Category Archives: Thoughts & Musings

Nearterm shares its thoughts & musings on subjects universally applicable to hospitals, physicians, and other healthcare organizations.

Revenue Cycle Processing Backlogs Are Not “NORMAL”. It’s time to raise the bar – eliminate BACKLOG TOLERANCE!

I talk every week with Revenue Cycle Leaders from all types of hospitals around the country. When I ask how things are going, there are many common responses that reflect current concerns and challenges they are facing. These include conversion issues, staffing constraints, volume fluctuation, talent acquisition/retention, cooperation among stakeholders, change in payor practices and training, just to name a few. Here are some recent quotes that typify their remarks:

“We are preparing for a conversion. The training and build distractions have resulted in backlogs and performance decline. After the new system is implemented, there will be a learning curve and modifications to make for the new system to do what it is purported to do.”

“Budget constraints require me to do more with less every year. This year, we are struggling to keep up with processing volumes, especially billing and follow-up. We are getting behind. Our aging looks awful.”

“Our Revenue Cycle Team is great but it seems like every day we learn of new HIPAA and other rules imposed on us that require change, training and personnel shifts. For example, we have about 12 days of DNFB and can’t seem to get a handle on it. Chart assembly and completion are also behind. If we can’t get it coded on time, we can’t bill and collect on time. But it’s been that way for some time now so nothing new.”

“Denials are killing us! We have done some analysis to determine root causes and we have a feel for that but we just don’t have the resources to address those causes. We devote our existing FTE’s to working current volumes but the denial backlog is growing and it is a real problem for us. Not only are we not getting paid by insurance and Medicare, but patients complain, citing that we are to blame so until the denials are resolved, they are reluctant to pay patient liabilities like deductibles and coinsurance.”

“We are doing OK. We have backlogs in various areas but we know that we are in a community with a limited talent/labor pool so we are always working hard to balance make or buy decisions. Our days, DNFB and denials are higher than facilities in other communities but we just don’t have the technology or budget to compete with their benchmarks.”

Identify and Eliminate BACKLOG TOLERANCE

You get the picture. We have developed what I call BACKLOG TOLERANCE. We know backlogs exist and can usually identify why, but we just can’t seem to address the root causes effectively. Furthermore, we can’t eliminate the backlogs and sustain current processing designed to prevent recurrence. Instead, we often change the standard.

eliminate backlog

This condition would not be acceptable in other industries and in my opinion; it should not be tolerated in ours. Sure, every business experiences episodic conditions that result in temporary backlogs from time to time – understandable. But when they do, they scramble immediately to meet the problem head-on and take definitive steps to resolve the issue. They implement the technology, invest the human capital and embrace preventive design aimed at making sure the backlog was in fact temporary, and not a permanent “NEW NORMAL.”

Of course, many hospitals have been very progressive and certainly are not tolerant of backlogs. They proactively anticipate influences that might result in processing challenges and they reinvent their organizations well ahead of impact. I always learn from them and have great admiration for their approach, vigilance, creativity and the leadership they have in place that enables their success.

If you can relate to my comments, I would love to hear from you. If you are in a hospital with some degree of BACKLOG TOLERANCE, I would welcome an opportunity to talk with you about solutions you are working on that might help others. If you have “recovered” from “BACKLOG TOLERANCE DISORDER” (Is there a code for that?), please share your plight – I am sure your colleagues would appreciate hearing ideas that might be helpful to them.

Posted By: nearterm-admin

Revenue Cycle Management In 1951: It Used to be a Lot Easier…Or Was It?

Revenue Cycle Management In 1951

The above image is an actual hospital bill and accompanying explanation of charges used in 1951. Just think of the things that we didn’t have to manage back then. A short list might include coding, claim edits, massive denials, contract payment compliance, Medicare/Medicaid (both started in 1965), managed care contracts, HIPPA regulations, “patient-friendly” billing initiatives, use of technology, and outsource considerations.

We now embrace in stride all of the complexities that have evolved since this bill was produced. In fact, increasing complexity is the “new normal” in our business. The explanation of charges that accompanied this bill was actually pretty transparent for the time and was largely designed to help patients understand the difference between hospital and hotel costs. It was easy to understand the bill and the explanation. However, the expressed complexities that have emerged today make itemized bills almost unintelligible and our explanations often lead to more skepticism than acceptance. It’s not easy anymore!

In our company and in your hospital, we are attuned to customer service management and its importance in the revenue cycle continuum. Among revenue cycle and financial professionals, part of our jobs back in 1951 and presently today has always included the mantra “cash is king.” But today, more than ever, patients are decision makers. I can remember a time early in my career when my boss imparted to me that our “internal client” or “customer” was the physician because it was the physician who drove patients and therefore revenue to our facility. Now we have several customers, which is yet another added complexity.

