One provider improves revenue by $15 million in 10 months
Bronx, NY - Three years ago, Montefiore Medical Center in Bronx, N.Y., set out to overhaul its revenue cycle by increasing productivity and payment rates and reducing denials.
“Our goal was to transact business with payers through the use of HIPAA business transactions and then apply intelligent software,” said Jim McNiff, Montefiore’s associate vice president of health services receivables. “We believed that the operation of the revenue cycle had to change if we were to bring our performance to the next level.”
McNiff says his team implemented what he calls the “no-touch revenue cycle” to reduce costs and improve cash flow. Automation is the linchpin of the new process.
“By using intelligent software you can eliminate errors and denials,” as Montefiore has been successful in doing, McNiff said.
In the first 10 months of 2011, Montefiore eliminated over 100,000 denials and reduced write offs by $15 million.
“I believe we have the potential to reach a 30 percent reduction while reducing denials and improving our revenue cycle metrics,” he said, adding that the changes required to reach this kind of ROI are not a quick fix.
“The HIPAA transactions have been on the books since 1996; however, the model of connecting these transactions to intelligent software is relatively new,” said McNiff. “The recognition under the ACA regulations provides the impetus to transform the way we do business.”
“Managers in the revenue cycle will become process engineers building best practice into their software,” said McNiff. “The relationship between the IT staff of the provider and the payer is where improvements and savings will be generated, not at the contract table.”
To achieve its goals, Montefiore worked with Austin, Texas-based healthcare IT vendor Davincian Technologies, Inc.
“Automation and real-time actionable intelligence is critical to driving the cost out of the billing and collections processes because of the tremendous volumes and the amount of complexity that hospitals are dealing with today,” said Mike Bickers, DaVincian’s vice president of business development.
According to Bickers, automation saves time and money by helping with data quality assurance, address and eligibility verification, authorization management and calculation of upfront patient payment amounts, among many other tasks.
“Automating a typical 300-bed hospital in these areas can result in over $5 million net cash improvement per year, not to mention the increased cash flow benefits that will be realized,” said Bickers.
Steve Collins, director of business development for Carmel, Ind.-based healthcare solutions firm Zotec Partners agrees that automation is critical to driving cost out of the revenue cycle.
“The medical billing industry has been built around a workflow of paper forms and ledgers, requiring human resources to physically open mail, enter data, appeal claims that are denied by payers, make phone calls to patients and so on,” said Collins. “The key to efficient billing is to drive out repetitive human processes and replace them with computerized technology.”
Collins believes the results can be dramatic.
“A medical practice implementing automated billing to replace a purely manual system will be transformed,” he said.
“Medical providers need to understand they are no longer running medical practices,” he added. “They are running medical businesses that require expertise, efficiency, automation, accuracy and data in order to survive and be competitive.”