Hospital leaders are concerned that their organization’s clinical documentation and coding processes are vulnerable to errors that could result in lost or decreased revenue, according to a recent survey.
Consulting firm and technology vendor BESLER recently partnered with HIMSS Media to identify the greatest industry challenges and potential opportunities for revenue cycle improvement. They surveyed over 100 leaders within finance, revenue cycle, reimbursement, and health information management (HIM) departments at hospitals and acute-care facilities in October 2018.
The recently released survey results showed that 84 percent of respondents believe clinical documentation and coding are high or medium revenue cycle risk.
Hospital finance leaders were the most adamant that clinical documentation and coding presented significant revenue cycle challenges. Almost one-half of finance leaders chose clinical documentation and coding as their greatest revenue cycle vulnerability.
Although, the area was considered high or medium risk by over one-third of revenue cycle, reimbursement, and HIM leaders as well.
Clinical documentation and coding are creating revenue cycle vulnerabilities because solutions are not optimized for the diagnosis-related group (DRG) payment system, respondents shared. Only about one-third of hospital leaders said DRG optimization is a solved problem. In other words, the majority of hospital leaders (68 percent) do not think their solutions are equipped to manage DRG coding.
The DRG payment system has been around for over three decades. And major payers, including Medicare, use the payment system to determine lump-sum payments for hospitals that treat specific diagnoses.
While the payment system is not new, it is constantly evolving. Payers are attempting to get more specific about diagnoses to ensure hospitals are paid accurately for treating patients with certain conditions. The introduction of ICD-10 in 2015 is a prime example of how the industry has changed the DRG payment system.
But DRG changes are not ideal for providers. Hospitals find it difficult to follow and comply with constant DRG changes, and as a result, DRG coding accuracy has decreased. The report stated that the national benchmark for DRG assignment fell from 95 percent under ICD-9 to 72 percent in 2018.
Revenue cycle solutions, however, are optimized for inpatient coding and audits. Approximately 72 percent of respondents felt their technology is optimized for inpatient coding.
The survey also uncovered that respondents thought the accuracy of inpatient coding at their organizations was about the same as the industry benchmark.
Additionally, the majority of respondents (72 percent) agreed that their revenue cycle solutions are optimized for outpatient coding.
Opportunities to improve revenue cycle management technology remain. And poor coding integrity could result in the top two challenges hospitals face: claim denials (49 percent of respondents) and inaccurate reimbursements (47 percent of respondents).
Source: BESLER and HIMSS Media
However, hospitals and health systems face significant obstacles with improving their mid-revenue cycle processes, including DRG coding and documentation. Chief among the challenges is a lack of budget. Nearly one-half of hospital leaders (49 percent) said budget constraints prevented their organization from improving DRG coding and documentation.
Nearly the same percentage of leaders also felt return on investment (ROI) was an obstacle. Forty-eight percent of respondents said difficulty proving ROI from investment stopped their organization from executing DRG optimization efforts.
Other obstacles to improving the mid-revenue cycle included:
- Competing projects (45 percent)
- Lack of staff/headcount to manage improvement efforts (38 percent)
- Lack of familiarly with solutions to address challenges (34 percent)
- Existing solutions already widely entrenched or accepted (32 percent)
- Overcoming internal perceptions that there is no need for improvement (30 percent)
Respondents identified a variety of challenges, but the survey also found a potential solution for hospitals and acute-care facilities. The survey showed that nearly half of respondents (47 percent) have created a revenue integrity program, which ensures organizations are being fully compliant with coding and billing practices while also achieving operational efficiency and legitimate reimbursement.
That means about 53 percent of hospitals still haven’t implemented a revenue integrity program.
About three-quarters of hospitals with revenue integrity programs reported improvements in net collections, increases in gross revenue capture, and/or reduction in compliance risk.
As of Jan. 1, in the name of transparency, the Trump administration required that all hospitals post their list prices online. But what is popping up on medical center websites is a dog’s breakfast of medical codes, abbreviations and dollar signs — in little discernible order — that may initially serve to confuse more than illuminate.
Anyone who has ever tried to find out in advance how much a hospital test, procedure or stay will cost knows the frustration: “Nope, can’t tell you” or “It depends” are common replies from insurers and medical centers.
While more information is always welcome, the new data will fall short of providing most consumers with usable insight.
