J.J. WATT QUOTE

I typically ignore the myriad of quotes and quips that saturate social media these days but this one caught my eye:


"SUCCESS ISN'T OWNED, IT'S LEASED. AND THE RENT IS DUE EVERY DAY"


Wouldn't it be great if everyone embraced this wisdom? It applies to our personal lives as well as our professional lives. So if you are a Revenue Cycle Leader, HIM Director, Hospital CFO or some other key role player, be sure to pay your rent :)


Hope you enjoyed reading this as much as I enjoyed sharing it. We at Nearterm practice it every day!


Jim Matthews
Principal; Nearterm Corporation
(281) 646-1330

Nearterm at the AHIMA 2014

Thank you to everyone who came to the Nearterm booth at the AHIMA 2014 in San Diego. You made our show a great success.

“Will We Pay These Guys More Than We Collect?”

Nearterm has an Interim Management contract serving one of our more complex multi-facility clients as Interim Revenue Cycle Director. One issue identified during initial analysis was a 7 figure backlog consisting of delinquent accounts with a reasonable probability of collection if worked properly. In this case it was determined that a lot of on-site research would be required. That determination led our client to consider the option of bringing in Interim AR Specialists (Billing and Collection Experts) to work in the business office rather than outsourcing the AR to a remote collection service.

When the Revenue Cycle Team presented this option to the CEO in the form of a recommendation, the very astute and entrepreneurial CEO asked a question that I thought was so simple it was brilliant:

“WILL WE PAY THESE GUYS MORE THAN WE COLLECT?”

I am a student of simplicity, among other things. My background in management consulting, organization development and revenue cycle strategy has required me to help hospitals transform seemingly overwhelming challenges into bite-sized action plans that are in a word “simple” enough to be actionable. So, when a client recently asked this question of one of our senior professional staff, I thought it was worth presentation.

Obviously there are a lot of surrounding considerations that would be answered before a decision could be made but if you can get to “yes” on this one, it certainly means you have mitigated the risk!

In many situations, it is advantageous to outsource to a remote service provider. We often recommend it and frequently help with vendor selection. However, in cases where extraordinary repeated interaction with case management, clinical, health information management, financial, IT and/or other disciplines is necessary at the account level, many vendors lose interest or minimize work protocols. In those cases onsite AR Specialists are a great option.

If you have experience with decisions related to this topic that would be helpful to your colleagues, please share. Nearterm is a repository for revenue cycle case study and we would welcome your input.

What are the “pros & cons” of centralized revenue cycle processing?

Provider organizations that have become multi-facility entities often consider centralizing revenue cycle and/or AR processing. The strategy is usually aimed at lower operating cost, performance improvement and better customer service. Nearterm has a lot of experience assisting clients with centralization (and decentralization) initiatives and so we could write volumes on this topic, but in lieu of that, this BLOG offers a just few “bite sized” observations that you might find interesting.

Homogeneous Volumes:
Banking, financial services, retail industries and others have been very successful with centralized billing, payroll, collection processing. If they can do it, we can do it, right? Not so fast. Every transaction processed through their clearing houses looks the same. A VISA charge transaction is the same in every state and for that matter, all over the world - homogeneous volumes. However, when two or more hospitals having different operating systems, contracts, policies and patient types consolidate, the volumes are different - heterogeneous. There are technical solutions but cost, lead time and maintenance of these conduits can be material in the centralization decision. If the organization does not achieve like volumes in the proposed processing environment, arguably, it has just combined things under the same roof, still functioning as before and with little or no gain of efficiency.

Distributed Impact:
There are two ways to capture the benefits of distributed impact through centralization of hospital revenue cycle processing; management and technology. Consolidation of organization structure usually results in a budget that improves compensation offerings available to build a new management team. This enables you to attract stronger talent and benefit from their expertise across the newly centralized operation. Likewise, surviving technology represents an opportunity.

Business Relationships & Communication:
Relationship challenges are often underestimated. We are referring to the multiple relationship and accountability changes that occur when for example a hospital moves billing and collections to a centralized business office (CBO). Who is responsible for AR performance? If the hospital is allocated CBO expense, does it have control over CBO budget? How are data collection and data entry problems that begin in access handled to the extent that they impact CBO performance? There are many questions to resolve well ahead of the decision to centralize. We recommend report design that clearly delineates accountabilities between entities and detailed policy statements about accountability. Drafting these and using them as compatibility “tests” prior to the decision may reveal crucial development opportunities that if addressed, promote a harmonious and successful transition.

Summary:
Centralization and consolidation of revenue cycle processing can be a very effective way to meet the challenges facing provider organizations in these changing times. Many have done it successfully. We also know that many “centralized” organizations would like to “decentralize” and would say they should never have done it in the first place. Generally, the key is consensus about expectations, timeline and accountability established as part of the decision process, not the implementation process.

The above are intended as broad overview. Nearterm Revenue Strategists are always ready to work with you in considering AR processing venue and any other Revenue Cycle initiatives under consideration.

What can revenue cycle professionals learn from military science?

As Revenue Cycle professionals, we are often asked to develop and present a “strategy” but we are rarely asked to address “tactics” per se. As a result, the defining line has blurred between the two. Take a moment to review the following and consider their importance and associated differences;

 

Strategy:

The science or art of military command as applied to the overall planning and conduct of large-scale combat operations.

Tactics:

The technique or science of securing the objectives designated by strategy, especially the art of deploying and directing troops, ships and aircraft in coefficient maneuvers against the enemy.

I submit that making this distinction is critical for healthcare revenue cycle and financial leaders. It is more than just semantics. The following illustrates its impact on how we approach things.

1. 
   
   Hiring:
   When asking job candidates interview questions about how they might handle certain situations or operating conditions, do you get a tactical response or a strategic answer? Perhaps if the candidate focuses mostly on tactics, you would consider them for different roles than if they provide more strategic responses.




2. 
   
   Managing Change:
   Your organization has acquired multiple facilities over the course of recent years and the question of centralized AR processing hits the table. Are you thinking about development of a strategic plan or are you speculating about how billing data will be transferred (and the multitude of other tactical challenges inherent in this initiative)? Unfortunately, businesses often “skip” strategic thinking and planning when addressing key opportunities. This often leads to the conclusion that the original idea was a bad one or that people have underperformed when the reality was simply that an absence of strategy caused a great idea to fail implementation.

So when you are considering a central business office, integration of physician billing, a computer conversion, a denial management plan, or any other initiative, develop and test a strategy before you leap into the tactical component.

We hope this and other practical experiences Nearterm has accrued over the recent 20 years will be of value to you. We have served in both strategic and tactical roles with our clients and we would welcome your call us at 281-646-1330 if you have questions.