However, in the shadow of all the differences one can enumerate between 1951 and today, there is one glaring similarity. Healthcare revenue cycle management success is still about blocking and tackling. It still means the presence of a compassionate patient access process that results in a positive patient experience, while simultaneously recording data that enables us to populate a clean claim and collect revenue. It still means timely, accurate revenue capture and billing. It still means effective follow-up on billed AR and prompt recognition of collectability. Like you, our consultants, interim leaders, and staff augmentation specialists at Nearterm realize the importance of keeping our eyes on the prize – CASH IS STILL KING.

Oh well, maybe things haven’t changed after all! 😊

Jim Matthews
Principal, Nearterm Corporation

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Posted By: nearterm-admin

The Characteristics of Leaders and Successful People

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

I don’t know about you but I am growing immune to the voluminous “LISTS” I see in social media about leadership and success. LinkedIn, social media forums such as Facebook, and blogs are recently inundated with posts about leaders, leadership and successful people. For example, just this year alone 167 Habits, 340 Behaviors, 62 Graphic Musings, 35 Qualities, 53 Differences and 111 Characteristics have shown up on my monitor.

The above estimate is based on sampling of posts since January 1, 2017 and suggests that 768 pieces of sage advice have been shared so far this year. Much of this content is repetitive or duplicative but the actual posts are not. Each one is unique.

Here is the point: have you ever tried to function based on 768 pieces of advice? It would be overwhelming. The best personal example I can offer comes from a golf pro giving me a much-needed lesson one afternoon.  He watched me swing the club a few times and I then asked him to tell me everything I needed to do differently. Instead of giving me 768 pieces of advice (my swing was so bad, I could have used more), he said this;

“All I want to do is tell you one habit you should lose each time we get together. It’s the Pareto Principal. That is, 80% of effects come from 20% of causes. If I can help you lose only a few bad habits, your game will improve dramatically. Besides, if I told you everything I see that might improve your swing, it would take up our entire hour and you would get worse trying to remember it all. Practice losing the bad habit I point out today and when you have buried that one, call me for another lesson.”

I advocate one piece of advice or wisdom. Be honest with yourself as you identify your worst habit or behavior and bury it forever. This might require a combination of introspection and perhaps feedback from colleagues, family, and others that you trust to be honest with you. Then repeat this exercise for the rest of your life.

This may not make you a leader because at the end of the day, leadership is more of a talent than a skill, but it might make you more successful at what you do.

Jim Matthews
Principal, Nearterm Corporation

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Posted By: nearterm-admin

How Many Revenue Cycle FTES Do You Need?

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

Revenue cycle staffing patterns and ratios are all over the map among provider organizations. This makes sense when you consider that there are variables like technology, volume, patient type, payor mix, skillset, organization structure, mission and management practices. Hospitals often rely on benchmarks in conjunction with staffing decisions. Benchmarks do very little to recognize these variables in a useful way so they are generally not a universally reliable gauge for staffing decisions. However, there are some cases where all of these variables are homogeneous therefore lending credibility to the use of benchmarks for comparative analysis.

A more scientific approach that is globally applicable requires decision making based on the relationship of labor allocation to work arrival. This approach requires (a) full understanding of volumes in terms of type, arrival timing, processing requirements by type etc. and (b) realistic understanding of labor capability and availability at given times. The goal is to match labor allocation as precisely as possible to work arrival so that volumes are processed in a timely manner and productivity is maximized. The following is a hypothetical illustration of how this concept might be applied in various functional areas around the revenue cycle although the concept is applicable in almost every area.

Billing:

Patient accounting offices usually operate based on a five day work week.  Labor allocation in billing is the same each of the five days of the week (e.g. 8 to 5 Monday through Friday). However, the hospital is a 24/7 business and there is patient volume every day. When the billing team arrives on Monday, they have 3 days billing volume in their queue. If they can complete 3 days of volume on Monday, productivity is “x”. When they arrive to work Tuesday through Friday, they have only 1 day of volume each day so productivity is “X-2 days volume” and remains at that level through Friday. How is the change in productivity reconciled? Another scenario is that if they do not complete the 3 days volume on Monday, the hospital has a backlog until later in the week, assuming they caught up by the time they leave Friday at 5:00.

Idea

Flex staffing pattern to allocate labor to work arrival time:

  1. More hours are scheduled for Mondays, tapering down throughout the week based on work arrival
  2. Schedule weekend labor allocation in billing so that labor allocation better matches work arrival

Practical Guidance

The above is an illustration based on assumptions about volume and staffing patterns. It is intended for conceptual design that can be implemented using an engineering approach. Every hospital has to adapt this design in a way that recognizes their operating environment. It requires comprehensive understanding of volumes. However, we have applied this principal of “labor allocation to work arrival” in many hospitals successfully. It works in patient access, billing, follow-up, and most volume driven areas.

Jim Matthews
Principal, Nearterm Corporation

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Posted By: nearterm-admin
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