Applying revenue integrity metrics across the full RCM cycle

Editor’s note: The following article is adapted from Advanced Strategy for Medical Practice Leaders, Financial Management Edition.

To apply organizational metrics that help strengthen the revenue cycle, you must formulate a strategy that considers every step. That means looking at every function and creating a metric that drives toward operational improvement and increased revenue cycle integrity.

Revenue integrity (RI) is a critical component of the revenue cycle and financial management of any healthcare organization. A successful RI program will identify not only sources of leakage but the root cause of those sources. It will then apply internal controls that may be replicated across workstreams. The integrity component of an RI program includes predicting future trends and external changes that may impact internal controls and either adjust or evolve to new needs.

A few drivers that will affect an RI program include cybersecurity threats, workforce changes, transition of EHR and/or practice management (PM) software, regulatory compliance changes, technology service innovations, payer reimbursement guideline adjustments and patient care trends.

If your organization does not have a formal RI program, there are most likely processes in place that are based on ethical business standards to ensure compliance, efficiencies in workflows and operations as well as optimizing income potential. As you begin to develop your formal RI program, consider:

1. Ethical business standards, policies and processes that keep your organization compliant with regulatory agencies’ requirements as well as insurance reimbursement guidelines
2. Develop and continuously re-engineer internal operations to adapt to internal workforce/providers and external patient/customer needs that streamline workflows to allow for duplication and automation of processes
3. Optimize earning potential by following reimbursement guidelines, implementing service enhancers, capturing all billable services and optimizing technology.

Most healthcare organizations are familiar with the “revenue generating balancing act” — counting dollars without crossing the line and breaking the rules. We must always deploy ethical decision-making when using healthcare services as a revenue generator. Internally auditing your organization’s financial business practices is essential to ensuring that compliance and ethical standards are applied companywide. Instituting a culture of compliance is a key factor within an RI program.

Revenue integrity application

Let’s apply RI principles to a financial scenario: A large multispecialty practice cannot put their finger on why their inpatient monthly financial projections do not meet expectations. After an internal review, it has been found that there has not been a significant change in unique visits or a decrease in the number of providers rendering services. The billing department has complained that they need more staff to assist with data entry for inpatient hospital services.

The current inpatient billing process calls for physicians to drop off daily superbills to the charge entry staff, who are responsible for using shared access to the hospital’s EHR to gather demographic face sheets for each patient’s encounter. The face sheet is then given to staff members to register patients into the practice’s EHR. There are assigned charge entry staff to enter, scrub and submit claims. Ultimately, there are several opportunities within the organization’s workflows to deploy RI protocols.

Compliant business standard

• Current — Hospital charges will be billed within 48 hours of receipt of face sheets
• RI application — Hospital charges are 30% of practice revenue and require a hybrid manual and auto- mated process for data collection, validation, entry, reconciliation and submission that includes input and monitoring between physicians, billing staff and leadership

Use of technology/automation

• Current — Manual process of hospital superbills given to staff from physicians for manual data entry
• RI application — Create staff role-specific hospital EHR/PM software access for visit data gathering. Create a matrix of data elements needed from the hospital’s system for billing. Audit staff access quarterly to remove expired access.

Establish key performance indicators (KPIs) and benchmark

• Current — Director of Finance projects the number of unique hospital visits using the physician call schedule.
• RI application — Create hospital visit benchmark using the last 12 to 24 months of unique encounters. Implement KPIs to track performance and to re-establish new benchmarks as needed.

Internal audit

• Current — Staff run hospital billing productivity reports by provider.
• RI application — Create a reconciliation report to internally audit encounters against billed services. Assess hospital billing process, document findings, and identify best practices.

Accountability and training

• Current — Not in place.
• RI application — Utilize best practices from internal audit to create policy documents and procedure documents for each step of the hospital billing process to include provider documentation. Assign staff to necessary steps. Create and deploy training program. Update job descriptions. Create a look-back period.

Workflow re-engineer

• Current — Disjointed manual processes.
• RI application — Utilize updated policy documents and training to include automation within the new workflow. Request staff feedback on new processes for adjustments as needed.

Proactive adjustment to trends

• Current — Not in place.
• RI application — Utilize workflow assessment to identify workstreams that will be impacted by changes in regulations, software access, staffing changes, and service delivery. Create a flexible policy and procedures for these areas.

Evaluating for integrity

Focus on areas where your metrics, KPIs and dashboards indicate opportunities for improvement, and perform an analysis that identifies your reactive, preventive and optimization approaches.

Evaluation happens in three phases:

1. Reactive
2. Preventive
3. Optimize

We need to look at each phase through two primary activities: obtaining/assessing data and evaluating opportunities.

Reactive phase

In this section we want to identify what is currently happening in our organization and what that data tells us. This is the stabilization phase. Investigating data often identifies areas where immediate action needs to be taken. That quick reaction should focus on stopping the bleeding. Think of this section like an emergency response.

Preventive phase

In this phase, we are looking at preventing these situations from happening again. So, we want to look at the data and determine the root cause. Determine what can be prevented and evaluate the opportunities to negate those issues.

Optimize phase

This is the fun section. This is where we evaluate our data a third time. We have stabilized any issues and are preventing what we can. Now it’s time to determine what is considered “optimal” for the given focus area. Once optimal has been defined, determine how to get to optimal and the processes that can be streamlined to create opportunities to achieve optimal status.

Table 2 includes questions to indicate how you should approach each phase. Remember to obtain and assess data, evaluate opportunities and effect change for each phase before moving on to the next. In each phase, the reevaluation of data is critical because it serves as a lookback point to ensure that you are progressing toward your goals.

As you evaluate the data, consider KPIs that can support your decision-making processes across the financial continuum:

• Unique patient visits — help to identify staffing needs, room utilization, appointment optimization
• Diagnosis utilization — helps identify which high-risk patients are most prevalent in the community
• Referring provider — identifies patient sourcing and potential collaboration opportunities
• Adjustments — indicates collections performance, opportunity to enhance the specificity of adjustment codes
• Payer mix and payer income — grants guidance on participation needs and opportunities for fee schedule negotiations
• Patient age and gender — can support preventive services marketing efforts and community outreach, aids identification of supply/equipment needs.

These are examples of just a handful of areas that you should evaluate to strengthen the overall integrity of your revenue cycle. Evaluate industry benchmarks as well as your own benchmarks for past performance.