Replacing Your Revenue Cycle: A Roadmap to Financial Health

Why “good enough,” is no longer good enough to keep pace with today’s healthcare environment—and what you can do to thrive today, while meeting tomorrow’s challenges.

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Executive Summary In this paper, you will learn the challenges facing organizations using yesterday’s Practice Management systems, and discover why capitalizing on the latest technology is easier—and much more rewarding—than you might think.

Contents

State of the Market:Where Most Organizations Stand on Practice and Revenue Cycle Management ..........................................3

State of Transformation: What Organizations Can Achieve by Rethinking Their Revenue Cycle...........5

RCM Replacement:Defining the Best Strategies for Success ...................................................7

RCM Replacement:Why Allscripts Technology is One of the Best Platforms for Success .............8

Why Allscripts .......................................10

PM Replacement:How Allscripts Can Help You Energize Outdated Financial Processes ............11

TOPICS INCLUDE:

• Where most healthcare organizations stand with practice and revenue cycle management

• Why an older system that seems to work “okay” can still cost a practice significant revenue

• What can be achieved with the latest practice, billing and financial management technology

• How to successfully deploy new technology while minimizing practice disruption

• Real-world results achieved by organizations that applied new thinking to old financial challenges

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State of the Market:Where Most Organizations Stand on Practice and Revenue Cycle Management

Considering that the first generation of healthcare IT systems centered primarily on billing technology, it’s interesting to note that for the past several years healthcare organizations have focused most of their attention on clinical transformations driven by national developments such as the Affordable Care Act and Meaningful Use (MU). But now that the MU “wave” is starting to subside, focus is shifting to back-end systems and processes.

According to the HIMSS Analytics 6th Annual Ambulatory PM and EHR Study: “6% of ambulatory practices are replacing their current solution and 6.7% are purchasing a new solution. 19.4% have stated that they are upgrading their current solution.” That translates to more than 1/3 of the marketplace being ready to rethink their approach to practice management.

What’s driving this trend? There are several factors pushing practices to rethink their current approach to financial and practice management including:

• Shrinking Medicare reimbursements

• Increasing operating costs

• Diminishing insurance reimbursements

• ICD-10 and other regulatory mandates

• More pressure for patient self-pay collections

• More pressure to optimize insurance collections

• More pressure to adopt value-based reimbursement

Two areas are of primary concern are self-pay collections and ICD-10. Patient out-of-pocket healthcare spending is currently growing by 5% annually, and it is expected to exponentially expand by more than 40% by 2014. The challenge is that more than 80% of providers state that it takes more than a month to collect from a patient after claim adjudication. Physician practices are simply not equipped to collect from patients as a primary focus, as their goal is patient care.

ICD-10 represents the broadest scope of any ICD revision to date. With an increase in diagnosis codes from 13,000 to 68,000, and an estimated cost of $80,000 for small practices and more than $2 million for large practices, no organization is going to be able to insulate their back-office from the impact of ICD-10. This makes an optimized process for billing and financial management more important than ever before.

19.4% UPGRADING

6.7% NEW

6% REPLACING

AMBULATORY PM & EHR INVESTMENT PLANS

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According to a recent MGMA survey, the top challenges for providers include:

• Dealing with rising operating costs

• Preparing for reimbursement models that place a greater share of financial risk on the practice

• Managing finances with the uncertainty of Medicare reimbursement rates

• Collecting from self-pay, high-deductible, and health savings account patients

• Understanding the total cost of an episode of care from the payer’s perspective

• Preparing for the transition to ICD-10 diagnosis coding

• Maintaining physician compensation levels

• Collaborating with payers to implement new payment models

• Negotiating contracts with payers

• Optimizing an existing EHR

POPULAR MISCONCEPTIONS

Among practices with older, legacy-based platform, you’ll commonly hear: “It’s not perfect, but we’re still getting paid.” Let’s examine whether or not this is a sound philosophy.

Management of the ambulatory revenue cycle has evolved significantly over the past decade. But many practices still utilize legacy systems, and over the years have added third-party tools to their legacy systems including appointment reminders, e-statements, eligibility, denial management and more.

The problem is that legacy systems are transaction-based, and bolt-on tools result in a fragmented solution, which leads to fragmented information, processes and added work. Additionally, these types of tools force a practice to maintain mulitple vendor relationships. The final product is fragile at best, and cannot offer anywhere near the financial value of today’s full-integrated, workflow-based systems.

A proper approach to practice, billing and financial management is that the functions must not be viewed in silos. Functions such as appointment management, pending claims management and unpaid claims management all should be automated and unified in one, comprehensive system. It’s this type of approach that will enable an organization to transition slowly from fee-for-service to fee-for-value over time in a controlled and efficient manner. And it will prepare groups to capture the patient payments that are expected to become 30% of a practice’s revenue stream in 2015.

