Prioritizing Revenue: Modernizing Workflow Tools By Derek Johnson and Tyler Kurasek Colburn Hill Group February, 2017

www.colburnhill.com 1

EXECUTIVE SUMMARY US Healthcare reimbursement is changing rapidly and will have significant impact on Revenue Cycle operations. Solving common industry issues related to workflow and IT investment strategy are paramount for thriving in the value-based reimbursement landscape. Thoughtful leaders should explore innovative companies and IT solutions appropriate for the downward pressures on costs to collect. Modernizing Revenue Cycle IT requires laser focus on building intelligent software engines that deploy and scale at low costs. Colburn Hill Group offers technology suited for realities of value-based reimbursement, and specializes in computer assisted workflows that prioritize revenue generation.

www.colburnhill.com 2

TABLE OF CONTENTS

EXECUTIVE SUMMARY 1

INTRODUCTION 3

THE INDUSTRY PROBLEM 4

THE COLBURN HILL APPROACH 5

CONCLUSION 8

FOR MORE INFORMATION 9

www.colburnhill.com 3

INTRODUCTION The market for Revenue Cycle Management (RCM) is expected to grow by nearly 12% annually over the next five years - by 2019 the US market is expected to reach $32 billion USD.1 Much of this growth will be hospital investment in technologies aimed at improving revenue collection. Corresponding with the growth of investment in revenue cycle IT, US hospitals will be under increasing pressure to shift to risk based payment models.2 The rising investment in revenue cycle IT and the movement toward value-based payment models place increasing financial stress on hospital systems. Value-based payment models incentivize hospitals to provide the highest level of care at the lowest cost possible. As a result, investment in RCM IT systems must be cost effective and have positive returns on investment (ROI). However, most revenue cycle IT platforms are investment-heavy and require multi-month implementation projects – delaying ROI and increasing the cost to collect. When seeking work queue management solutions, many PFS departments look to complex tools that are expensive to implement, require significant training, and are difficult to maintain. Too often, these tools replicate existing functionality or offer features that do not actually bring additional value, driving up costs with no corresponding collection or cost reduction impact. We believe the right workflow tool performs only a handful of simple tasks – directing staff to the right accounts at the right time, tracking activity, and reporting on productivity. Any tool which provides these high value outcomes at a reasonable price point is more likely to be successful and provide a positive ROI.

1 http://www.beckershospitalreview.com/finance/25-things-to-know-in-revenue-cycle-management.html 2 http://www.prnewswire.com/news-releases/revenue-cycle-management-market-growth-to-2020-propelled-by-rising-investments-in-healthcare-it-566161821.html

www.colburnhill.com 4

THE INDUSTRY PROBLEM Traditional revenue cycle software fills gaps that Patient Accounting Systems (PAS) struggle to adequately perform. The number one issue revenue cycle IT solutions try to solve are prioritized work lists. Unfortunately, the common strategy to sell clients on investing in workflow improvement is to build a platform that replicates PAS system information. Most platforms include unnecessary add-on features that staff don’t use – driving up the cost of the system, increasing the time to implement, and slowing software response time. While advancements in technology have decreased costs in most industries, revenue cycle costs have been increasing! According to a McKesson study, cost to collect between 2011 and 2013 increased from 1.9% to 2.6% for hospitals with high performing revenue cycles, 2.3% to 3% for the median quartile, and 2.8% to 4.2% for the lowest performing hospitals.3 While RCM software can be investment-heavy, hospitals that fail to address gaps in their PAS workflows will be at greater financial risk as payers shift to value-based reimbursement models. Many hospitals still rely on antiquated Excel and paper reports to manage inventory and provide work lists – resulting in collections less than expected reimbursement and ballooning accounts receivables (AR). Workflows that are unable to measure staff productivity and outcomes won’t adequately reduce costs to collect. RCM leaders should invest in low-cost, high-value solutions that augment their PAS rather than attempt to replace PAS functionality. These problems are the magnified by the user experience: how line staff interact with these tools and use (or don't use) the capabilities.

