June 9 , 2008

A Panoramic View of Revenue
By Selena Chavis
For The Record
Vol. 20 No. 12 P. 16

Healthcare organizations are improving compliance and cashing in by establishing revenue integrity departments.

It’s about finding the loopholes—those problem areas within patient charts that are either missed opportunities for revenue or problematic issues that will result in denials. It’s also about protecting a healthcare organization from compliance issues.

Revenue cycle has become an industry catchphrase representing the need for healthcare organizations to manage the process that begins when a patient arrives and includes all activities that must occur in order to complete successful billing. It’s an increasingly complex process, say industry professionals, and there are many people, systems, and activities that must work in sync to achieve the desired outcome.

“[Healthcare organizations] have long had revenue cycle professionals, but they didn’t necessarily understand the documentation within a medical record clinically. There’s a lot of money lying on the table within the medical record,” says Donna Wilson, revenue integrity manager at Roper St. Francis Healthcare in Charleston, S.C. “If you can have one department that understands the whole process and educates others … it becomes much more streamlined.”

Thus comes the move toward the revenue integrity department (RID). While the focus on revenue cycle management is not new to the industry, the application from organization to organization varies and often revolves around the finance and billing departments, says Wilson. RIDs entail the implementation of a more formal approach to revenue cycle and integrity that brings all necessary departments and systems together, including HIM, clinical, and finance, creating a more global view of the entire process.

Recalling previous work in healthcare finance, Joe Thear, vice president of product management at Virginia-based QuadraMed, notes, “As part of my responsibilities as director of finance, there was always a focus on how charges were coming down and whether or not there was enough documentation. A lot of hospitals have had people doing this in medical records and finance for the past 15 years. What RID does is broaden that effort.”

RID 101
While a clear understanding of coding principles is paramount to professionals working in revenue integrity, an RID’s mission is quite different than that of HIM. Lou Ann Wiedemann, MS, RHIA, manager of professional practice resources with the AHIMA, describes it as the department that builds the bridge between coding, billing, and clinical.

“[RID staff] are analyzing the coded data and explaining it to the rest of the organization,” she says, adding that such a broad-based view provides a clearer picture of trends, coding issues, denials, and other potential problems and paves the way for organizations to address these issues proactively. “Revenue integrity in the past has focused on retrospective audits. The more you can do on the front end, the less denials you have on the back end.”

Roper St. Francis Healthcare, a 594-bed system comprised of more than 20 facilities in four counties, established its RID in 2006. As department manager, Wilson is responsible for managing the denials system software and processes and educating physicians, coders, and clinicians to ensure accurate documentation to support billing. The department features six staff, and Wilson reports directly to the chief financial officer (CFO).

In contrast, Halifax Health, a 764-bed hospital in Daytona Beach, Fla., has had a revenue cycle team in place for nearly a decade. Coding manager Paula Royal says the team—which is separate from the coding department—has evolved to include a designated person working in each department.

“If we didn’t have a revenue integrity function, we would definitely be out of compliance,” Royal says, adding that the team identifies both the overpaid and underpaid issues while improving compliance and increasing revenue capture. “It swings both ways,” she says.

Why Now?
The push toward a more formal revenue integrity effort comes in response to increased pressure from various governing bodies, regulations, and auditors, including Medicare’s Conditions of Participation, the Code of Federal Regulations, the Medicaid Integrity Plan, Sarbanes-Oxley, and recovery audit contractors (RACs), says Wiedemann. “This kind of activity is going to bring together all those rules and regulations,” she says.

Thear says hospitals are finding that to adequately address these new complexities—and in some cases obstacles—the revenue cycle has to involve a team approach.

“This has become a very hot topic for hospital administration. The RAC audits by Medicare have put HIM on the defensive,” he notes, pointing to the Medicare demonstration project that has been underway in California, Florida, and New York.

The RAC Program, which entails auditors reviewing claims to recover overpayments, was initiated in 2005 and will be paid on the basis of a percentage of the overpayments recovered. The impact on providers is expected to be large, even if only a fraction of what Medicare estimates it overpays each year is recovered.

As a healthcare network that has fallen under the auspices of the RAC demonstration period, Halifax Health knew from experience that an RID approach would be necessary. “We really learned a hard lesson when DRGs [diagnosis-related groups] came out,” Royal says, noting that the health system was not as prepared as it should have been and lost a lot of money. “When APCs [ambulatory payment classifications] came out in 2000, we were proactive to make sure we would get paid correctly and not lose revenue like we did when DRGs came out.”

Since that time, the organization’s RID has continued to evolve to include technology that will provide the necessary tools on the front end to complement the efforts of revenue integrity. Specifically, the organization uses the QuadraMed compliance module as an interface with all of its chargemaster charges.

“[RIDs] can prevent RACs from taking money back,” Royal says. “It safeguards us from the effects of the audits.”