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State of Transformation: What Organizations Can Achieve by Rethinking Their Revenue Cycle

If an organization transitions its back-end processes from a disjointed, transaction-based approach to a comprehensive, workflow-based system—what does that transformation look like?

Legacy-based approaches tend to look like this:

• Multiple vendors cobbled together attempting an end-to-end solution

• Manual processes, or only semi-automated processes

• No integration or partial integration, with fragmented information

• Little or no workflow automation

A fully-integrated practice management system looks like this:

PATIENT READINESS

PM

INTEGRATED CLAIMSMANAGEMENT

ANALYTICS & BENCHMARKING

PRACTICEPRODUCTIVITY

PATIENTCOLLECTIONS

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With this type of approach, a practice can:

AUTOMATE WORKFLOW AND STREAMLINE WORK PROCESSES

An organization needs a platform that supports automation and streamlining of workflows. Automating processes such as eligibility verification, self-pay collections, appointment reminders, and patient care follow up improves workflow, efficiency and staff productivity. The ability to create electronic work spaces that will allow you to operate your practice - your way – with customizable queues that mirror your preferences and your work processes.

VALIDATE, SCRUB AND EDIT CLAIMS

With a Data Rules Engine, a practice can validate patient registration data for accuracy and claim compliance, minimizing downstream re-work. By applying payer edits and rules early in the revenue cycle, clean claim rates can climb dramatically.

ANALYZE AND IMPROVE THE PRACTICE’S OVERALL FINANCIAL HEALTH

Actionable Business Intelligence for Denial Management and Practice Management identifies anomalies and refines internal processes to build a better bottom line.

With a complete, interconnected solution, appointment reminders go out and come back in one system and patient eligibility is visible directly in scheduling. Instead of waiting hours to run an unpaid claims report, those claims will be waiting in a work queue. With claims scrubbed multiple times before submission, and with claim monitoring occurring from the moment of submission, the amount of work in that queue should shrink significantly. The right system should enable an organization to use enhanced denial analytics to set rules that correct problems during patient registration or charge capture.

The right comprehensive solution will empower a team to be more productive, and not rely on one “expert” to do everything. That’s how to avoid extreme disruption to the practice if that critical employee ever leaves.

Older systems typically have a clean claims rate around 82%. Allscripts PM typically achieves a 97% first pass clean claims rate.

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RCM Replacement:Defining the Best Strategies for Success

While many organizations realize that a full replacement of outdated technology is the best way to protect and grow financial performance, many more are still fearful of the change. But with the right strategy in place, PM replacement can be a manageable, efficient and ultimately rewarding process.

The first question to consider is the current health of your organization. What is the current percentage of your A/R that is patient self-pay? If this portion equals more than 35% of the total portfolio, then your practice might benefit from an outsourced solution. The advantage is that the revenue cycle is one of the practice areas that can be compartmentalized, contained and outsourced. That means you can turn an area of potential weakness into a strength for your organization.

However, if your practice is under the 35% ceiling, then you might want to keep more functions in-house, supported by greater visibility and greater automation to enable key practice performers to focus on more strategic tasks for your organization.

When considering an investment in your PM system, ask yourself a simple question: “Will the money I’m spending directly improve the revenue cycle?” Any solution that you are considering should have the built-in flexibility to help you chart a path to the right combination of hosted and in-house improvements that will maximize reimbursements for your organization. The right technology can offer a hybrid solution, such as in-house patient registration and scheduling, with a hosted solution managing the financials. If at some point, you wish to further alleviate the administrative burden, the right solution should enable you to host your entire back office with minimum effort.

An effective technology platform should include:

• Full clearinghouse integration

º Insurance eligibility and call reminder integration

º Intuitive claims processing integration

º User-friendly electronic remittance review

• Proactive outstanding claims work queues

• Automated carrier contractual allowable discrepancy tracking

• Flexible charge entry import and real-time CCI/LCD edit scrubbing

• A robust reporting and real-time financial dashboard

Finally, while we firmly believe any technology should be completely open and able to integrate with products (such as EHR), from another vendor, the most holistic approach that maximizes financial performance will be to deploy the total package using one vendor to minimize complexity and keep everything running in sync.

PM replacement can be a manageable, efficient and ultimately rewarding process

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RCM Replacement:Why Allscripts Technology is One of the Best Platforms for Success

How does Allscripts deliver the total package for practice, billing and financial management? We provide every component an organization needs for a complete end-to-end healthy financial core, including:

• Allscripts Practice Management™—a comprehensive, rules-based engine that automates tasks, streamlines workflow and improves cash flow through features such as claims management, charge entry and collections, workflow automation, scheduling and registration/check-in, and a single-screen executive dashboard

• Allscripts Payerpath®—a leading revenue cycle management and clearinghouse services technology with more than 5,000 clients representing more than 100,000 providers, processing 600 million claims-related transactions annually—all with an average 97% first-pass clean claims rate

• Allscripts Practice Performance—a business intelligence and comparative analysis solution enabling practices to monitor, track and immediately respond to issues impacting their financial and operational performance with features such as proactive alerts, interactive executive dashboards and comparative analytics

• Allscripts Revenue Cycle Management Services—revenue cycle outsourcing combines the best of Allscripts technology, including Allscripts PM and a full suite of Payerpath solutions, along with hosting and outsourcing services. You can choose either end-to-end revenue cycle outsourcing services which eliminates the need for billing staff, or a co-sourced version which handles many functions, but retains your practice’s involvement in the revenue cycle.

