June 16, 2008
What to Know Before Hiring a Revenue Cycle Firm
By Ben Tobin
Vol. 9 No. 12 P. 10
Imaging facilities are experiencing greater constriction of reimbursement due to the Deficit Reduction Act, increased government regulations, payer contract demands, and consumer-directed health plans. In addition to these weighty issues, healthcare organizations have had to meet the expenditure demand for new technology to automate systems to effectively address this constant change within the industry.
The convergence of constricted reimbursement and the outlay of dollars for technology are impacting the two most important goals of a healthcare organization’s mission: caring for the patient and securing payment for services performed. Both are reliant on and cannot exist without the other.
With the steady investment increase for systems containing more features and greater capabilities, healthcare organizations have been expecting an associated increase in reimbursement. In many cases, this has not happened because revenue cycle processes have not been examined and redesigned to work efficiently with these systems, improve customer service, and gain control of all revenue cycle processes.
It is often necessary to assess your cycle’s operations with new and independent eyes. It is difficult for an organization to internally assess its operations with an unbiased view. However, selecting the right set of eyes and determining the most important aspects to review are not that simple.
Below are 10 tips for searching for and hiring a revenue cycle firm to assist your organization in examining the many operational functions that make up the revenue cycle process. From initial patient contact with the organization through the collection of dollars for the services performed, each step has to contribute to the efficient collection of these monies.
An outside revenue cycle firm can enhance your understanding of how your organization currently functions. But it is important for the firm to outline the opportunities that exist and develop a road map that can be followed to take advantage of these opportunities. While some of these tips may seem basic, they have been developed based on years of experience and will assist with hiring the right firm for your organization, contributing to the success of your project.
1. Clearly understand and be able to delineate why there is a need for engaging an outside firm.
• Be candid in your conversations with the firm.
• Outline the issues as you have identified them.
• Explain how the issues have impacted your organization.
• Outline what you already know and what you need to know.
• Explain what payer claim denials are being received and in what volume.
2. Once you have determined there is a need, don’t delay in engaging a firm.
Reimbursement issues have most likely occurred over time and will only be exacerbated by further delays.
3. Outline your expectations of the firm—what are the deliverables? Ensure that the firm understands and agrees to these expectations. Recommend that deliverables include the following:
• assessment with recommendations;
• assessment and implementation of agreed-upon recommendations;
• project management;
• interim management; and
• performance analysis.
4. What is the firm’s history with this type of engagement?
• Does it have experience with your practice size and specialty?
• What results have been realized by the firm’s involvement with previous clients?
• What reports and status updates will you receive? Scheduled reports are necessary, but if a problem is hindering patient care, is noncompliant with federal regulations, or can be corrected to ensure an immediate input of cash, it’s vital that the firm communicate this on a timely basis.
5. Understand the firm’s fee structure. Make sure you know the following:
• hourly rates;
• expense types;
• budget limits; and
• risk sharing: If a risk-sharing arrangement is agreed on, the firm may require that all recommendations are implemented and adhered to and it is able to monitor compliance and performance.
6. Be sure you feel comfortable with the consultants.
• Review their individual experience.
• How many will be assigned and when?
• What will be the consultants’ role?
• Who will manage them internally and on site?
7. Share your current financials and revenue cycle performance reports with the firm.
• Have the information ready; the work effort by the firm will be more focused and efficient when the consultant has quality background information.
• Review and understand what information you are giving the firm and understand the sources of the reports. Have the staff responsible for gathering the information be accessible to assist in interpreting the reports available to the consultants.
8. Make sure the appropriate people in your organization are informed that a revenue cycle firm is being engaged and are given the reasons for the engagement.
• Cooperation from all sources of the revenue cycle is vital.
• Proper communication in the organization will alleviate unnecessary anxiety and enhance collaboration.
9. Be sure to examine and assess all elements of the revenue cycle and workflows. This includes the following:
• claim submission;
• edit resolution;
• accounts receivable follow-up;
• health information management;
• IT support;
• network design;
• practice management system; and
10. Your ultimate goal of hiring a revenue cycle firm is to ensure that it helps identify revenue enhancement opportunities.
• What does your organization need to do to take advantage of these opportunities?
• What are the next steps?
• Who is responsible for carrying out the plan?
• What is the project’s time frame?
Because of the dynamic nature of the revenue cycle due to the large number of interactions, processes, staff, and system needs, it is easy to lose the perspective of the cycle as a whole. It is necessary and healthy to reexamine the cycle to ensure that your organization’s people, processes, and technology properly intersect for optimal results. A quality revenue cycle firm can assist with a thorough assessment, a road map for improvement, and, more importantly, tools that can be used to control the revenue cycle and meet the industry’s continuing challenges.
— Ben Tobin is an engagement manager at the healthcare management consulting company Beacon Partners, Inc. He has more than 20 years of experience in healthcare, primarily in the areas of physician practice management and hospital accounts receivable management.