Eliminate charge disparity

Oct. 2, 2010

After Bon Secours aligned its revenue and procurement departments, items marked “non-billable” in the past were found to be billable and worth millions of dollars.

Jaimie Masson

The quest for revenue recovery has never been more critical for hospitals. In an environment where every dollar counts, hospitals simply cannot afford mistakes in the revenue cycle management department, and this means particular attention is required in the claims and coding areas. To get it right in claims and coding, organizations need to ensure that their practices and processes are correct, and that they are being correctly implemented across all areas of the organization. In short, they need standards: processes and best practices that are leveraged across the system for the benefit of the entire enterprise.

By integrating its charge capture results with its billing work flow in the claims processes, Bon Secours is able to reduce the cost of followup on missing charges, which automatically maximizes the reimbursement owed to the organization.

As a $2.9 billion not-for-profit Catholic healthcare organization, Bon Secours Health System (Bon Secours) recently discovered, however, that standardization across practices and organizations is hardly something employees (and even some executives) are immediately ready to embrace. Change is hard, and just the term “standardization” can conjure up fears of lost control, changes to long-held practices and even lost jobs. Fortunately, Bon Secours discovered that with great commitment comes great payoff. While it's been a lengthy process to implement its new enterprise patient accounting system, the health system first undertook a major corporate standardization initiative and clinical information build. In just eight months, the system saw far greater benefits than the organization ever imagined at the outset, and Bon Secours is ready to share what it has learned and some key advice with others.

Inside Bon Secours
Bon Secours owns, manages or participates in joint ventures in 18 acute-care, five long-term-care, four assisted and seven independent/senior housing facilities, primarily on the East Coast. Realizing that the health system was potentially losing revenue from a lack of processes and coordination between facilities, administrators decided to take action to eliminate disparate technologies and develop a corporate standard for supply charging. Bon Secours' ultimate goal was to standardize and leverage its pricing strategy across the health system and effectively eliminate charging disparity.

With the help of technology and an intense focus on refining processes, Bon Secours has been able to build and maintain a corporate standard around its charge description master (CDM). This has allowed the health system to streamline processes across the organization, helping to do more with fewer resources, utilize best practices in a system-wide approach, provide a support system for independent leadership styles in the multiple markets and more easily transition its patient accounting practices.

The process
Although Bon Secours has 14 owned hospitals with a wide variety of services in place, the process of implementing a standardized CDM took approximately eight months. John Whitesel, senior financial consultant at Bon Secours, credits the quick turnaround and successful implementation in large part to a strong governance structure that was put in place at the beginning of the process.

A 20-person steering committee met every two weeks to consider recommendations from three sub-committees that focused on CDM standardization, pricing and implementations, respectively. The CDM standardization sub-committee met several times a week and was instrumental in communicating with the hundreds of department heads across the organization to obtain needed approvals of new standards.

“The guiding principle around our corporate standard was to implement our vision and approach through formal policies coordinated with all stakeholders,” says Whitesel. “The committees we established provided structure and integrity around that process and opened up the lines of communication between all who were involved. The governance structure also created a sense of shared ownership around the standards, which was critical for driving support and compliance.”

With formal processes in place, Bon Secours created an overview of the standardization project and then built a work plan, which involved examining each clinical area, looking “under the hood” of each facility and comparing facilities by department to identify best practices. The system tackled charge methodology first, next turned its focus to charge structure, and then developed standards and pricing policies across the organization. Among the results, the team identified several million dollars in charges that weren't being captured previously.

Once the standard was in place, Bon Secours has continued maintaining its coding integrity through its CDM solution. Gap analysis can be completed at the hospital level for each facility, letting executives know when a coding rule is not followed. They also use their standardized CDM solution similar to a central database, always referring to the up-to-date, organization-wide coding information.

Extending the reach
Bon Secours didn't just stop with the corporate standardization initiative. The organization also leveraged this opportunity to put in place additional enterprise-wide best processes, including an enterprise billing system and integrated claims and charge capture audits solutions, for which corporate standardization had laid a strong foundation.

