Welcome to Financial Edge

Thank you for subscribing to Financial Edge, HIMSS’ financial systems eNewsletter—your source for the latest issues and emerging trends focused on financial systems and related technologies within healthcare delivery.

Share Financial Edge with colleagues, co-workers, friends and anyone involved in connecting clinical and financial systems. If you have received this issue as a courtesy and would like to receive future issues, click here to subscribe.

Story ideas and other comments can be e-mailed to Nancy Vitucci, Manager, Publications.

---

Save the Date: HIMSS10 Financial Systems Symposium

Follow the Money in 2010 - Understanding the Pressures and Impacts on Financial Systems

Sunday, February 28, 2010
8:00 am – 1:00 pm

Healthcare reform is one of the administration's top priorities and the landscape is constantly changing. The Financial Systems Symposium, to be held in conjunction with the 2010 Annual HIMSS Conference and Exhibition in Atlanta, will explore the rapidly moving field of electronic commerce in healthcare. Sessions will discuss and demonstrate how we are going to prepare to move forward efficiently and effectively with healthcare.

Sessions include:

• Follow the Money – Healthcare Reform and Financial Systems Implications explores how the automated flow of health IT records to claims, through payments, can result in cost savings and support financial incentive payments.
  Speaker: Henry Chao, chief technology officer, CMS
• The Emerging Partnership between Providers and their Banks describes how providers continue to experience problems with obtaining ERAs (835s) and EFT from payers, so banks are expanding upon traditional lockbox and financial EDI services to serve the provider community.
  Speakers: Jim Moynihan, senior vice president, FHFMA, CTP, CHBME, U.S. Bank Healthcare Payments, US Bank; Debbie Pung, U.S. Bank; Anita Whitcome, director, billing services, Luther Midelfort Mayo Health System; and Michelle Lee, CCS-P, supervisor, payment processing, Luther Midelfort Mayo Health System
• ICD-10: What's it Going to Cost & Are You Doing Enough to Prepare? explains how the implementation of the ICD-10 Coding requirement will touch all stakeholders in healthcare: provider organizations, health plans, regulatory agencies, system vendors and clearinghouses. Thorough planning and coordination between all these groups will be key to a successful rollout and the mitigation of risk.
  Speakers: Tony Trenkle, director, Office of e-Health Standards and Services, CMS; and Sid Hebet, enterprise program manager, ICD-10 initiative and HIPAA 5010 project, Humana
• Flipping the Switch: From Retrospective Systems to Real-time Forecasting examines how other industries have been implementing forecasting tools for years.  Airlines know how many seats they will sell on a flight in two weeks, retailers know how many boxes of detergent they will sell 20 days from now.  However, the same forecasting tools are not as widespread in the healthcare industry.  Forward-looking measures of a provider's patient flow would be an indispensable tool for financial managers and will be examined in this session.
  Speaker: Leslie Richard, director, revenue management, Centura Health

Save $100 on Registration
Save $100 when you register for the full conference and any symposium. This special discount applies to full paid conference registration (Sunday-Thursday) only and is not available for students. The discount will be applied automatically during the registration process. 

Registration, Travel and Housing
Early bird registration rates for HIMSS10 are available now through Dec. 15. HIMSS10 registration includes entrance to all education sessions and the exhibit hall, the Sunday Night Welcome/Opening Reception on Sunday, Feb. 28, and registration tote bag (while supplies last). The HIMSS10 Web site features details on all registration categories, registration for optional events such as the symposia, and discounted rates for a One-Day Pass and Wednesday Exhibit Hall Only Pass.

Air travel and hotel information are also available online. Hotels are expected to fill up quickly, so attendees are encouraged to make hotel reservations early through Ambassadors, HIMSS’ official housing and travel bureau. In addition to making reservations online, attendees can contact Ambassadors at 877-517-3038.

^ back to top

Revenue Cycle Management (RCM), Part I

This article begins a two-part series on revenue cycle management in the healthcare environment. Part II will be featured in the November 2009 Financial Edge.