HIM Steps Up
In the ever-evolving field of HIM, revenue integrity represents another opportunity for professionals with solid coding backgrounds to further broaden their career paths, say many industry professionals.

“The HIM professional is perfect for the role of revenue integrity manager,” Wilson suggests, adding that while individuals with this type of background will have to be open to learning more about the billing and financial aspects of healthcare, a clear understanding of patient charts is a must.

“This is an opportunity for coders to expand their skill set and look at the big picture,” Wiedemann says. “They are used to looking at the handwriting. They are used to looking at the documentation.”

Of the six-person RID team currently at Roper St. Francis Healthcare, Wilson says there is one manager, one revenue integrity auditor, three staff dedicated to reviewing denials, and a rehab prospective payment system assistant who falls under a different reimbursement system. “If I had to do it all over again, I would have another coder. I’m currently the only one in the department,” she notes. Wilson adds that while it is important to have a multidisciplinary team, including registration, billing, compliance, HIM, and clinical, working with the department, a solid background in the intricacies of coding is beneficial within the department.

Education and communication are fundamental components of RIDs that take a large chunk of time, according to Wilson. “We are able to show financial gains within a department by educating. This education encompasses explaining how documentation affects coding and eventually reimbursement. Education takes more time, but it gets the job done right,” she says. “In the end, we have less rework and more happy bills.”

RID Qualifications
According to Wiedemann, while HIM professionals can typically make a successful transition to the role of a revenue integrity professional, she has seen respiratory therapists who made excellent choices for these positions. “It’s about having that expertise,” she says, pointing to such characteristics as attention to detail and a clear understanding of the medical record. “They have to be able to communicate with clinical staff. It’s the person who can bridge that gap.”

Thear notes that the primary duties of a revenue integrity manager typically include the development, maintenance, and monitoring of hospital charge description masters for compliance, along with order entry and charge capture at the department level.

These professionals will often interface and collaborate with most hospital departments and may be responsible for working with IT staff to recommend and implement appropriate technology solutions or helping to coordinate departmental training on revenue capture policies and procedures.

Typical activities include working with financial services and coding compliance professionals to ensure that the codes on the chargemaster are accurate and current. Revenue integrity professionals become champions of the charge capture process and related activities, according to Thear, and are typically responsible for coordinating the synchronization between the chargemaster and all charge capture systems.

Revenue integrity professionals gain a big picture view of the revenue cycle and then are able to analyze and make recommendations relevant to both compliance concerns and opportunities to capitalize on missed revenue opportunities.

According to Wiedemann, the concept of an RID often starts with the HIM professional, but it’s still a new concept and has yet to take shape in many facilities. “If you are an HIM professional, you need to be talking to the CFO,” she says. “It can only result in good things for the coding department. HIM professionals have to be out there educating CFOs.”

Acknowledging that any request for additional resources is not going to be an easy sell in an era of lean budgets and tighter staffing ratios, Wiedemann suggests, “No one wants to see money going away inappropriately.

“FTEs [full-time employees] are so stretched right now, I don’t know if anything is an easy sell anymore,” she says. “You have to show your ROI [return on investment] to the CFO.”

Although a new concept, industry professionals suggest that if an organization has an RID, it is demonstrating its viability through case mix, Centers for Medicare & Medicaid Services quality reports, denials, and discharged not final billed to name a few.

ROI at Roper
Since creating its RID, Roper St. Francis has decreased denials alone by 30% and seen a significant increase in revenue, according to Wilson. “A clear understanding of denials helps us see the whole process,” she says. “Then we can identify the problem areas: Is it registration? Is it coding? Billing? Which department do we target next? Who do we need to educate?”

Wilson says the department has enjoyed success by narrowing its view of denials to those equating to $10,000 or more. “We make real process changes that way. There’s no way revenue integrity can review all denials, so we review the root cause of the denials to identify patterns,” she says.

Noting that one successfully billed account can often pay the salary of an revenue integrity auditor, Wilson says it should be an easy sell for many facilities.

Alongside benefits achieved through efficient and accurate billing are the added advantages of increased productivity in HIM. “I know the amount of time it takes for a coder to work with a biller really affects productivity and the ability to put a chart together,” Thear says. “It impacts the coder by reducing the number of errors that this individual might have had to track down in the past. They can focus on coding.”

Wiedemann concurs, adding that the RID’s education component helps narrow the opportunity for physician and clinician error. “Accurate physician documentation is paramount. Physicians are so busy, they can’t keep up with [all the complexities] of the regulatory environment,” she says. “It allows us to explain to physicians and clinicians why we do the things we do in coding.”

While the field of RID is evolving, Thear believes the concept will be embraced by many healthcare organizations over the next five years. “It’s catching on more now. It had been mostly a focus of directors of finance,” he notes. “Now, it’s being embraced more by HIM directors.”

— Selena Chavis is a Florida-based freelance journalist whose writing appears regularly in various trade and consumer publications covering everything from corporate and managerial topics to healthcare and travel.