That’s because the price lists displayed this week, called chargemasters, are massive compendiums of the prices set by each hospital for every service or drug a patient might encounter. To figure out what, for example, a trip to the emergency room might cost, a patient would have to locate and piece together the price for each component of their visit — the particular blood tests, the particular medicines dispensed, the facility fee and the physician’s charge, and more.
“I don’t think it’s very helpful,” said Gerard Anderson, director of the Johns Hopkins Center for Hospital Finance and Management. “There are about 30,000 different items on a chargemaster file. As a patient, you don’t know which ones you will use.”
And there’s this: Other than the uninsured and people who are out-of-network, few actually pay full charges.
The requirement to post charges online in a machine-readable format, such as a Microsoft Excel file, came in a 2018 guidance from the Trump administration that builds on rules in the Affordable Care Act. Hospitals have some leeway in deciding how to present the information — and currently there is no penalty for failing to post.
“This is a small step” toward price transparency amid other ongoing efforts, Centers for Medicare & Medicaid Services Administrator Seema Verma said in a speech in July.
But finding the chargemaster information on a hospital’s website takes diligence. Patients can try typing the hospital’s name into a search engine, along with the keywords “billing” or “chargemaster.” That might produce a link.
Even when consumers do locate the lists, they might be stymied by seemingly incomprehensible abbreviations.
The University of California San Francisco Medical Center’s chargemaster, for example, includes a $378 charge for “Arthrocentesis Aspir&/Inj Small Jt/Bursa w/o Us,” which is basically draining fluid from the knee.
At Sentara in Hampton Roads, Va., there’s a $307 charge for something described as a LAY CLOS HND/FT=<2.5CM. What? Turns out that is the charge for a small suture in surgery.
Which services, treatments, drugs or procedures a patient will face in a hospital stay is often unknowable. And the charge listed is just one component of a total bill. Put simply, an MRI scan of the abdomen has related costs, such as the charge for the radiologist who reads the exam.
Even something as seemingly straightforward as an uncomplicated childbirth can’t easily be calculated by looking at the list.
Comparisons between hospitals for the same care can also be difficult.
An uncomplicated vaginal delivery charge at the Cleveland Clinic’s main campus is $3,466.
Looking for that same information on the Minnesota Mayo Clinic’s online chargemaster page shows two listings, one for $3,030, described as “labor and delivery level 1 short” and the other for $5,236, described as “labor and delivery level 2 long.” But, what’s a short labor? What’s a long one? How is a patient who didn’t go to med school supposed to know the difference?
Also, those are just the charges for the actual delivery. There are also per-day room charges for mom and the newborn, not to mention additional charges for medications, physicians and other treatments.
To get at the total estimated charge, California requires hospitals to report charges for a select number of such “bundles” of care, called “diagnosis-related groups,” or DRGs, in Medicare jargon.
At the University of California-San Francisco’s hospital, for example, there are two chargemaster line items for vaginal childbirth: One is $5,497 and the other is $12,632. But there’s no indication how these differ. Consumers might then turn to the “bundled” cost based on those DRGs, where the ancillary costs are included. That lists the total charge for an uncomplicated childbirth at an astounding $53,184.
A UCSF spokeswoman said no officials were available to comment on this figure.
Though chargemaster rates are quite different from the lower, negotiated rates that insurers pay, they do become the basis for what patients pay who are without insurance or who are treated at hospitals outside their insurer’s network. Out-of-network patients are often surprised when they get what are called “balance bills” for the difference between what their insurer pays toward their care and those full charges.
Still, even knowing chargemaster rates “would be entirely unhelpful” in fighting a high balance bill, said Barak Richman, a law professor at Duke University who has written extensively about balance bills and hospital charges.
“Chargemasters are enormous spreadsheets with incredibly complicated codes that no one short of a billing expert would be able to make sense of,” he said.
Nevertheless, some experts say that merely making the charges public shines a light on the often very high — and widely varying — prices set by facilities.
Even if those charges are only “what hospitals would like to receive,” posting them publicly could make hospitals “totally embarrassed by the prices,” said Anderson at Hopkins.
Billing expert George Nation, a finance professor at Lehigh University, said that rather than posting chargemaster lists, hospitals should be required to provide the average prices they accept from insurers. Hospitals generally would oppose that, saying negotiated rates are a trade secret.
It’s unclear that the lists will have much impact. “It’s been the norm here in California for over a decade,” said Jan Emerson-Shea, vice president of external affairs for the California Hospital Association. Even so, “from a practical standpoint, I’m not sure how useful this information is,” she said. “What an individual pays to [the] hospital is going to be based on what their insurer covers.”