Divan Da’ve

By Divan Da’ve

Revenue cycle management (RCM) is an integral part of any organization. When we discuss RCM in the healthcare industry, billing comes to mind. However, it is a much wider and more intricate concept than billing. Effective RCM has major impact on operating profit, cash flows and patients’ receivable balances. Unfortunately, while most organizations perceive RCM as a cost center, it is actually a profit center.

What is RCM?
RCM not only focuses on patient billing and collections, but also incorporates checking eligibility, collecting complete patient demographics, benefits verification, capturing charges, coding, claim submission, collecting and posting payments from patients, denial management, reporting and data analysis (see Table 1). The main objective is maximizing revenue.

Table 1: RCM Processes in Healthcare

Why RCM is Complex in the Healthcare Industry
Providers are facing countless regulatory requirements, which incorporate classification of codes, reimbursement policies and common terminologies. From the provider point of view, up-to-date information is required to ensure payers are billed appropriately, of which coding plays a significant role and serves as a basis for disease and illness classification. At the same time, coding is the common language between providers and payers during the reimbursement process. Each payer has a different set of ambiguous rules for processing and paying medical claims; studies have shown as much as $210 billion in redundant costs annually.¹

It is believed that on average, 32 percent of all claims are rejected, while 5 – 15 percent are lost in the process, never to be collected. The average time it takes to collect is 60 to 90 days. In addition, aside from the time, this process involves tremendous cost in managing the entire claims filing process. The New England Journal of Medicine states that a typical provider's overhead and billing expenses account for 43.7 percent of his/her gross income.² The Medical Group Management Association (MGMA) states that it costs $25 - $30 to process the average denial.³

Common Problem Areas of RCM

• Incorrect demographics entries at the front end lead to a high volume of claim denials.
• Incorrect coding of ICD -9 and CPT- 4.
• Lack of domain knowledge results in incorrect coding of CPT and ICD poses major challenges in compliance and leads to regulatory audits.
• Standard units of medication not billed correctly result in direct revenue loss.
• Claims submitted are exact duplicates of previously submitted claims.
• The time limit for filing a claim has expired.
• Inappropriate information system to track documentation and billing.
• Lack of diligent follow-up.
• Lack of appeal experience.

RCM problems can be resolved by:

• Integrating processes between the front end and back end
• Implementing adequate tools and technologies such as EHRs
• Providing employee enrichment programs, continual training
• Analyzing and reviewing organization processes to improve efficiency and remove repeated errors
• Creating benchmarks and standards for achieving desired revenue
• Soliciting an external audit by consultants

     
Conclusion
Efficient RCM is very important and requires much involvement and coordination by physicians, billing staff and consultants. Spending money on new technology, training and consultants can provide a very high rate of return. However, on average, providers are losing 7 – 10 percent of their revenue due to RCM inefficiencies. Providers learn medicine in medical school but some lack the business knowledge to manage a practice. In order to sustain a successful practice in today’s competitive market and increase revenue, providers either need to learn the basics of RCM or outsource the RCM processes to trusted professionals.  

References

1. California Nurses Association/National Nurses Organizing Committee. HMO claims-rejection rates trigger state investigation. Available at http://www.calnurses.org/media-center/in-the-news/2009/september/hmo-claims-rejection-rates-trigger-state-investigation.html.  Accessed on Oct. 14, 2009.

2.  “Costs of Health Administration in the U.S. and Canada,” Woolhandler, S. & Himmelstein, D., New England Journal of Medicine, 2003;349:768-75. Available at
http://content.nejm.org/cgi/reprint/349/8/768.pdf.  Accessed on Oct. 14, 2009.

3. Lowes, R. “Practice Pointers: How to cut A/R.” Medical Informatics Sept. 3, 2004. Available at
http://medicaleconomics.modernmedicine.com/memag/article/
articleDetail.jsp?id=120970. Accessed on Oct. 14, 2009.

