With merger and acquisitions (M&A) increasing in the healthcare field, organizations have plenty of concerns on managing these developments. One of topic of interest is that of revenue integrity during an M&A. Managing Director of Enterprise Client Solutions Matt Curtin sat down with Keith Olenik to provide insight into how organizations can maintain revenue integrity right before the pandemic. Keith brings more than 30 years of experience in the revenue cycle field, and he’s worked with a number of healthcare organizations across the country. While much has changed since the original interview aired, the insights provided by Keith are nonetheless still pertinent. Read on to see what he had to say about maintaining revenue integrity throughout a merger and how you can use this to your advantage.
Earlier this year, Definitive Healthcare released its 2019 Healthcare Trend Survey that tracked 803 mergers and acquisitions and 858 affiliation and partnership announcements and predicted the trend would accelerate. What does this mean for revenue integrity, Keith?
That’s quite a bit of activity when we look at mergers and acquisitions, and today we’re just going to talk about outpatient revenue integrity. But as you can imagine, we could talk for hours about many other issues with mergers and acquisitions starting from the top and who’s still going to be the boss, but-
We’re not going to do that to our audience.
We’re not going to go there.
But we’re going to focus on the outpatient area. One of the bigger trends we’ve started to see in the midst of all of this is acquiring physician practices. Physicians are the referral source for organizations. The only way you can treat patients is with a physician’s order. So as hospitals, health systems acquire physician offices, they have to figure out how to manage and deal with their business side of the operations. Clinically, they can integrate a little bit easier, but on the business side, the professional side, the physician office has subtle differences and nuances that the hospitals haven’t usually experienced or have a lot of experience with.
We also see the trend where providers with their frustration with things in general with healthcare, they don’t want to do the business side, they want to take care of patients, so they’re happy to give that up and their offices may not have had the best practices to begin with. So not only are you figuring out how to manage that physician’s office and their practice, you may be cleaning up a mess. So really looking at then increase in volume in the outpatient setting, aside from acquiring a physician practice, creates another set of issues.
The outpatient reimbursement process is ridiculously complex. The payers have numerous roles that you have to go through payer by payer. There is no consistency. This talk of standardization with reimbursement that HIPAA was supposed to have brought in many, many years ago has not happened. Dealing with that, in addition to the physician practice, the complexity and the increased volumes, you’ve got more work that you need to do, and you’re not necessarily always getting more people with these mergers and acquisitions.
You’re talking about organizational investments into what is the front door of a health system?
Correct.
From a revenue perspective.
Yes.
And the subsequent complexity that sits behind that door.
Yes.
And how important it is to understand what happens when you open the door.
Correct.
So there’s a lot of opportunity to not realize all the investments that you’ve made up front.
Correct. And organizations don’t do a good job with then informing those people who are going to be responsible for doing this work that today they’ve been doing it on the facility side in a hospital setting, they now have to figure out how do I bill for physician services? What can I bill for? What don’t I bill for? I’m dealing with different payers. Medicare alone, part A on the inpatient side, part B on the outpatient side, the rules are different.
You don’t necessarily even have the resources then to manage all of this. They’re not informed and educated and they’re going to have to go out and figure out what are these new resources that they need to deal with so that the revenue integrity is consistent across the organization regardless of the setting for the clinical practice. They need to make sure that they can handle that.
So with that, we also look at then the technology when we look at charge masters. A charge master is what works behind the scenes when a physician orders something. It attaches a code which is used to track and trend, but it’s also used for billing. So just making sure that your charge masters are up to date, let’s say with a merger where you have two different charge masters, because there is no consistency from organization to organization. Just matching up that simple tool, which would be a table, a database, a listing of codes, they’re not the same from organization to organization. So you’re going to have to figure out how to do those.
And then the documentation. The documentation, once again, has to support the treatment that’s done and the reimbursement that you’re going after, and the documentation inconsistencies between organizations, you’re dealing with that, with this merger and acquisition. And then you’re also looking at the inconsistencies and the differences between inpatient, outpatient, physician office. All three of those have to be figured out. So like I said, people don’t always understand all of that and they need to become educated and they may not have the staff to be able to do that.
How do organizations get control of that outpatient revenue integrity? Any other thoughts on that?
They need to first look at a claim edit process. Now, I haven’t brought up claim edits and they’re the really fun part about the billing.
