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From the Consultant’s Corner 8/25/16

August 25, 2016 News No Comments

Mitigating Revenue Risk During IT Implementation

From small practices to large integrated delivery networks, the ability to evaluate and select the appropriate IT applications is increasingly important. A number of drivers are pushing healthcare organizations to look critically at their IT vendor mix, especially their revenue cycle applications, including clinical integration initiatives (and the need to extend clinical and business applications to affiliates), the shift to value-based reimbursement, competitive merger and acquisition activity, and vendor market consolidation.

No matter the reason, developing a strategy to mitigate disruption to cash flow is a crucial component of any billing system or EHR implementation. The potential risk to revenue is no less an issue for private practices than for IDNs, yet, too often organizations devise their plans to protect revenue after the vendor selection has been completed and contracted. A better option is to address your Risk to Revenue Mitigation Strategy as part of the vendor selection and contract negotiation processes.

For example, practices should include both implementation staffing needs and ongoing staffing demands (i.e., for application maintenance and user support) in their “total cost of ownership” analysis. Keep in mind that, although most vendors have pre-defined implementation approaches that include helpful standard workflows and staffing structures, these vendor-defined best practices may not adequately address an individual practice’s unique workflow or business requirements. Organizations with a single billing office, for instance, will have vastly different workflows and training requirements than those with decentralized hospital/professional billing and customer service.

To mitigate risk to revenue during revenue cycle or EHR implementations, consider adopting a comprehensive strategy inclusive of these seven elements:

1. Create a business intelligence blueprint prior to go-live. This is the number-one mechanism for mitigating revenue risk, but it’s often overlooked. While most vendors offer robust reporting and BI tools, during the sales process, these same vendors often do not set realistic expectations as to the work effort required to build them before go-live.

2. Don’t skimp on training. In fact, training should be the last place to look for cost savings. In reality, IT implementations always involve changes to workflows, policies and procedures, user roles, application navigation, and personalization tools. Practices must balance vendor recommendations and methodologies against these changes because lost productivity doesn’t just impact financial performance — it also impacts the patient experience. Whenever affiliated practices or hospitals are included in an implementation, the negative PR of a less-than-successful implementation can — and often does — impact future clinical alignment plans and opportunities.

3. “Accelerate” cash flow before go live. As early as eight to 12 months prior to go live, organizations should begin cleaning up their A/R and identifying opportunities to accelerate cash flow. The goal is to create a cash buffer to offset any dips in cash flow caused by declines in clinical productivity or billing performance once billing begins in the new system.

First, design a plan to aggressively work down legacy A/R in the old system before the new system is activated. If internal staff don’t have the bandwidth to shoulder the responsibility, consider outsourced opportunities for an interim period.

Then, decide how to handle the period of time between when some staff must work out two separate systems to work legacy A/R out of the old system and current billing out of the new system. Operating in dual environments — with two different workflows and two different sets of policies and procedures — presents challenges. Old habits are reinforced through use of the old system, just as you’re trying to instill new roles, workflows, policies, and procedures. To overcome these challenges and hasten the learning curve on the new system, many practices outsource A/R from their legacy system after the first two or three months, during which most of the easier-to-collect accounts are resolved.

4. Develop application talent internally. The key is to tap trusted employees who fully understand the practice’s business, values, and culture. Outside assistance is best used to streamline your team’s learning curve on the new system, to advise you on alternative implementation decisions (and their strengths and drawbacks), for peak periods of build, for date conversion or short term technical expertise, for training, and for go-live support and stabilization.

5. Convert clinical activity to cash through focused integration of clinical and revenue cycle functionalities. Don’t make the mistake of replicating legacy workflows; use the implementation as an opportunity for process improvement, such as the consolidation and/or standardization of visit types. Look at your documentation, charge capture, charge triggering, and charge routing for ways to improve physician efficiencies, and to produce thorough, timely, and clean claims. The ability to close encounters in a timely manner is a necessity. In addition, validate vendor recommendations to make sure your organization’s unique operational requirements — not just application best practices — are supported. Conduct integrated testing with real-life scenarios.

6. Automate data conversions. Some vendors advise against the automated conversion of certain patient and scheduling information. This may be due to the extensive amount of in-house technical expertise an organization would need to have on the brand-new application — which is not typically present. However, such data conversions involve a concentrated work effort for only a finite period of time. If qualified resources aren’t available internally, organizations may find it worthwhile to engage with an outside consultant. Automating data conversion offers a major ROI opportunity compared against tens of thousands of hours of manual data entry.

7. Test, test, test. The importance of system testing cannot be overstated. At a minimum, organizations should test their top volume- and top revenue-generating clinical services through a fully integrated clinical and revenue cycle. That means testing that starts with patient access, continues through the clinical encounter (including clinical documentation and charge capture), and continues through the entire billing cycle (including claims production, remittance, denial management, payment variance analysis, and reporting).

As healthcare organizations continue to align with affiliated practices, IT system builds are becoming more complex. Consider, for example, what happens when multiple practices and facilities all share a common billing system, yet their disparate financial information must be kept separate. In all such situations, a vendor’s standard implementation approach and timeline must be vetted and either validated or modified according to practice needs. Training and go-live strategies should always be grounded in reality; it’s better to reset expectations upfront than to put revenue at risk on the back end.

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Brad Boyd is president of Culbert Healthcare Solutions.


Contacts

JennMr. H, Lorre, Dr. Jayne, Dr. Gregg

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