Mr. Divan Da’ve is a CEO and founder of Integrated Systems Management Inc., and its product and services OmniMD,™a developer of a HIPAA compliant, CCHIT and SureScripts certified EMR/EHR, a practice management system and other healthcare IT products and services.

^ back to top

Future of Healthcare Finance Market and Health IT Examined During September Webinar; Presentation Available Online

Over the next five years, the health IT industry will be faced with an unprecedented number of changes. Most recently, the industry has been focused on the HITECH incentives for implementing EHR “meaningful use,” but we need to also add to this HIPAA 5010 and conversion to ICD-10. These major initiatives will impact all players in the health IT space including integrated delivery networks, facilities, practices, health plans, and vendors. 

Unfortunately, all of these efforts converge within a short timeframe. From mid-2010 to mid-2012, the industry is looking at a “perfect storm” as 5010 goes live, providers rush to qualify for the first year of the HITECH incentive payments, and ICD-10 remediation efforts begin. Each of these initiatives is alone a large effort, will have multiple internal and external integration points, may require access to capital still in short supply, and will demand a pool of qualified health IT staff resources that is not available today.

Health IT organizations need to develop and communicate a clear strategy for addressing these initiatives. The strategy adopted must address the reality that few organizations will have the capacity to “do it all,” that is, handle these initiatives as well as the organization’s own business initiatives planned for the next five years. Whether it involves setting tough priorities, outsourcing or going for all of it, key business initiatives will need to be slowed to meet these mandated efforts. Setting expectations among key stakeholders as early as possible is essential.

To help with this, check out HIMSS’ recent financial systems webinar, which explored what the healthcare finance market might look like in the next few years, given the current healthcare activity in Washington, DC. The webinar, HIT in the Next Five Years: Managing the Mandates of 5010/ICD-10, ARRA, Privacy and Security, and Healthcare Reform, featured a panel of industry experts from the provider, vendor and payer perspectives, discussing the overlapping, and in some cases, conflicting timelines for 5010/ICD-10, ARRA "Meaningful Use," Privacy and Security and Healthcare Reform between now and 2014 and identified important next steps for key health IT stakeholders.

Click here to access the presentation from this free event.

^ back to top

Tackle Healthcare Financial Issues On Demand

This month’s Healthcare Finance News Virtual Conference & Expo, hosted in collaboration with HIMSS, answered healthcare financial systems professionals’ most pressing healthcare reform, revenue cycle management and RAC audit questions. Although the live segment of Healthcare Finance News Virtual Conference on Oct. 14-15 is over, the event’s nine, one-hour educational sessions and expo remain available to registrants through Jan. 15 (three months). Educational highlights included:

Healthcare Reform: The Implications for Healthcare Finance
Blair Childs, senior vice president of public affairs at Premier Inc., opened the event with a frank discussion on healthcare reform, its implications on hospitals and health systems, and what leaders should be planning for.

A Roadmap for EMR Adoption: Ensuring Meaningful Use
The rush is on to automate care delivery organizations. Numerous surveys have documented that the vast majority of healthcare organizations, including ambulatory clinics and hospitals, have yet to implement comprehensive electronic medical record systems. HIMSS Executive Vice President and HIMSS Analytics President and CEO David Garets, FHIMSS, presented data that showed a different, brighter picture of EMR adoption in the hospital setting.

Surviving the Crisis: Not-for-Profit Healthcare and the Capital Markets
David Chin, MD, MBA, partner and leader of PriceWaterhouseCoopers Health Research Institute, delivered an overview of the three major healthcare reform pathways and their implications for health system strategies.

Positioning the Organization to Respond to RAC Audits
Stephen Forney, vice president, margin development, Ardent Health, Nashville, Tenn., provided not only an overview of the latest information regarding RACs but also guidance to organizations as they respond to a RAC audit.

Healthcare Finance News Virtual Conference is free to qualified registrants. Non-qualified individuals may attend for a nominal fee ($99 for HIMSS Members/$119 for non-members). Learn more and register online.