That could include such things as the annual deductible, whether the facility or physicians involved in the care are in-network and other details.
“The hospital piece is just a small piece,” said Ariel Levin, senior associate director for state issues at the American Hospital Association.
Still, “the biggest concern is it falls short of that end goal because it really doesn’t help consumers understand what they are going to be liable for,” she said.
What happens when record increases in health insurance premiums and deductibles put too much stress on patients’ pocketbooks? They delay needed care out of fear they’ll be unable to shoulder an unexpected medical expense for themselves or their families.
Now more than ever, patients worry about their ability to cover out-of-pocket healthcare costs, a recent Commonwealth Fund survey shows. The percentage of patients who believe they could afford the care they need is falling, and many say satisfying their financial obligations for care has become more difficult.
But these data only tell part of the story. Our own research shows that while 68% of patients want to discuss financing options that could ease their minds about mounting healthcare expenses, providers are falling short—and families, especially, are feeling the pinch.
According to our survey, 27% of households with children are likely to delay care because they can’t afford to pay for it. Families are also less likely to pay their out-of-pocket costs for care in full—and their chances of having their account sent to collections are twice as high.
It’s not that families and individuals don’t want to cover their out-of-pocket costs. In fact, half of the patients surveyed were willing to select providers based on the availability of financing plans that stretch out their obligation into more manageable monthly payments. The trouble is, providers have been slow to adopt flexible payment plans. They are even slower to discuss financing options with patients or publicize them more broadly.
It’s time for a new approach to patient billing—one that takes into account patients’ desire to fulfill their financial obligations for care, addresses their concerns from the point of service, and demonstrates a willingness to meet them where they are.
The experience of one new mother in Florida illustrates the gains hospitals can make when they take a compassionate approach to patient collections. As she prepared to give birth to her daughter, she found herself facing a financial dilemma. The hospital required her to “reserve” her spot in its labor and delivery unit—for a $1,000 deposit. With no money in reserve and a baby on the way, she feared she wouldn’t be able to deliver her baby at the hospital.
She asked hospital representatives whether the hospital might consider a payment plan instead of a lump-sum payment. To her relief, the hospital allowed her to extend the payment over 12 months—interest-free. It’s an option that relieved the stress of the financial burden of care during what should be a joyous time for her family.
Offsetting the impact of out-of-pocket medical costs for individuals and families doesn’t require an overhaul of a hospital’s patient financial services program. Instead, hospitals can take simple steps to help patients more easily fulfill their financial obligations for care—and reduce their costs to collect as well as bad debt in the process.
Consider offering a variety of options for payment, such as low-interest and no-interest loans that all patients qualify for, without the fear of credit reporting or negative consequences. Setting the program up so that patients have a choice and opt into the program significantly helps the patient experience. Discuss their estimated out-of-pocket expense with patients before or at the point of care, and share information on payment plans widely, both onsite and online. Lastly, a program that is consumer friendly with easy ways to pay their bills and manage their accounts will go a long way to increase patient satisfaction.
Taking a more proactive approach to affordability is not only the right thing to do for patients but also the smart choice in protecting an organization’s long-term financial health.
It’s no secret that many physicians are unhappy with their electronic health records (EHRs). They say they spend too much time keying in data and too little making eye contact with patients. They say their electronic records are clunky, poorly designed, hard to navigate, and cluttered with useless detail that colleagues have cut and pasted to meet documentation requirements. Meanwhile, the data they really need are buried almost beyond retrieval.
Not all physicians feel this way. Two-thirds of primary care physicians say there are satisfied with their current EHRs, according to a 2018 survey by The Harris Poll. But the critics have a point. Current EHRs are not well-designed to meet the needs of users. And they don’t do enough to make clinicians smarter and more efficient. This doesn’t mean we would be better off in the paper world of 10 years ago. But it does mean that EHRs need improvement.
As we think about improving them, we need to broaden the discussion of EHRs and their role. We need to reckon with the underlying causes of EHRs’ problems, how to correct them, and how to ensure that their enormous potential benefits are understood and realized.
EHRs are a technology. Like most technologies, they can be used in a variety of ways for a variety of purposes. Their human masters decide.
In our current health system, EHRs have one critical performance requirement: generating clinical revenues. In the fee-for-service world, this means supporting providers’ billing and documentation to generate as much revenue as possible for each clinical service. EHRs also must help providers meet regulatory requirements that may have financial or accreditation implications.