3 http://www.beckershospitalreview.com/finance/25-things-to-know-in-revenue-cycle-management.html

www.colburnhill.com 5

One of the core outcomes that should come from a workflow tool is to present accounts in a logical order – tool configuration should reflect the best thinking of PFS leadership on which claims deserve priority. Unfortunately, most tools allow present users with dozens, sometimes hundreds or even thousands of accounts. When left to users to prioritize lengthy work lists, they tend to pick and choose among the accounts presented. Whether staff are seeking easier accounts or simply choosing ones with a higher likelihood of success, users rarely start at the top of their list and work their way down. The result is to nullify all the investment made to create a logical order of accounts! While many industries have adopted advanced intelligence to improve their outcomes work queue management tools are still rooted in 1990s logic: generally based on some combination of payer, age, and balance, with the occasional inclusion of initial denial information. Based on this antiquated analysis, workflow tools attempt to present the most valuable accounts, but they fail to incorporate important information that is readily available from other data sources. Furthermore, these tools don’t reflect how staff work accounts, falsely assuming that working one random account is just as good as any other account, and ignoring the benefits of working similar problems together. Finally, reporting is often cumbersome. In part because these tools are striving to accomplish so much, they offer a great deal of data and therefore include complex reporting mechanisms. The complexity discourages use and can prevent managers from accessing even the most basic (and often most valuable) reporting.

www.colburnhill.com 6

COLBURN HILL APPROACH

As part of our work assisting clients with AR management, Colburn Hill Group (CHG) recognized a need for a workflow tool for our internal staff. The tool we developed is lightweight and flexible, requires minimal training, is nimble enough to revise work lists on the fly, and does not dominate the desktop real estate. Most importantly, the tool enables our staff to work accounts in a logical fashion while providing robust metrics and reporting. The result of that effort was Priority, a modern work queue management system designed for PFS follow up tasks. Able to convert any data file or Excel spreadsheet into a prioritized work queue displayed on a minimalist window, Priority augments PAS information and allows staff to perform almost all activity in the host system. Priority is configured using proprietary business intelligence (BI) rules and can be fully implemented in less than one week, providing state-of-the-art logic, simple to use functionality, and a suite of reporting and performance metrics at minimal cost. Priority’s logic assembles accounts based on revenue generation and staff efficiency – leading to more cash with fewer touches. Priority’s software has several unique and advanced features compared to industry standards. Priority’s featured highlights include: Workflow: ✓ Interface: the strategically minimalist interface provides users with a

maximum of 3 accounts to work at a given time – disabling the ability to hunt for easy or low value work. The limited screen size augments use of the patient accounting system for account information.

✓ BI Algorithms: Priority goes beyond the standard age and dollar amount prioritization of many backend work lists. Using business

www.colburnhill.com 7

intelligence algorithms, Priority focuses on revenue generation as the key element for selecting which accounts to work first.

✓ Grouped Accounts: Priority feeds similar accounts to staff in batches of three. Enabling users to resolve similar accounts that can be updated and notated simultaneously increases staff efficiency.

✓ Resolution Hints: each follow-up account is accompanied by a hint

on resolving the claim balance – reducing triage time and allowing staff immediate insight into the next action.

✓ User Defined work organization tools: Using techniques gleaned

from social media, Priority allows users to seamlessly escalate or send accounts to other users by typing “@username” in the body of the note text or track issues using the hashtag symbol; for example, #racaudit would enable staff and management to track, work and report on any accounts under recovery audit.

Reporting Suite: ✓ Dashboard: the landing page dashboard provides all users the same

view of each real-time metric. Metrics include: count of accounts by assigned user, total account inventory by user, and due for work status to monitor user work load and the elimination of blackholes, and count of accounts worked by users in the current business day.

✓ Productivity: comparing staff productivity by the accounts they work

and resolve, not simply the number of touches. Production reporting also includes the ability to quantify the staff actions that generated cash collections and the amount of cash posted.

✓ Account Status: the ability to view every account and the current

status allows for a powerful view of the account population.

CONCLUSION Hospitals are at a crossroads in today’s changing RCM landscape. Hospital responses to cost pressures brought on by value-based reimbursement range from: over-investment on software that replicates existing PAS, to no response at all, choosing to maintain antiquated Excel workbooks – or even keeping a system executed on paper. The combination of Priority’s features and reporting suite is powerful for any revenue cycle leader looking for incremental cash improvement, increases to staff productivity, and the proper tools to manage inventory. Priority augments hospital Patient Accounting Systems – keeping the cost of the software below competitor pricing and leveraging investments already made in PAS IT. Priority’s minimalist interface coupled with computer enhanced BI rules force staff to work the highest value accounts, at the right time, and in the right order. Modernizing revenue cycle operations requires a deep commitment to reducing costs to collect. Priority enables RCM departments to do more work and collect more cash with fewer resources, which is an absolute necessity in the changing landscape of US healthcare reimbursement.

www.colburnhill.com 9

FOR MORE INFORMATION Please contact us with questions, comments, or for additional information. The Colburn Hill Group and authors of this paper can be reached through our website:

www.colburnhill.com/contact.html

or

by e-mailing info@colburnhill.com

We look forward to hearing from you!