What are the “Pros & Cons” of Centralized Revenue Cycle Processing, You Ask?

Jim Matthews RCM & Healthcare Financial Management Consultant
Jim Matthews, Principal, Nearterm Corporation

Hospitals and other healthcare provider organizations that have become multi-facility entities often consider centralizing RC Processing and/or AR processing. The strategy is usually aimed at lowering operating cost, improving financial management performance and better customer service.

As a Revenue Cycle Management (RCM) consulting company, 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 article offers a just few “bite sized” observations that you might find interesting.

Homogeneous vs Heterogeneous Transaction 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 (or alike) in every state and for that matter, all over the world – these are homogeneous transaction volumes. However, when two or more hospitals having different operating systems, contracts, policies and patient types consolidate, the volumes are different – they are heterogeneous.

There are technical solutions for both types of transaction volumes, but cost, lead time and maintenance of these conduits can be material to the centralization decision. If the organization does not achieve homogeneous 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.

Benefits of Centralization

There are two critical areas where centralization of hospital revenue cycle processing offers benefits; Revenue Cycle Management (RCM) and Health Information Management (HIM) technology.

Both RCM and HIM consolidation yields budget savings that can be applied to improving compensation offerings available to build new RCM and HIM teams. You can attract stronger talent that will enable you to benefit further from their expertise across the newly centralized operation.

Impact on Internal 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).

Ask yourself:

  • 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 at patient access handled to the extent that they impact CBO performance?

Indeed, there are many more questions to resolve well ahead of the decision to centralize. Our RCM Consultants and Strategists 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.


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. Here, the key is to have consensus about expectations, timeline and accountability, as a critical piece of the decision process, and not part of the implementation process when it would threaten the success of the transition.

The above are intended as a broad overview. Nearterm Revenue Cycle Consultants and Strategists are always ready to work with you in considering the pros and cons of centralization or decentralization, and any other Revenue Cycle initiatives under consideration.

Jim Matthews
Principal, Nearterm Corporation

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Posted By: nearterm-admin

Service Management in Hospitals – Turning Complaints into Gold

Hospital Service Moment of Truth

Patient complaints can be stressful and costly, and if severe enough, can even negatively impact revenues. Or complaints can offer an opportunity to fine tune your service level and turn them into gold, thus boosting revenues. The emergence of the patient as consumer is the reason making the latter possible.

The Patient as Consumer

Hospitals and Healthcare Providers in general are in a more competitive environment than ever before. Patients are making self-directed decisions and they are well informed about their options. There are many websites, social media platforms and other sources where patients can access information ranging from clinical outcome measurements to peer experience accounts. In short, patients are behaving like consumers in a lot of other service industries.

In the healthcare industry, the patient as consumer is taking measure of such things as wait time, staff attitude, question resolution, patient friendly billing and charge explanations. Does this not sound like the criteria for evaluating the service provided by a cable company?

Historical Perspective

We have learned about consumer behavior in other industries over the years and the lessons learned can be (and are being) applied to the healthcare industry today.

For example, in the service classic “Service America” by Albrecht and Zemke, published in 1985, the authors cited research conducted by CX Solutions (at that time, called TARP Worldwide) that revealed in part the following summarized findings:

> There is Potential for Revenue Loss

  • Unhappy customers who had a problem with a service organization will tell 9-10 people and 13% of customers who had a problem will tell >20 people.
  • You will never hear from 60% of unhappy customers.
  • For every complaint received, 26 other customers have problems, 6 of which are considered “serious”

 > There is Opportunity to Turn a Complaint into Gold

  • Customers who complained and had the complaint resolved satisfactorily will tell an average of 5 people.
  • Of customers that do complain, 54-70% will do business with you again if the complaint is resolved and a staggering 95% will do business again if the complaint is resolved immediately or quickly.

Going for the Gold

Published in 1989, Jan Carlson’s book Moments of Truth is his story of how, under his leadership as president and CEO, Scandinavian Airlines System (SAS) emerged from deficits to profitability, improved services, and enhanced its market position by becoming a customer-oriented company organized for change. He found the gold!

Carlzon defined what he called The Moment of Truth, as any time the customer comes into contact with any aspect of a company (a.k.a. touch points), however remote, where he or she has an opportunity to form an impression. Moments of Truth Outcomes (MOTO) could be good or bad.