This means that current EHRs were not created to support many of the things that physicians, patients, and policymakers value: better care experiences, reduced costs, or improved care quality and population health management. They were not created to make physicians better diagnosticians or more cost-effective prescribers. The reason: our health care system has mostly not rewarded these activities. They have not been mission-critical for providers or, therefore, EHR designers.
For that reason, EHRs have only the most minimal capabilities related to clinical decision support, which has been proven to increase the quality of care, or to the collection of information on duplicate and unnecessary testing, or on the aggregate health of providers’ patient populations.
To put it simply, improving EHRs will require changing the priorities governing their design. That means moving away from fee-for-service payment toward risk-sharing by providers and, ultimately, some form of prospective compensation. Until then, optimizing the usability and value of EHRs will be an uphill struggle.
Because the benefits of EHRs may be less visible than their burdens, some of their contributions are overlooked and undervalued.
One of these benefits is giving patients access to their medical information. Meaningful-use requirements spurred the adoption of patient portals, which, though sometimes clunky, have enabled patients for the first time to routinely see their test and procedure results. Patients can also now download their entire digital record and share it with third parties that can analyze its contents and educate them on their significance. Apple, for example, has agreements with over 100 health systems and practices to perform this function, which is likely to spawn a deluge of consumer-friendly health care applications based on patients’ own information.
Another underrated EHR benefit is that, by capturing billions of patient encounters worldwide, electronic records are generating a vast store of digital health data that are available for novel uses, including research into the causes and cures of disease and the detection and prevention of threats to public health.
Think of these data as the equivalent of a new natural resource, like water or minerals; they sit in the cloud, ready for extraction, refinement, and application. Their value is increasingly understood by technology companies, new startups as well as old stalwarts, that are pouring billions into exploiting them. There are obvious privacy and security issues raised by this development. But never before in human history have we had access to this novel (un)natural resource.
In entering all that data at the point of clinical care, health professionals and patients are creating a public good. But they get little tangible in return — at least in the short run. This maldistribution of benefit and cost lies at the heart of the current EHR controversy.
To make health professionals’ work easier, and to exploit the vast potential of EHRs, a number of interventions make sense.
The most important is unrelated to the technology. Clinicians unhappy with EHRs have a huge stake in moving from fee-for-service to value-based payment, so that providers and their EHR vendors start to prioritize the production of health and the reduction of waste in health systems. This will reduce documentation requirements, spur the creation of decision support and information exchange that make clinicians’ lives better, and focus attention on getting value from the information so laboriously recorded by doctors and other health professionals.
A second requirement will be to lower the burden of data entry. Many providers have started using scribes to take notes during visits. While many physicians love scribes, they are expensive. A better long-term solution would be to use natural language processing and artificial intelligence to enable clinicians’ conversations with patients and their subsequent assessment and treatment plan to be recorded in real time. Given the increasing power of these technologies, such applications will soon be available.
Another approach to assisting data entry is to systematically redesign records for ease of use and to prune away unnecessary recording requirements. A recent New England Journal of Medicine commentary provided an excellent example of the benefits of this intervention.
A third requirement for EHR improvement falls to health professionals. When I was a medical student, I spent hundreds of hours learning how to take notes in the paper world. More experienced clinicians reviewed and graded these write-ups. Later, as a young physician, I observed the notes of clinicians I admired, and emulated them. This process of professional education in record-keeping unfolded over years and forever shaped my note-writing habits. If physicians are unhappy with how their colleagues use EHRs, they should start educating young physicians — and their peers — on how to properly keep records in the electronic world. What and how data get recorded are ultimately a professional responsibility.
Lastly, we need to find a way to correct the maldistribution of costs and benefits that now plagues the use of EHRs. By creating vast troves of electronic data and enabling patient empowerment, clinicians and their patients perform a valuable public service that has thus far been unrecognized and unrewarded. Reducing the cost of data entry will help, but as the benefits of EHRs and their data become monetized — as they will — some way to share those gains with clinicians and patients at the frontlines should be considered. This could be accomplished in a variety of ways such as voluntary contributions from businesses that rely on EHR data to an EHR innovation fund and/or directing a share of the taxes paid by these businesses to EHR improvement. But at least until EHRs become much more user friendly, this problem of unfair allocation of benefit and cost needs attention.
We are not going back to the paper world, but EHRs need to work better. As they pursue this goal, clinicians, policymakers, managers, and vendors need to understand and address the root causes of the problem they are trying to solve, and the full array of options for addressing it.