What does the comprehensive suite of Allscripts technology deliver? Visibility.

• Visibility to automatically collect every penny owed for your practice

• Visibility to truly understand your practice performance, and how to make it better

Allscripts technology controls the front-end of the revenue cycle where most collection issues begin, particularly with patient self-pay.

PATIENT READINESS

Payerpath CallPayerpath Eligibility Verification

PM

INTEGRATED CLAIMSMANAGEMENT

Claims ProcessingCoding and ComplianceReports and Remittance Management277 Claim Status Notes

ANALYTICS & BENCHMARKING

Practice Performance· Reimbursement Measures· A/R Measures

PRACTICEPRODUCTIVITY

EOB CabinetPayerpath Contract Audit and Recovery

PATIENTCOLLECTIONS

Payerpath Payment AssurancePayerpath Patient Statements

Payerpath eStatements with Online Bill PayPayerpath Receipt

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With data from more than 100,000 clinicians, Allscripts provides integrated performance management combined with solid comparative analytics to understand how your organization is really performing.

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Why Allscripts Allscripts continues to touch more clinicians than any other solutions provider in the industry. More than 180,000 physicians, 45,000 practices, 2,500 hospitals and 13,000 post-acute facilities are utilizing our solutions. Allscripts portfolio includes full clinical, financial and operational solutions including FollowMyHealth®, Payerpath, RCM services, Allscripts Care Management™, dbMotion™ and HIE just to name a few.

Allscripts Payerpath handles 600 million transactions annually. With such a large portion of this in ambulatory organizations, we can address each step in the revenue cycle, from eligibility verification through patient collection, yielding cleaner claims and faster payments. In fact, the first-time pass rate for claims processed through Allscripts Payerpath is 97%, significantly better than the industry average of 90-92 % and the competition. Payerpath also enables us to deliver benchmark Key Performance Indicators that can help you identify areas for improvement and really enhance your financial outlook.

MAKING REVENUE CYCLE WORK THROUGH AN “OPEN” PHILOSOPHY

What does Open mean? It means care is coordinated across every setting: from the physician’s office to the hospital to post-acute settings and beyond. We collaborate openly with industry partners and clients because Open is not only our platform—it’s how we build better solutions. Our open strategy enables clients and vendors to customize on top of our software, which delivers improved clinical and financial outcomes. We connect clients and patients to our community network with the right information at the right time.

With our extensive community-powered network of caregivers and organizations, our unique Open architecture connects both clinical and financial data across every setting: from the provider to the hospital to post-acute settings and even the patient’s home. This Open approach provides the flexibility to work with all major EHR applications in the market today.

ALLSCRIPTS SERVICES—PARTNERING FOR SUCCESS

Revenue Cycle Management Services™ A fully-integrated revenue cycle solution for physician practices that combines technology and tiers of professional services to optimize revenue cycle and improve operational efficiencies. Built to address today’s challenges in billing and the revenue cycle, the solution is delivered in a hosted (SaaS) environment, eliminating the need for IT specialists and server hardware.

Allscripts Experiential Learning™ This scenario-based simulation learning tool is designed to enable speed-to-proficiency for staff members. Self-paced courses allow learners to practice workflows using real-world scenarios in a simulation learning environment.

Cornerstone Healthcare in Highpoint, NC, bills $1 million a day through Allscripts PM with a clean claims rate of 97-98%.

Typical monthly reports run by Mercy Hospital of Portland: RVUs, Productivity, Site production, Charges

Typical result: 20% reduction in total days-in-A/R.

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“We’ve achieved a 95% clean claims rate with Payerpath. The solution is over and above what I expected it would be.”

—Kathy Franklin, Practice Manager, Family Medical Center

PM Replacement:How Allscripts Can Help You Energize Outdated Financial Processes

Everything discussed here can be put to work for your own healthcare organization. To gain real understanding on how to apply these strategies to your unique situation, contact an Allscripts representative today at: 1-800-334-8534 or visit www.allscripts.com.

For more information, contact an Allscripts representative at 1-800-334-8534 or visit www.allscripts.com

800.334.8534

www.allscripts.com

Copyright © 2015 Allscripts Healthcare Solutions, Inc. PM16_PMSystemReplacement_WhitePaper_04-06-15