A key solution for helping Bon Secours capture all revenue from supply charges and maintain its corporate enterprise standards is Charge Capture Audit, a revenue optimization solution from MedAssets. CCA applies rules to pre-bill data as it reviews 100 percent of patients' itemized bills and then flags potential missed charges so errors can be corrected before bills are sent. Several years ago, after successfully implementing CCA with impressive results at one facility, Bon Secours elected to use the solution throughout its entire system, which it can now do thanks to enterprise-wide standards.

For best practice claims management, Bon Secours utilizes XClaim to automate and manage the organization's claims process. In addition to extensive claims editing capabilities, including provider and payer-specific edits, XClaim automates payer claim reconciliation to ensure claims are never lost and converts all payer reports into one standardized format.

By integrating its charge capture results with its billing work flow in the claims processes, Bon Secours is able to reduce the cost of followup on missing charges, which automatically maximizes the reimbursement owed to the organization.

As with the standardization process itself, people were a key resource in the implementation of both the CCA and the integrated CCA-Claims technology across the enterprise. Whitesel credits a strong partnership with MedAssets in helping the organization realize all of the benefits of the solution. The teams participated in regular, monthly calls to discuss opportunities for maximizing the value of CCA in every department. Best practices for both the implementation process were shared facility to facility. This standardization and open communication have been key to achieving sustainable results.

The benefits of Bon Secours' corporate standardization initiative have been significant and have more than paid for the cost of the initiative in a very brief time period.

Bon Secours' initial goal for the initiative was to capture $6 million in net revenue through charge improvements in fiscal year 2010. Six months into its fiscal year, Bon Secours has already seen charge improvements equating to $8 million to $10 million.

“Since implementation, our standards have continued to get tighter and stronger,” says Whitesel. “We're thrilled with the results so far, and we expect to see further improvements in the future.”

The benefits have extended to other areas. Once Bon Secours had a standard CDM in place, it was able to turn new information over to the clinical information systems build team, which leveraged the knowledge to build orders and implement changes. The health system also leveraged its experience from comparing and contrasting charging processes to bring best practices to many of the systems' ancillary departments.

Collect more money
For other organizations looking to establish corporate coding, charging and claims standards, John Whitesel, senior financial consultant at Bob Secours, says resources and a governance structure are important.

Limited resources can significantly impact a health system's ability to successfully manage the chargemaster file. Whitesel recommends putting supplementary staff members in place before beginning the standardization process. Ideally, these employees would take charge of the CDM and remain in that position after the standardization changes take effect.

“It's important to get any additional CDM staff on board before undertaking the standardization work itself,” says Whitesel. “It will make the process run smoothly and help the organization get through the implementation phase, which is critical for long-term results.”

In addition, it's essential to establish a consistent maintenance process for new and existing supplies by creating open lines of communication between the revenue and procurement teams. Now that Bon Secours has aligned the two departments, items marked “non-billable” in the past were found to be billable and worth millions of dollars.

“Initially, many charges that were perfectly legitimate weren't captured because employees across the system didn't know that they could charge for them,” says Whitesel. “Through consistent, open communication, we've also reduced compliance and billing risk on many supply charges.”

CDM management tips

• Build a bottom-up structure for shared ownership of standards and decisions to ensure commitment across the organization.

• Consider multiple committees to ensure that all functions are covered; it's especially important to have an implementation committee so that the hard-won standards don't just become a “book on the table,” but rather are implemented and practiced.

• Establish a written set of guiding principles at the beginning of the standardization process in order to keep perspective throughout the detailed decision-making process.

• Take advantage of the opportunity to build a team. At Bon Secours, some of the people who didn't know each other before the standardization initiative are now regularly sharing advice and best practices.

• Think big: Bon Secours took the opportunity to implement multiple projects at a time and is seeing the benefits in all areas of the system.



Jaimie Masson is vice president, client relations, MedAssets.
For more information on MedAssets solutions: www.rsleads.com/010ht-207

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