When Jane Berkebile, vice president of revenue cycle for OhioHealth (Columbus, Ohio), joined the organization five years ago, she was already impressed by its revenue cycle performance. “The triad for success, as I call it, was up and running when I came here: patient access, medical records, and business office activities were all reporting to the same individual and headed in the same direction,” she says. “That’s key to the success of any revenue cycle effort.” She adds, however, “I’m always searching for opportunities for improvement.”
That philosophy is key to OhioHealth’s approach to revenue cycle management, which involves tracking multiple performance indicators—on multiple levels, and for multiple stakeholders—and using the resulting data to identify areas that can be improved, as well as how best to improve them. “We’re never satisfied,” Berkebile says. “When you set targets and communicate—let people know where they are and what the expectation is—it’s amazing, because they will hit the target every time. But it’s a moving target, and it all comes out in the numbers.”
Berkebile says that there is no magic ticket to improving the revenue cycle. Instead, revenue cycle excellence is about making small, sustainable improvements to a variety of areas, beginning with high-level performance indicators like days in A/R and moving downward to, for instance, point-of-service collections per individual registrar. “I always like to say, ‘How do you eat an elephant? One bite at a time,’” Berkebile says. “Higher cash collections, reduction in days in A/R, cleaner claims going out the door: it all comes together to create improved results.”
Internal Objectives: KPIs on Three LevelsBerkebile’s revenue cycle team establishes key performance indicators (KPIs) as a means of assessing performance. At the highest level, she explains, these KPIs are relatively standard for health care organizations, and include days in A/R, bad-debt write-offs as a percentage of gross patient revenue, denial write-offs as a percentage of gross patient revenue, and so on. “These are high-level indicators that are very well known in the industry,” she says. “At that high level, the organization can measure its financial health.”
Taking KPIs a step further, OhioHealth also tracks a second level of indicators, which Berkebile characterizes as departmental in nature. As an example, she offers point-of-service collections, an area in which OhioHealth has seen big improvements since the beginning of her tenure. “We started collecting at point-of-service the day I started here,” she says. “We measure it for each of our five hospitals down to the departmental level; each department at each site has its own target and knows the expectation.” If a department fails to meet its target, the revenue cycle team has the ability to drill down to discover the problem; for instance, Berkebile says, “If the issue is that we need a financial counselor in radiation oncology, we see to that.” The results speak for themselves: Today, OhioHealth collects $12 million a year at the point of service.
Finally, Berkebile says, KPIs are also established on the individual level. “I can tell you what Susie Q in the Riverside emergency department is collecting this month based on what she should be collecting as part of the overall department,” she notes. “That helps us with coaching of the staff, identifying opportunities, and making sure we have the right person in the right job.” As a bonus, she adds that third-level KPIs also have the effect of adding a touch of peer pressure to individual employees’ performance: “You get a little bit of friendly competition going,” she says.
At the end of the day, however, third-level KPIs’ most important purpose is giving staff members concrete, measurable objectives. “It gives our staff the opportunity to get any help they need, and they can feel good about what they’re doing because they know exactly where they stand,” Berkebile says. “Our staff knows the job, and that’s the most fair way to treat them.”
Holding Payors AccountableMeeting objectives within an organization is one side of revenue cycle management; wrangling the numerous external parties that contribute to a healthy revenue cycle is the other. Most notable among these outside parties are, of course, payors. Berkebile advocates building strong payor relationships through frequent communication; at OhioHealth, this process is facilitated by the role of revenue cycle administrator. “Our revenue cycle administrator focuses on interacting with our payors so they’re reacting to us in a manner that is positive,” Berkebile says.
The revenue cycle department partners with the managed care contracting department on payor relations, ensuring, Berkebile says, that the organization always presents a united front in its discussions. “In my experience, intentionally or not, payors tend to look for weaknesses, ways to pit people from the provider against one another,” she observes. “We work with the managed care team so that the payor is fully aware of any issues we have. They know they can’t pit managed care against the business office.”
The revenue cycle team meets with the organization’s top five payors on at least a quarterly basis, and leverages the data-driven approach that is so successful internally to clarify objectives and expectations. “We take our top payors and put them onto a blinded scorecard so they can see what their performance is in comparison to other top payors,” Berkebile explains. “We provide them standard data and show how they compare on inpatient denials, outpatient denials, how long it takes them to respond to an appeal, and more.”
This transparency has the effect of challenging lower-performing payors to rise to the standards set by their peers, Berkebile says. “If we go into a meeting and say, ‘You’re the worst payor we deal with in terms of inpatient denials,’ we’re starting the conversation about barriers to successful resolution of these accounts.” When an issue like the above has been identified, the frequency of meetings between OhioHealth and the payor is increased, sometimes to as often as weekly; a joint action plan is developed, and stakeholders from throughout OhioHealth participate, including the business office, the managed care department, and the utilization review team. “They know that we’re looking at the data and that we expect results,” Berkebile says.
The same approach works with other external parties, including vendors. “We don’t just hand over, for example, our collections, and then complain when we don’t get the results we wanted,” Berkebile says. “We partner with our vendors because when they’re successful, we’re successful. We look at the data and we let them know where they are. They want to be better than the competition.”
Berkebile concludes that the data-driven approach to revenue cycle management ensures continuous performance improvement—and enables organizations to avoid the pitfalls of falling behind on financial objectives. “In revenue cycle, a misstep or two can be very difficult to recover from,” she notes. “We don’t want to find ourselves in a hole, so we pay attention to all this data.” As an example, she offers up reductions in final denials, a revenue cycle project OhioHealth undertook in 2010. “We saved the organization ten 10? million dollars in write-offs last year, and this year we’re tracking to an even better number,” she says. “It’s consistency that counts—continuing that measurement so that we continue to see savings and improved performance. We never give up.”
Cat Vasko is editor of HealthCXO.com.