September 2, 2008

The 30,000-Foot View — Transcription and Revenue Cycle Management
By Linda M. Sullivan
For The Record
Vol. 20 No. 18 P. 6

Medical transcription is a fascinating business and craft. The best transcriptionists are those who are truly engaged and excited about their careers. Medical transcription offers myriad opportunities for learning on a daily basis. That love of learning, of course, needs to be layered on a good foundation of knowledge, a solid grounding in grammar, great computer skills, and, because so many work from their homes, self-discipline.

At the management level, medical transcription is an incredibly dynamic, exciting, and ever-evolving industry. Here, too, there are daily opportunities for learning.

Moving from microcassette tapes (remember the days of typewriters and “tanks”?) to today’s technology-driven efficiencies has been amazing to witness. As a transcription company owner, making decisions about personnel, monitoring quality assurance, speaking with clients, staying ahead of the technology curve (which can be a daily challenge), and marketing … well, let’s just say I love my day and find these challenges to be intimidating at times but ultimately invigorating.

No matter the occupation, it’s easy to get caught up in day-to-day duties, but perhaps more so in medical transcription because of the immediacy factor—a patient is waiting on a gurney to be put into an ambulance, and that transfer summary needs to be transcribed immediately.

Taking all this into account, it can be easy to lose sight of the big picture. Where does medical transcription fit into a healthcare facility’s operational cycle?

Beyond the obvious that accurate and timely medical transcription provides the document for patient encounters within the healthcare community, transcription is also one of the drivers of revenue cycle management.

For example, a patient goes to see his or her primary care physician for a sore throat, and the healthcare provider subsequently dictates a note about the visit. The dictation is captured electronically by a variety of methods, with handheld digital recorders and telephony into a digital system (on site to a service or an in-house system) being the norms. The resulting transcribed document actually begins the payment cycle.

The completed document, after the physician signs off on it, then resides in an electronic medical record, in some other electronic form, or on paper. At this point, coders go through the document and, based on the content, assign CPT and ICD-9 codes. The critical connection between an ICD-9 code and a CPT code is that the diagnosis must support the procedure’s medical necessity. The coded document is then sent to the billing department, where patient account specialists, patient account managers, and outpatient or inpatient billing consultants face the daily challenge of receiving the maximum appropriate reimbursement for services provided. Their job is to process, submit, and follow up on claims to private insurance companies, as well as the government, specifically Medicare and Medicaid. This is a simplistic overview of what is in reality a complicated process.

While the No. 1 overriding goal of every facility delivering medical care is the quality of that care, the reality is that money is a driving factor, as it should be. Healthcare services are unconscionably expensive. A Government Accountability Office (GAO) report dated February 2, 2007, highlighting the United States’ financial viability states that healthcare spending as it is today is unsustainable. The long-term outlook reads, “Over the next few decades, the nation’s fiscal outlook will be shaped largely by known demographic trends and rising health care costs. As the baby-boom generation retires, federal spending on current retirement and health programs—Social Security, Medicare, and Medicaid—will grow dramatically.”

A May 16, 2008, GAO report goes on to say, "Over the past several decades, health care spending per capita has grown on average about 2.5 percent faster than average annual GDP [gross domestic product] per capita, absorbing increasing shares of the nation’s resources, and this rapid growth is projected to continue. For this reason and others, rising health care costs pose a fiscal challenge not just to the federal budget but to American business and our economy and society as a whole."

In an unusual move, the Senate Finance Committee held a full-day forum in June on the state of the healthcare delivery system. According to a recent Business Wire story, Aetna Chairman and CEO Ronald A. Williams made the following comments regarding the testimony of Federal Reserve Bank Chairman Ben Bernanke: “In testimony today before the Senate Finance Committee’s Health Reform Summit, Federal Reserve Bank Chairman Ben Bernanke made important and insightful observations about the cost of health care in America; the need for a mix of policies to address how care is delivered and paid for; and the impact of the nation’s 47 million uninsured on the gaps in the quality of care.”

Recently, Medicare reimbursements to physicians were cut by 10.6%. Until Congress vetoed the cuts, doctors in some states were no longer taking new Medicare patients. While the day was “saved,” what no one is mentioning is that the reinstatement lasts only until January 2010, less than 18 months from now. One can only speculate about what will happen at that time, or the time after that, or the time after that.

With the possible exception of some specialists in major metropolitan areas, physicians make significantly less money than they did 10 years ago. A physician practicing obstetrics and gynecology recently told me that her salary was cut by 40% seven or eight years ago when the big changes started occurring in healthcare reimbursement. Regardless, she felt it was worth it to have her own practice, so she chose to live with reduced pay. However, that option has not worked out, and she is now affiliated with a large group practice at her local hospital. That’s not necessarily bad, but it was not how she envisioned her medical practice when she became a doctor.

What do these dire forecasts and predictions for the future of healthcare mean for medical transcription? Less money. While fast, accurate medical transcription drives revenue cycle management, it is still viewed by those balancing hospital and clinic budgets as a cost center, a commodity if you will, instead of a revenue driver. It will cut both ways as the industry moves into an uncertain future. Prices have already been dramatically decreased, but it is almost certain that all healthcare facilities will be looking for even more ways to reduce expenses. In fact, a client recently said, “We’re always looking for a lower cost for transcription, but I don’t know honestly how you could cut your rate to us. How transcriptionists survive on what they make today is beyond me.”

Looking at healthcare from above, medical transcription is the revenue driver and delivery system for most patient documentation. Transcription services need to become even better at delivering accurate, timely patient documentation and being responsive to client questions and concerns. But more than that, they need to squeeze the proverbial technology sponge to wring every ounce of its efficiency and cost-effectiveness because we’re going to need it.

— Linda M. Sullivan is president of New England Medical Transcription; the founding coordinator and first president of the Pine Tree Chapter of Maine, an Association for Healthcare Documentation Integrity chapter; and a past president of The New England Association for Medical Transcription.