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A Proactive Approach to Revenue Cycle Management

Revenue integrity can improve financial health and set the stage for success.

Todd Nelson, Director of Partner Relationships and Chief Partner Executive, Healthcare Financial Management Association (HFMA)

Dr. Curtis Turner, Medical Director, Primary Care Division, University of South Alabama


Revenue cycle management is an increasingly important priority for health care organizations as tightening margins and pressure to demonstrate value have increased. A survey conducted by the American College of Healthcare Executives (ACHE) found that in 2018, for the third year in a row, financial challenges ranked as the top concern for hospital CEOs. Ensuring all aspects of a hospital’s finances are healthy and efficient is gaining new importance as a value-based care (VBC) reimbursement system is shifting an increasing amount of financial responsibility onto health care organizations.

The revenue integrity approach

Revenue integrity has gained traction in recent years as a way of strengthening revenue cycle management and considering it in a more holistic way. The revenue cycle is generally understood as the administrative, financial and clinical functions that contribute to the capture, billing, collection and management of patient service revenue. The revenue integrity model actively engages and integrates these functions to ensure care is properly documented and reimbursed. Todd Nelson, director of partner relationships and chief partner executive at the Healthcare Financial Management Association (HFMA), defines revenue integrity as an early intervention method for financial management.

“Revenue integrity is a proactive approach that focuses on assessing and minimizing risk and making sure you are focusing in on the key areas of importance,” said Nelson. “It’s almost like having an auditor working from the inside of your organization.”

In a traditional revenue cycle structure, departments tend to be siloed – patient access, coding, and billing are all focused on their own tasks and responsibilities, and everyone’s primary goal is account resolution. This system can work well until there are issues that need to be addressed, such as claim denials. In a traditional revenue cycle model, there’s often little space for considering how the process might be improved.

“Revenue cycle is focused more on integrating multiple transactions, where revenue integrity is about taking a step back and trying to prevent problems for the future,” said Nelson.

Charge capture challenge

Identifying which risks or challenges are present in a revenue cycle is the first step in revenue integrity, and there are common issues across organizations. In a recent article published in the HFMA magazine, a group of health care leaders discussed how they have incorporated the revenue integrity model in their own organizations. All participants agreed that charge capture is a primary focus of their revenue integrity programs. Similarly, 43 percent of ACHE CEOs surveyed identified converting charges to cash as a pressing concern. The need to accurately capture and record care is critical to ensuring complete reimbursement, but a large proportion of organizations are currently struggling in this area. A 2018 survey also found that 76 percent of C-suite executives reported that denials are their biggest revenue cycle challenge.

For executives seeking to improve the financial health of their organizations through better charge capture, two key attributes of the revenue integrity approach are important – education and clinical involvement. Creating meaningful dialogue with clinicians is essential to improving charge capture, and building a partnership with clinicians to promote education around common billing issues creates an understanding of the clinician perspective.

“It’s important to show providers how what they do affects how money comes in,” said Curtis Turner, MD, medical director of the primary care division at the University of South Alabama, professor of pediatrics and coach to physicians, faculty and residents on hospital billing practices. “If you don’t select the right code, what does that mean in the long run? What do denials mean in the long run? Often providers don’t understand when they are denied services or equipment that they need, and don’t realize those things come out of the budget of the revenues that they generate.”

Drilling down to a granular level on how choices on individual charge capture affects an organization’s revenue stream can open important conversations with providers on what they understand to be appropriate, acceptable billing practices. In many cases, a fear of billing incorrectly leads to a modest approach to charge capture.

One example Turner cites is how to bill for a well child visit when it’s also combined with a sick visit. Preventative care and problem care are billed for in different ways and different states have varying standards of what they will reimburse. At the risk of overbilling, many physicians may opt to omit one of the charges when both charges are legitimate.

“Helping providers understand what is considered fraud, what is not fraud and what is waste is key,” said Turner. “I’ve gotten feedback from faculty that they appreciated the education. They are afraid of being audited or denied, or of what the Centers for Medicaid and other payers might come back with.”

Clinical integration

Nelson agreed that a revenue integrity approach must be owned equally by financial and clinical departments to be successful, and getting there requires education. Physicians are trained to diagnose illness, provide care and promote healing, and their daily routines and tasks are structured around those imperatives. Introducing new patterns of behavior and ways to think about how their care is integrated with the financial health of the organization means creating a strategy tailored to the physician experience.

A recent study by Deloitte outlined change management strategies for involving physicians in financial management initiatives. Recognizing that physician behaviors are deeply ingrained, involving them early and often in organizational goal-setting, and empowering them to lead change can shape behaviors. It’s also important to recognize, however, that with both clinical and non-clinical staff, change does not always come easily.

“A proactive approach can feel like a lot of extra work,” said Nelson. “It’s important to help people understand that a revenue integrity approach will be more work up front, but the idea is that the work you do up front will prevent denials and compliance issues down the road. It benefits both clinical and financial documentation.”

A recognition of the physician mindset is what helped Shriners Hospital for Children in Tampa, Fla., transition to a revenue integrity model after relying solely on its endowment for funding. A recent article in Revenue Integrity Insider details how Shriners used the physician’s imperative to provide care as a starting point to help open the conversation about the importance of charge capture and clinical involvement in the revenue process. It also underscored that keeping providers’ workflows in mind when designing protocols for charge capture can increase adherence and acceptance.

Technology that focuses on clinical documentation improvement can also help make accurate charge capture a more streamlined process. By integrating clinical and financial functions, disparate information can be viewed more easily and reduce the need for duplicative data entry that can cause frustration.

Being transparent with physicians about compliance and denials issues can help spur the motivation needed to frontload the work that a revenue integrity approach requires. One strategy is to give providers visibility into how many of their coded claims are denied and the financial impact that has on the organization, which often comes as a shock. This is the approach Turner’s department took to encourage better coding and facilitate communication between departments.

 “There was no communication between our residents and mid-levels and our compliance department,” said Turner. “We set up a dashboard to provide feedback on compliance curves because if a physician doesn’t know the information, they can’t correct behavior.”

Revenue and value

An added benefit of a revenue integrity approach is that it brings together financial and clinical departments and fosters the communication and collaboration that is needed in a VBC environment.

“Value-based care, by nature, is a clinical, financial and patient satisfaction payment mode,” said Nelson. “Revenue integrity can lay the groundwork for those teams to work together.”

Revenue integrity can also help improve bottom lines and overall value for an organization. Implementing a revenue integrity program requires an investment of time, resources and technology, and leaders need to consider how much of an investment they are willing or able to make. For leaders that have put in the time to adopt a revenue integrity approach, the investment is paying off. A recent HFMA study found that of the 44 percent of respondents whose organizations had established a revenue integrity program, 68 percent saw an overall increase in net collection and 61 percent saw a reduction in compliance risk.

Nelson frames the up-front approach of a revenue integrity model in terms of the prevention and early intervention mindset that is popular in health care.

“Revenue integrity is more of a preventative approach to financial health, just like a wellness approach to your personal health,” he said. “As opposed to waiting for something to go wrong, you can take a preventative approach to analyzing your revenue cycle and prevent things from going wrong ahead of time.”