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Lots to Do for CFOs the Rest of 2017

By Heather Hogstrom

From regulatory changes to emerging technology, there are plenty of variables CFOs should keep their eye on in the coming months. Karen Hoppe, a consultant at Craneware, details some of the upcoming issues affecting health care revenue and what CFOs can do to be ready.

Prepare for Uncompensated Care and Patient Self-Pay
The American Health Care Act (AHCA), as passed by the House of Representatives in May, would likely increase the number of uninsured patients. A recent report from the Congressional Budget Office estimates the Affordable Care Act replacement bill would leave 23 million additional people without insurance by 2026, while a subsequent report from the Centers for Medicare & Medicaid Services’ Office of the Actuary estimates the number to be 13 million.

Pending the Senate’s draft of the bill, there’s a lot of uncertainty about the proposed changes and how the AHCA will affect consumers as well as hospitals’ overall financial performance. “CFOs really have to be prepared for an increase in uncompensated care,” Hoppe says. “So it’s important at this point in the year for CFOs to closely monitor their expenses while maintaining quality care, which is very difficult at this time, halfway through their year.”

If the AHCA puts more patients in the uninsured population, hospitals will still be caring for those patients. “Typically, hospitals look to insurance payments as their way to make money, but with all the consumer-driven, high-deductible health plans and the potential increases in the uninsured population, CFOs need to find creative ways to ensure patient obligations are collected,” she says.

One way for hospitals to do that is by making sure that patient satisfaction and quality are up to speed. Patients want to be treated fairly and receive the best care at a reasonable price. “Pricing transparency allows patients to make more informed decisions about where they go for certain services, so it’s important for CFOs to pay close attention to their own market and patient satisfaction scores in order to retain their volume,” Hoppe says, adding that for elective surgeries and nonemergency care, patients will want to choose the facility where they will incur the lowest out-of-pocket expense.

Create New Revenue Opportunities
Hoppe says CFOs also need to be keeping an eye on how they are going to expand their services to thrive in a competitive market. Hospitals are opening offsite clinics and centers for imaging, dialysis, cancer, and urgent care, so rather than looking at inpatient volume for their source of income, they’re instead looking at where they can create new opportunities for outpatient revenue.

"Patients are on the lookout for the best value for their dollar. It's important for hospitals to keep patients in network in order generate new revenue and control costs," she notes.

Understand How to Utilize Technology
“I think mobile technology can enhance the overall patient experience and transparency for the hospital,” Hoppe says. “Hospitals could use mobile technology to stay in touch with the patient from the time the appointment is scheduled right through claims payment.”

Uses include texting appointment reminders to patients; collecting patient data prior to the visit, which could improve the quality of care and prevent claim denials related to medical necessity for screening tests; providing information about the patient’s out-of-pocket expense prior to their visit; and allowing patients to pay their out-of-pocket on their mobile phone, eliminating the need to mail patient statements.

Telemedicine is another growing technology. As insurance companies start offering telemedicine, hospitals need to understand how to use the technology to enhance their market share and reach consumers who may not have the means to get to the hospital.

The more technology hospitals implement, the bigger the need for cybersecurity. “Hospitals must protect the privacy of the patients and consumers—that’s a high priority,” Hoppe says. “Hospitals have multiple vendors and interfaces that pass information throughout the hospital, and often include protected health information, so hospitals have to be ready to invest additional resources and operational needs to address this risk.”

Ensure Data Are Complete and Meaningful
CFOs must be cognizant of the quality of their organization’s clinical documentation and the effectiveness of their EMR. “With the value-based payment programs, CFOs have to make sure they have quality data to measure their risk,” Hoppe says. “Many of the hospitals have put clinical documentation improvement teams and programs in place to ensure that they have complete data in their EMRs, but I think it’s very difficult to get physician buy-in. Physicians find it difficult to provide documentation at the level of specificity required to support the complete and accurate coding of claims."

She adds, “It’ll be important for hospitals to continue to educate and guide physicians to improve the quality of the documentation so that the coder can code to the level of specificity in order for them to meet their quality measures. The physician buy-in and continuous education and monitoring will be an important focus for CFOs to see that their contract models are profitable.”

CFOs also need to look at data analytics and how to make their data meaningful to help drive quality care and lower costs. However, according to Hoppe, they may not have the resources to do so. “I think CFOs are probably struggling with getting meaningful data, given that the doctors are struggling with documentation. Having the resources to be able to sit and analyze data, in an effort to understand their patient population, is another challenge,” she says.

Keep an Eye on Quality
Hospitals and physicians need to keep an eye on how the Medicare Access and CHIP Reauthorization Act is going to affect their business, Hoppe says. “Care delivery is focused on quality and making patients healthier. Physicians will be penalized if they don’t meet the quality metrics,” she says. “On the other hand, there is a financial incentive for the physicians who do." Hoppe says physicians must document thoroughly and accurately to satisfy the metrics. "This is a challenge for physicians who want to focus their time on treating patients rather than the administrative burden of regulatory documentation requirements," she says.

Maximize Reimbursement
According to Hoppe, “CFOs are going to be looking for every penny, especially with all of the reimbursement reductions. Overall I think that revenue cycle tools for charge capture, denial management, and audit tracking are going to be critical for identifying missing charges and denial trends. Hospitals will need to figure out how they can maximize their reimbursement while reducing compliance risks.”

Charge capture can help CFOs identify missed revenue opportunities, Hoppe says, noting that the pharmacy can be especially troublesome. “It’s important that the CFOs really start looking at where they have missing revenue in order to maintain their cash flow,” she says, adding that quarterly chart to bill audits be conducted to ensure that all charges are being captured and appropriately reimbursed.

“The insurance companies are finding creative ways to deny and delay claims payment. The reasons to deny are never ending. It will become increasingly difficult for hospitals to be profitable in the years to come,” Hoppe says. Cleaning up denials can be a huge boost to revenue. “It’s imperative that the hospital’s revenue cycle team is reviewing their denials monthly, by payer, to really understand their root causes and put action plans in place,” Hoppe says.

“It’s very important that CFOs look at all of their denials and understand where they can work with insurance companies to regain their cash flow,” Hoppe says.

— Heather Hogstrom is an editorial assistant at For The Record.