margin.
Additionally, government claims review programs such as recovery audit contractors have made claims management practices increasingly complex and burdensome for health care providers. As private payers adopt similar practices, it will become ever more critical for providers to expand accountability for effective claims management throughout the revenue cycle — from point of scheduling and patient access to care delivery, documentation, charging, coding, claims submission and payment reconciliation.
Clearly, in today's challenging financial environment, adopting a more coordinated, efficient and cost-effective approach to revenue cycle management, enabled by sophisticated IT tools, has become a strategic priority for many health care providers. In addition, it will not be possible to manage care in an era that rewards those that provide high-quality and efficient care without the ability to analyze integrated care quality, cost and reimbursement data.
And while these very same IT tools can threaten the integrity of our industry through isolated instances of abuse, we must not overlook their many potent benefits. Consider the following ways information technology supports the revenue cycle and can position an organization to provide ongoing care for its community:
Make a good first impression. The consumerization of health care is compelling providers to look for opportunities to differentiate themselves by improving the patient experience — beginning with the first point of contact.
Because a patient's first encounter with the hospital is typically through scheduling or registration, this is a key opportunity for transformation. Not only do these processes impact the patient experience, they also can affect all downstream clinical and financial processes.
To create the best patient experience and improve the quality of patient information throughout the episode of care, providers need technology that automates, standardizes and streamlines user workflow by improving the speed and accuracy of data collection. The right IT system can turn scheduling and registration activities into a seamless, patient-focused business process. Moreover, these systems can reduce the patient headaches and aggravation that occur when problems with claims turn into interminable arguments with the payer and the provider.
Generate cleaner claims. Care providers know effort and costs are wasted when time is spent correcting and not collecting. One of the keys to successful revenue cycle management lies in securing and verifying patients' health care financial information, including payment sources.
Imagine an intelligent system that already knows the billing rules so that patient intake staff can create a proper claim and avoid many of the error corrections that consume precious staff resources and delay reimbursement. Think about the financial and operational benefits of reallocating those resources to more valuable activities, such as customer service, preservice financial clearance, accounts receivable or cash collections.
A sophisticated revenue cycle system can be driven by provider rules that define the types of activities and information that must be satisfied before a patient encounter can be "cleared" for services and/or billing. Such a system also can prompt the collection of complete and accurate information early in the revenue cycle to help reduce delays and denials. Additionally, office staff can complete tasks like medical necessity and eligibility checking up front, within the preregistration workflow, so they can collect and verify the right information to ensure accurate and quick patient billing.
Improve denial prevention and management. Reducing denied claims is critical to improving operating margins. With provider operating margins reaching unprecedented lows, a focus on denials avoidance and management is necessary for an effective revenue-protection strategy.
The risk of lost payment from denied claims is compounded by the burden of administrative expenses and delayed cash flow related to rebilling, appeals, follow-up and denial recovery. However, modern revenue cycle systems can help to eliminate the various points of failure that contribute to denials.
Additionally, while optimizing recovery is necessary for a denials management program, preventing denials up front via the right IT tools offers a better long-term strategy for improving revenue capture. In fact, some experts believe an effective denials management program can have a more dramatic impact on the bottom line than any other revenue-generation or cost-reduction initiative.
Prepare for payment reform. Many payment reform models are being tested and proposed. One thing they have in common is the requirement that providers be able to manage the revenue, cost and reimbursement of care across multiple providers and care settings.
A next-generation revenue cycle system can support these models because of its inherent ability to aggregate or segregate charges across multiple providers, create receivables and claims, and calculate expected reimbursement based on the payer requirements and payment model that applies. Having the ability to handle traditional billing and reimbursement requirements — along with the agility and flexibility to support accountable care organizations, bundled payments and other future payment reform initiatives — will become the new norm for providers.
Measure and manage better. Today's revenue cycle systems can notify financial executives when a key performance indicator exceeds a preset threshold, enabling timely attention to a negative performance situation. A dashboard of multiple indicators such as expenses, revenue, accounts receivable, charity care and average length of stay can show a complete picture of which metrics are doing well and where improvements are needed.
Much of today's innovative financial software allows finance executives to see top-level information and drill down as deeply as necessary to get to the root of a problem. Moreover, advanced business intelligence tools can keep financial leaders informed of operational performance in real time and without intensive IT involvement, delivering information through easily configurable, browser-based dashboards and reports. These capabilities and analyses will be essential in a health care system that tightly links clinical performance to provider revenue.
The Best Laid Plans
Advanced health care information technology can help organizations to remain prosperous in this new era of accountability.
The technology is available today to simplify patient registration, increase staff productivity, improve claims integrity, and enable providers to spend more time collecting cash and less time correcting errors. Additionally, analytics and contract modeling tools can offer greater financial insight and enable near real-time access to information to improve forecasting, payer management, revenue management and contract negotiations.
Yet, despite the efforts and plans of many to improve care through IT, there will be those rare few who choose to use the technology with malicious intent —to game or cheat the system. But, thanks to the heightened scrutiny now in place on hospital billing and collections practices, those who attempt to do so will suffer the consequences.
It has been said that we should not blame a gun for any act of violence any more than we can blame a pen for misspelling a word — another interesting comparison we might want to ponder, should health care information technology come under fire again because of the actions of a few.
John Glaser, Ph.D., is the CEO of the Health Services business unit of Siemens Healthcare in Malvern, Pa. He is also a regular contributor to H&HN Daily.