Did you say fun part of billing?
Yes. The fun part about billing.
For the revenue cycle people that are listening, the finance people are really going to be excited by this. But a claim at it, to try to put it very simply, when you go ahead and bill for a service, under an insurance plan, there are certain coverage requirements, what’s covered, what’s not covered. Every payer is different. So I go to the doctor and have a blood test. You go to the doctor and have a blood test. We have two different insurances. There are different edits that have to be met. The diagnosis that covers my test is not necessarily going to cover your test depending on who the payer is.
So there’s all of these things called claim edits that are built into the software that fire or pop up on the screen. It’s not the very exciting pop up on the screen, but you see this when you go to click the button to send the claim out the door. It says, “Wait a minute, you need to answer a question, fill in a blank, add something because I’m not going to go out the door. There’s a problem with this and it’s called a claim edit.”
Setting up a very clear process on the front end to manage claim edits, make sure you have the appropriate claim edits. Do you have all the payer claim edits loaded? There’s a whole process around all of this, but making sure at the end of the day, the point is manage your claim edits and make sure you understand them. So that’s the first thing.
Just to get a sense of scale, how many plans do many healthcare delivery organizations have? And you’re talking about…
Hundreds. And depending on how big the organization is and health systems that span the country have different states. Every state, every commercial plan has variations. Medicare alone, we have all the variations with Medicare. It can be incrementally complex just multiplying those. And every one of those potentially has different edits for the same test.
And that plan landscape changes often, I would assume.
Yes.
Daily?
Every year. If you’ve gone and looked at your insurance plan from year to year, they always send you out that notice of coverage. The changes in policy, we’re no longer going to pay for this, or you have to jump through so many more hoops in order to get it covered. Every single patient… Not every patient’s going to have a different insurance. You’re going to have buckets of people that are in the same. But every person that comes in the door with a different insurance, you have to figure out how to manage that process to get paid and have those services covered, because otherwise the patient becomes responsible potentially for those services. So managing all of that, just the whole claim edit process.
Then there’s consistency in how code should be submitted for the hospital and the physician side. So when a surgeon does a procedure in a hospital, the hospital’s going to bill one part of that. The surgeon is going to bill their part for their services. So the hospital provides the operating room. The physician actually does the surgery. Trying to make this as basic as possible. When they submit the codes for what was the problem, why did you have to have that surgery done? You have a rupture meniscus in your knee, they need to do a repair on your knee. The diagnosis that the hospital submits and the diagnosis that the surgeon submits should be the same. They haven’t always been the same in the past.
So now when you merge these two together and you’re managing that in the hospital or in the health system, you want to make sure that you’re being consistent with what’s getting submitted so you don’t commit fraud, so you don’t have issues with denials. But then the question remains, why do we have two people doing the same thing? So it creates a whole new dynamic when you bring in those physician practices to the organization, and just looking at the coding process and to ensure that you’re consistent and efficient with your labor costs, because labor’s one of our biggest costs in healthcare.
On that note, are these considerations that should be captured during a due diligence phase?
They should be, but that implies the people at the top are really doing the due diligence down to the level that they need to, or even the people that are down at the level that should know, do they know because this is new to them?
They haven’t been exposed to this in the past. And sometimes you don’t know what questions to ask until it’s too late. Talking about codes then, that’s exciting, professional facility. The codes change every year. Once you figure out what the code is for whatever that knee procedure was, it could change next year. Every year the codes change. Technology allows us to automatically update those. But back in the day, people had cheat sheets. They wrote it down on a piece of paper and they would try to put that same code in year after year. That doesn’t work if the code’s changed and it’s going to get denied.
So having an annual update of the codes, you need to make sure you’re aware of that and you’re inputting those into your systems. And then medical necessity, so I touched on that a little bit earlier. Medical necessity is what allows you to get paid for that service as the provider, or you the patient to make sure you can have that service done because your medical condition, your insurance company says, “We’re going to pay for this so that you don’t have to pay out of your pocket.” But that whole process of medical necessity gets very convoluted and we’re dependent on the provider, usually the physician, providing us with adequate information at the time the service is ordered in order to make sure that medical necessity is met instead of chasing it on the back end, which oftentimes is what’s done.