Carlson’s gold strategy was to focus on the customer:

  • Encouraging risk-taking
  • Delegating more authority to front-line employees
  • Eliminating vertical levels of hierarchy for a more horizontal organization

All the above bear the hallmarks of entrepreneurial management and the pursuit of excellence.

At that time companies put into place various efforts to make MOTOs as great an experience as possible. As one of our clients so aptly put it, the goal was to “GET YOUR MOTO WORKING!”

Happening Today – The Brand Experience

In today’s digitally connected world, MOTO touch points have exploded. Patient comments can have a huge reach and a big impact on your brand. Think social media, Facebook, Twitter, Yelp, YouTube, and many others sites where comments good or bad can go viral and into the thousands.

More than ever MOTO management has become critical to your reputation, your brand and your revenues. We believe every provider organization should embrace a patient service management process of “Moment of Truth Outcomes Audit & Strategy” (or “Brand Experience Audit & Strategy”) at every point of patient contact with your organization.

Building Positive Moments of Truth & Brand Experience

The Moment of Truth Audit & Plan – or today, the Brand Experience Audit & Plan- approach involves:

> Discovery/Research

Gather the intelligence you need to formulate a service plan

  • Consumers: Determine and define what Moments of Truth (“touch points”) exist in your business.

    Where are customer experiences being expressed, good and bad? What makes the good ones work the bad ones not work? Look to patient surveys and conduct them regularly.  Analyze them and follow the trends. Your marketing team would be very interested in assisting as it affect the overall brand and perhaps even an external unbiased resource can help. You might be surprised by where and how people form their opinions. For those who do not participate in surveys, look at Digital Moments of Truth (e.g. Hospital Facebook page, rating sites such as Yelp and Hospital Review Sites).
  • Competitors: Conduct a Strengths, Weaknesses, Opportunities & Threats (SWOT) analysis. Compare and contrast your patient service experience with those of your competitors to determine the average level of customer service. Then figure out how you can leverage your strengths to overcome theirs and be above average. Use the same online resources as you do to determine your own service level.

> Analysis & Strategy

Analyze and assess your research to build a Brand Experience Strategy and determine the specific Tactics needed for a practical implementation plan for dealing with negative Moments of Truth.

> Empowerment

The plan must contain a process that empowers employees to manage service based on positive Moment of Truth Outcomes.

 The way you handle complaints is really an opportunity to turn it around and create a Golden Moment of Delight. An over-the-top or above-and-beyond experience is really not necessary. You just have to be above average, consistent, and predictable.– ALL OF THE TIME. That’s what makes a great healthcare organization truly amazing.

As the song goes…
You’ve got to accentuate the positive
Eliminate the negative
Latch on to the affirmative

How Nearterm Can Help

 RCM Consulting: Moments of Truth discovery, research, analysis, strategy, plan development and implementation support.

 Interim Management Services: During plan implementation to fill in gaps.

  • VP Revenue Cycle
  • Director, Patient Financial Services
  • HIM Director
  • Patient Accounts Manager
  • Business Manager
  • Supervisors at all levels
  • Team Leader
  • Coding Manager

 Interim Accounts Receivable Specialists: For researching and/or resolving negative Moments of Truth with billing issues.

  • Medical Billers
  • Medical Collection Specialists
  • Medical Claims Denial Management
  • Medicare and Medicaid Follow-up
  • Commercial Follow-up
  • Self Pay
  • Credit Balance Resolution
  • Cash Applications
  • Customer Service
  • Patient Access
  • Benefit Verification

 Interim HIM/Medical Coding: For researching and/or improving coding issues to prevent billing errors.

  • Inpatient/Outpatient
  • Production Coding
  • Ambulatory Surgical Center
  • Emergency
  • Physician Practice Coding
  • Production Coding
  • Coding Manager
  • HIM Director
  • Medical Coding Auditor

Project Staffing – For handing serious Moment of Truth issues that must be corrected as quickly as possible with additional staff on short notice and on a short term basis.

  • AR Professionals
  • HIM/Medical Coding

Ask the RCM Experts


Posted By: nearterm-admin

HFMA’s 2016 ANI a Huge Success


Our thanks to each of you who stopped by to visit with us during HFMA’s most recent ANI.  The event was a huge success from the networking opportunities to the incredible educational offerings!

We would also like to offer our Congratulations to our Lucky AMEX Gift Card winners:

  • Jay Howard
  • Donald Shaw
  • Pasquelita Waseta
  • Anonymous Winner (requested what happened in Vegas stays in Vegas)

We hope your Luck continues!

Posted By: nearterm-admin