Outpatient RCM Gap Analysis for a Better Bottom Line

Sandra Greefkes
VP Product and Partner Marketing, XiFin, Inc.

Michael Corley
VP Implementations, XiFin, Inc.

This blog is part of a series. Read Part 2 here.

XiFin sponsored a research project which was conducted by The Healthcare Financial Management Association (HFMA) to collect information from a diverse group of more than 160 US-based HFMA members about outpatient revenue cycle management (RCM) practices. In August, we presented the research findings to HFMA members via a webinar. The webinar included lessons learned from our experience with dozens of outpatient RCM implementations and case studies from two XiFin hospital customers. The webinar also covered the role of artificial intelligence (AI), analytics, and automation play in RCM related to operational and financial performance. That final topic will be covered in a future blog post.

The HFMA research participants were asked what type of systems and/or services they currently use for outpatient or ancillary services revenue cycle management.

• 52% responded that their organization uses its EHR/EMR
• 23% responded that their organization uses a purpose-built RCM solution
• 8% reported outsourcing their outpatient and/or ancillary services billing and RCM
• 7% reported using a practice management (PM) system
• The final 10% were unsure

The research survey then asked participants their approach to managing RCM processes today as well as plans for the future.

• 67% of respondents reported that their organization currently manages the entire RCM process for in-patient, outpatient, and ancillary services in-house
• 22% reported that they currently manage in-patient RCM processes in-house and outsource some of their outpatient and/or ancillary services RCM
• 6% of respondents currently outsource all of their RCM processes
• 5% of respondents indicated a desire to manage the entire RCM process for in-patient, outpatient, and ancillary services in-house in the future
• 21% reported a desire to outsource some or all of their outpatient and/or ancillary services RCM in the future while maintaining in-patient RCM in-house
• 3% reported a desire to outsource all of their RCM processes in the future

Research participants then reported their top RCM challenges not currently addressed by people, processes, technology, or services. The top three challenges reported were:

1. Denials and appeals management
2. Prior authorization
3. Payor relations

Other challenges reported include capturing clinical/diagnostic data for appeals management, referring physician engagement, patient engagement, and interoperability with other systems.

To assist in connecting RCM approaches and practices back to business priorities, participants were asked what business drivers influenced their position on how they handle outpatient RCM the most. Top responses included:

Surprisingly, although customer needs and physician experience are intricately connected with patient experience, they were not considered the most important drivers. We believe that a three-pronged focus on physician experience, customer needs and patient experience will have a greater compounded impact on patient experience rather than focusing on it in isolation.

RCM Leaders Can Have an Important Impact on Patient Experience Initiatives

From a patient experience perspective, the clinical experience is paramount. That said, the financial experience also plays an influential role and RCM leaders and their teams can have a material impact here. Enabling accurate estimates of patient financial responsibility (i.e., out-of-pocket) is important not only for the patient experience but for compliance with the Hospital Price Transparency Rule and the No Surprises Act as well. For example, of the three hundred “shoppable services” under the Hospital Price Transparency Rule, approximately thirty are available in the outreach lab, and CMS has announced enforcement and the first penalties, which can be up to $5,000 per day. These same compliance requirements extend to other outpatient, ancillary and ambulatory services.

Real-World RCM Case Studies Support the Research Findings

Case Study 1: Mount Carmel Health System

In a previous HFMA webinar an RCM leader from Mount Carmel identified three main challenges with their outpatient lab revenue cycle management:

1. Missing and invalid data, which takes time and resources to track down and correct, can jeopardize timely filing, as well as increase AR days and the risk of write-offs.

2. Coverage verification, to make sure they get paid for the services rendered, and to reduce the time to work denials and file appeals for rejections for non-covered services, while providing a positive patient experience.

3. Keeping up with a high frequency of payor changes, to make sure they were submitting as many clean claims as possible, so they’d get paid promptly.