And then the medical necessity isn’t met, you get a denial from the payer. It’s not covered. You didn’t provide information. Organizations with low dollar amounts, and it’s large volume on the outpatient side, they’re tempted to just write it off. It’s just easier to say that CBC, that simple lab test that you had done, you didn’t have medical necessity. We’re not going to receive payment for that. But based on what we’re going to get paid, we’re not going to worry about it. There are potential fraud issues with inducements for giving patients free care. So it’s tempting when you have large volumes that don’t get covered to write them off. You have to have that medical necessity process, and therefore you’re not going to have those write offs unless you absolutely have to.
And then, last but not least on the list of what they can do to control this area is being aware of the shift to value based payments. There are specific focuses on wellness prevention that happen on the outpatient side. You need to make sure for chronic conditions, all those things are documented appropriately by the provider, understanding what the payer rules are and then making sure the codes are signed appropriately, and you’re going to submit the claim and you’re going to get paid. But in the end, the documentation is there to support that continuity of care and for the next person that goes to take care of that patient in the outpatient setting, they’ve covered everything.
It’s hard to wrap my head around all the different elements considering a lot of these elements change. There seems to be this perpetuity of variables that healthcare organizations have to deal with you. You mentioned how the folks that are driving these operations may not have the right level of awareness to conduct their jobs the way they themselves want to conduct them.
Correct.
You covered a lot of really big picture items here. Let’s get to the point, what are the big takeaways? What are the top just few things, the low-hanging fruit, if you will, that we can think about here?
Sure. Just very succinctly, the first thing, organizations need to have a multidisciplinary team, that’s critical, covering all the bases, all the areas of expertise. Technology and workflows. Technology can be your friend. It can also really do you a lot of harm, but making sure you have the right technology and the right workflows and looking at that process.
Just accelerating those bad processes.
Yes. Doing it quicker.
Doing dumb things faster.
Yes, exactly. That’s the statement. The other thing, training and education. After you’ve done all this work, it doesn’t do you any good if nobody knows how to use it. And you have to continue to do that education. New people come in, turnover is inevitable. Training education needs to be core and ongoing.
Consider a single path coding model. That’s where you combine those people that are both assigning those same codes and doing it together. Medical necessity upfront to avoid issues with denials requires physician engagement, and that goes back to training and education for them so they know how to get that information up front.
And then communication about the denial and appeal process. It’s going to happen. You can have the best process, the best people, you’re still going to get denials. Payers have a way of going about that with their processes, but then making sure you have the wherewithal to address those and to be able to capture the money that you can or solve the problem when you continue to see patterns with that.
What didn’t we cover, Keith?
Just to reiterate those six points that I talked about, it really comes down to people, process and technology, which goes into a lot of different situations. But outpatient revenue integrity more than any others. You got to have the right people, the right number of people, and they have to be educated. The process. If your process doesn’t work, you’re not going to get anything done. And technology feeds into the process, but there’s a lot of technology options out there. Outside of what you buy from your base EHR, there’s other solutions that can add to the revenue integrity process. And as they continue to evolve, you want to continue to look at that. So people, process and technology at the end of the day are the three areas to focus on.
I’m curious about your comment regarding adding additional solutions outside of core EHR or a core system of record. A lot of the executive leaders with whom I work take a fairly ardent, let’s say, system X first posture. How will that prevent some of these point solutions that will help this process further along?
Until the EHR vendors are able to be everything to everybody, which is what they’re trying to do, and the simplification of investing with one technology versus the support issues and the cost of having multiples, when it comes to the reimbursement and the claims data, there’s huge amounts of data out there. To have the people with the expertise to mine through that data to establish the algorithms that point out when something is missing, I think EHR vendors might be able to get to that point, but there are other organizations where they’re really focused on claims data and reimbursement, and their expertise is going to provide a better solution, at least at this point until it gets incorporated into or just folded into the larger EHR as a whole.
Even in this world of application rationalization and winnowing down portfolio of applications, the juice is worth the squeeze here.
It is initially, because we’re locked looking at money left on the table if you don’t go after every dollar.
Anything else that you want to comment on regarding what we can be expecting? What’s future state or future market state look like? Any technologies you’re tracking right now?
Artificial intelligence is the one thing that’s out there that can help automate a lot of the manual tasks, which then allow people to focus on those things that the machine can’t do by itself and need to parse things together. But artificial intelligence is definitely going to be incorporated into this process. And the elimination of those manual tasks really allows people to focus where they really need to.