CMS published an additional FAQ document that provides guidance for hospitals required to post their standard charges online.
In August, CMS finalized a rule requiring hospitals to publish a list of their standard charges online in a machine-readable format and to update this information at least annually. Over the past few months, CMS has attempted to answer questions about the new requirement before it kicks in Jan. 1.
CMS posted a document in September that provided the definition of “machine readable” and answered five other frequently asked questions about the price transparency rule.
CMS recently published an additional document that expanded on the rule. The agency answered seven questions about the new requirement, including one about whether hospitals are required to post information online that isn’t included in their chargemasters. CMS clarified that even if a hospital’s chargemaster does not include standard charges for drugs, biologicals, or other items and services it provides, those charges must be posted online.
Approximately one-quarter of US hospitals (26 percent) do not have an effective healthcare revenue cycle management solution in place, according to a new Black Book survey.
Black Book surveyed over 4,640 individuals from 522 hospitals and healthcare delivery networks on their use of 165 revenue cycle management technology services and solutions. The survey showed that revenue cycle management improvement is happening, but a significant portion of hospitals still do not have workable solutions.
While 26 percent of hospitals do not have a plan to optimize or replace legacy revenue cycle management systems, the proportion of hospitals without a transition plan is down compared to six years ago. In 2012, 35 percent of all hospitals did not have a revenue cycle management strategy in place to improve or replace their solutions.
The most recent survey results show that about 400 hospitals implemented a viable, effective revenue cycle management optimization or replacement plans over the past six years.
However, the opportunity to improve healthcare revenue cycle management remains. Of the 1,600 hospitals without a revenue cycle management optimization plan, about 82 percent expect to make value-based reimbursement decisions in 2019 without the use of an advanced software or outsourced partner, the survey showed.
Value-based reimbursement is overtaking the traditional fee-for-service system. The proportion of healthcare payments tied to an alternative payment model is rising, reaching 29 percent of healthcare payments by 2016, the Health Care Payment Learning and Action Network (LAN) recently reported.
The number of payments linked to value-based reimbursement is only going to increase as private and public payers implement alternative payment models to lower costs and improve care quality. And hospitals will be expected to take on the clinical and financial risks associated with the models.
Effective revenue cycle management solutions can help hospitals make the transition to value-based reimbursement.
“What providers absolutely must have are really powerful analytics that are able to take clinical and outcomes data, a lot of which resides in clinical systems, and combine it with financial data to accurately measure where we improve quality based on outcomes results,” Deanna Kasim, Research Director of Payer Health IT at IDC Health Insights, told RevCycleIntelligence.com.
“There is an absolute need that if this is going to be successful in terms of changing reimbursements and care delivery models, payers need to get providers and the consumers to the table and there has to be the next generation of analytics applications to support these efforts.”
Without a viable, effective revenue cycle management solution, hospitals could lose revenue during the transition to value-based reimbursement.
In light of the challenge, 85 percent of Black Book respondents said they would partner with a revenue cycle management consultant or advisory company for short-term direction.
For the long-term, however, hospitals will need to partner with a third-party vendor to implement an optimized revenue cycle management solution that can deliver value-based reimbursement results.
Black Book explained that hospitals can invest in core, platform, and/or point solutions, which cover enterprise-wide functions. Or hospitals can implement bolt-on solutions that automate specific components of the healthcare revenue cycle.
At this stage in the market, hospitals are currently turning to bolt-on solutions to complement their legacy financial and clinical systems. About 45 percent of large and community hospitals in a recent Black Book survey plan to use multiple bolt-on solutions for revenue cycle management in 2019.
Few hospitals expect to use one core legacy vendor for a software solution. Only 23 percent of small hospital staff, 15 percent of community hospital staff, and 17 percent of large hospital staff stated that relying on a core solution was their organization’s revenue cycle management strategy for 2019.
Hospitals are investing in more bolt-on solutions versus core software because of staffing concerns, Black Book reported in the most recent survey. The five-month polling process revealed that staffing concerns were the top challenge hospitals faced with implementing new revenue cycle management solutions or improving legacy software.
Finding skilled revenue cycle management human resources for new solutions was a major obstacle to optimizing or replacing legacy systems. Therefore, outsourcing core functions or implementing bolt-on services was a short-term alternative, hospitals leaders said.
“If hospitals are to maximize revenue and reduce claims take-backs, it is imperative that those still behind the curve find a way to dedicate appropriate resources toward implementing an effective RCM system,” the market research firm concluded.