Revenue Integrity – A Critical Factor for Revenue Cycle Success
Most healthcare organizations recognize the need for improving the efficiency and effectiveness of their revenue cycle operation. Efficiency refers to reducing the operational costs associated with billing and collections. Staffing and systems are the major expense categories. Effectiveness relates to maximizing cash collections and improving the timeliness of which that cash is collected. Revenue Integrity adds a third dimension to the discussion of revenue cycle performance. Revenue Integrity refers to the thoroughness, timeliness, and accuracy of the charge capture and coding processes.
An effective revenue integrity program ensures that every billable clinical activity is properly captured, coded, and billed in a timely manner. This starts the process by which clinical services are converted into cash.
The benefits of a revenue integrity program include:
- Reduction in lost or missing charges resulting in enhanced charge volumes.
- Reduction in charge and claim lag resulting in accelerated cash collections.
- Improved clean claim rate resulting in reduced costs of collections and accelerated cash collections.
Traditional revenue cycle operations have historically been split between “front-end” or patient access-related activities (i.e. registration, scheduling), and “back-end” billing and A/R management functions. A revenue integrity program incorporates clinical workflow, and the actions and concerns of physicians and nurses into the revenue cycle. Clinical documentation, diagnostic and procedural coding, and the submission of charges are all generated within the clinical workflow, yet performance often appears on back-end revenue cycle reports. The result too often is that accountability falls on the billing office, yet the real performance improvement opportunity rests outside of a billing director’s direct control. Engagement of clinical staff into the overall revenue cycle truly integrates clinical operations and financial performance, assigns accountability to the proper source, and provides appropriate and actionable education to capitalize on improvement opportunities that benefit the entire organization.
As revenue integrity programs have matured, revenue cycle and financial leadership have incorporated new Key Performance Indicators to monitor the integrity of their revenue. These metrics provide a more granular analysis of common measures such as denial rates and A/R days, in order to address performance improvement opportunities directly at their source. Examples of metrics used to measure revenue integrity performance include:
- Medical Necessity Denial volume and charges.
- Charge lag and claim lag, and the degree of manual intervention to resolve pre-bill coding and claim edits.
- Discharge Not Final Billed.
- Documentation that supports 100 percent of all charges.
As referenced earlier, monitoring these indicators would be a fruitless exercise if physicians and nursing staff were not engaged in the process. Billing managers alone would have minimal ability to reduce medical necessity denials resulting from lacking diagnosis information. Reviewing this information with physicians, informing them of the financial impacts of lacking information, and engaging the EHR teams to optimize clinical documentation tools would be a much more effective approach that benefits all parties, including the patient.
To develop a sustainable revenue integrity program, or to improve the effectiveness of an existing RI program, I recommend the following activities:
- Define goals, objectives, and scope for the program.
- Develop a project plan.
- Track and implement the project plan.
- Design the organizational chart, with resource requirements.
- Define roles, skillsets, and workflows within RI.
- Create relevant RI job descriptions for human resources.
- Identify and acquire tools needed for the department’s optimal performance; e.g. software coding references, library of coding books.
- Develop RI workgroups and a steering committee to include key leaders from IT, clinical operations, compliance, RCM, and finance. (Depending on specific objectives, you may want to include RI SME’s and analysts.)
- Identify and train RI charge capture resources (Charge Guardians) by departments and/or clinical product lines.
- Develop best practice RI policies and procedures, to be reviewed annually and revised as needed.
- Define baseline benchmarks and performance indicators to measure and trend performance over time.
- Develop and implement RI training program content and timelines for RI analysts and auditors.
Brad Boyd is president of Culbert Healthcare Solutions.
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