^ back to top

 

Advocacy/Public Policy Update: Congress Prepares to Consider Legislation, HIT Standards Committee Meets

By K. Meredith Taylor, director of congressional Affairs, HIMSS, and Tom Leary, senior director, federal affairs, HIMSS

Fall is always a busy time in Washington, and never more so than this year, with all eyes focused on healthcare reform on Capitol Hill. The Senate Finance Committee finally voted on the America’s Healthy Future Act, passing the measure by a vote of 14-9.  The Congressional Budget Office (CBO) calculated that the Act would cost $829 billion over 10 years, with a reduction in the federal deficit of $81 billion in that same period.  Stay tuned—healthcare reform is expected to be debated by the full Senate the week of Oct. 26.

With the attention on Congress, the Obama Administration continues to move forward on health IT initiatives, including exploring development of a Health Internet as a way to make the Nationwide Health Information Network more consumer-centric. Early reports vary on whether the concept is an attempt to make health data sharing more understandable to the general public and technically more compatible with consumer-centric applications, or if this will become an opportunity to make foundational technical changes to the NHIN. HIMSS is reaching out to the Obama Administration to gain clarity on the initiative, as it will have a considerable impact on consumer involvement.

Finally, the HIT Standards Committee meeting on Oct. 14 highlighted activity around the American Recovery and Reinvestment Act (ARRA). Dr. David Blumenthal of the Office of the National Coordinator sought to clarify public misunderstanding around the Nationwide Health Information Network, reiterating that the NHIN is codified in the ARRA and that work would be moving forward. The Office of the National Coordinator is attempting to retool some of the NHIN initiatives to ensure the goals of the NHIN remain focused on consumer engagement by developing tools and technologies that utilize standards, protocols, and specifications available in the public domain for anyone — big or small. 

^ back to top

Stay Connected, Join HIMSS Social Networking Groups

Social media has exploded over the past few years—as has technology in general and the multiplicity of tools available to keep you connected. HIMSS groups thrive on several social networking sites, including HIMSS Connect, Linkedin, Facebook and Twitter. Members of these groups expand their business and social contacts through online networking and discussions forums, as well as get real-time updates and news from HIMSS.

HIMSS Connect
Members and annual conference attendees have access to HIMSS’ social networking vehicle, HIMSS Connect. The site allows members to network through discussion groups, find users with like interests, locate users in your area, create your own blog, and participate in the HIMSS Wiki and more. Login to the HIMSS Member Center and get connected today.

Linkedin
This social networking tool connects individuals to industry experts, business partners and recommended job candidates worldwide. By linking up with the HIMSS Linkedin Group, individuals streamline this process by gaining instant access to a growing group of health IT and management systems professionals. Nearly 20,000 professionals already have joined the HIMSS LinkedIn Group to strengthen and extend their networks and participate in the discussions and news forums. Additionally, the Society recently launched a HIMSS Senior IT Executive Linkedin Subgroup, which provides upper-level IT executives at provider organizations an exclusive forum within Linkedin for peer-to-peer networking, idea exchange, and problem and solution sharing.

Twitter
Twitter is a free social messaging service that connects users in real-time using “tweets,” or short messages. These alerts or mini-broadcasts can be sent via text messaging to cell phones or via the Web. By joining the HIMSS Twitter Account, which has over 3,200 followers, people follow the Society’s feed for news, discussions and alerts on health IT industry topics. Twitter also creates a new avenue for industry or niche interests to network and connect with each other.

Facebook
People use Facebook to connect with friends and colleagues, meet new people, upload photos, share links and videos, and join groups of interest. The HIMSS Facebook Fan Page convenes professionals to expand their contacts, participate in group discussions, as well as stay up to date on HIMSS news and events. By becoming a fan, users can enjoy direct news and event updates to their Facebook Walls. Through HIMSS events, fans can see who will be attending, pre-plan meetings with other attendees or exhibitors and more.

^ back to top