The XiFin team helped them address these challenges with the following corresponding solutions:

• Mount Carmel implemented electronic, automated communication portals to facilitate gathering and correcting data from referring physicians and patients. This created accountability to provide the correct information needed for billing and reimbursement, provided opportunities for education on limited coverage policies, and reduced write-offs.
• Mount Carmel also implemented a waiver of liability for noncovered services and began collecting payment at time of service. This improved transparency and patient satisfaction.
• Finally, Mount Carmel adopted nimble RCM technology with improved payor connectivity, automation, and visibility that helped them consistently meet their turnaround requirements.

Case Study 2: MercyOne Des Moines Outreach Laboratory

MercyOne Des Moines was using its hospital-based system for outreach laboratory RCM. It was not designed to deal with the high-volume lower value claims associated with outreach laboratory accessions. For example, the system didn’t post the reimbursement at the procedure code level and was a batch process. They were encumbered with manual processes. They recognized there was inefficiency in the process and had a desire to automate. As a lab and health system, they are continually seeking better outcomes at a lower cost.

They also lacked the visibility needed to understand what was getting paid and what was not and what the reimbursement value was compared to what they were expecting. They did not have the business intelligence capabilities needed to get reporting at the procedure level so they could understand if they were profitable. They did not know which clients were profitable or which clients were past due on their statements.

The team at MercyOne Des Moines worked with XiFin to
address these challenges. They achieved outstanding results including:

• 15% increase in cash collections
• Easier invoicing leveraging client and patient portals for billing
• Extensive process automation including sending out exception/error processing letters automatically as well as requests for additional information
• Eliminateion of rework associated with changing bill types
• Streamlined account bill changes
• Flexibility in creating rules and placing accounts on hold
• Being able to  check medical necessity requirements prior to accessioning
• Gaining the ability to  perform updates to limited and national coverage logic
• Achieved end-to-end visibility to fully understand reimbursements and profitability, so when considering bringing on a test, they can see where the strengths and weaknesses are

XiFin RCM Implementations Lessons Learned and Gap Analysis Highlights

One of the fundamental ways that XiFin helps its customers achieve these results is by deeply understanding the gaps associated with the current RCM process in terms of both technology and workflow. Based on dozens of implementations, here are some of the key findings of these gap analyses:

• Reduction of any manual or paper-driven workflow, such as prior authorization and appeals processes which are traditionally paper-intensive. These are great opportunities for the introduction of automation.
• Interfaces are critical to improve workflow and reduce manual touches. API/Web Services enable “two-way digital conversations” and replace manual file maintenance, leverage NPI instead of physician ID, and facilitate the correction of missing diagnosis codes and the use of generic SSNs.
• Patient estimation logic allows the lab to check eligibility, obtain in-network and out-of-network benefits and set a threshold by dollar amount to notify patients of potentially high out-of-pocket costs so patients can determine if they want to proceed with services.
• Labs need the ability to require documents for front-end submissions so a claim can be sent with supporting documentation to avoid back-end denials.
• The ability to perform payor address overrides and set up multiple addresses on a single payor record is valuable if the procedure code, facility, or type of correspondence (e.g., appeal vs. refund vs. claim) has
  to go to different addresses.
• Reason code overrides are also valuable to allow more than one entity/business in the same environment and to drive automated actions at the entity level.
• Analyze and automate error processing workflows and create the ability to set filters so the RCM system automatically assigns work to users based on denial type.
• Create payor-specific appeal forms and automate the appeals process.
• Reduce hardcoded values and hidden transformations in billing systems to provide visibility and control.

There’s much more detail about the gap analysis findings in the webinar, which can be accessed here.

Look for our follow-up blog post covering the final topic in this webinar—the role of artificial intelligence (AI), analytics, and automation play in RCM relate to operational and financial performance.

Additional Reading:

Download our whitepaper, Stemming the Outpatient Profit Squeeze, to find out how to identify critical gaps in your outpatient billing process and solutions you can use to improve revenue cycle management.

Read Whitepaper