December 13, 2017
If you are familiar with how the healthcare revenue cycle operates, you should have heard the term “revenue integrity.” It’s become an industry axiom and many provider organizations understand the value of having a focus on revenue integrity services.
Revenue Integrity Defined
In healthcare, revenue can be defined as the reimbursement made by an insurance payer to a provider for services, supplies, and other billable charges they provide. Reimbursement is based on a myriad of dynamic coding and billing rules and regulations. Merriam-Webster dictionary defines integrity as “firm adherence to a code of especially moral or artistic values; incorruptibility; completeness.” A revenue integrity strategy encompasses the complete capture of all legal and verifiable charges while being compliant with applicable rules and regulations. It is a systemic approach that directs health organizations toward achieving operational efficiency, complete regulatory compliance, and total reimbursement.
The complexity of coding and billing requirements, along with changing rules and guidelines, leads to missed revenue collection opportunities and increased regulatory scrutiny. Effectively and compliantly capturing and billing all charges related to services is a challenge for healthcare providers, and not doing so creates a risk of lost revenue.
As healthcare costs increase and reimbursement from Medicare, Medicaid, and other major payers decreases, it is important for providers to shore up their financial position by accurately and correctly reporting and capturing all the revenue due to them.
Creating a revenue integrity program is essential to combating revenue leakage due to a myriad of issues such as: problems with the charge description master (CDM), charge capture, billing compliance, coding, and much more. The difference between the amount of revenue providers are entitled to collect and the amount of reimbursement they actually receive significantly affects a provider’s bottom line. In the current state of healthcare, providers can ill afford to leave any monies uncollected.
Six Steps to an Effective Revenue Integrity Program
Today’s unsettled healthcare environment has put pressure on providers to stabilize their bottom lines, effectively transition to value-based care, and prepare for the growth of consumerism. These changes, along with lower reimbursement rates, are forcing healthcare organizations to change the way they operate.
Healthcare consultant Vasilios Nassiopoulos, of Hayes Management Consulting, believes that forward-thinking revenue cycle leaders are reexamining the silo approach which has been traditionally followed for revenue capture. In his article, Six Steps to an Effective Revenue Integrity Program he outlined key strategies providers should take to ensure revenue integrity efforts cover the entire revenue cycle; front-end, mid-cycle and back office.
1. Set up your organizational structure
Developing a strong revenue integrity program begins with setting up the proper organizational structure. Traditional responsibilities of the revenue integrity team include monitoring and supporting gross revenue generation, along with revenue capture and reconciliation. The team must also help ensure regulatory compliance, prevent revenue loss, and conduct root cause analysis that minimizes scrutiny of your charge capture and CDM process from external entities.
You need a cohesive, focused organization to meet all these demands. A best practice structure has the senior revenue integrity leader reporting directly to the vice president of revenue cycle and having two people reporting directly to them: a director/manager of revenue auditing and a director/manager of process improvement/training.
The revenue auditing director leads a team of analysts, CDM maintenance subject matter experts (SME) and charge capture auditors. This group is responsible for ensuring the effectiveness of ongoing revenue integrity operations.
The process/improvement/training director works with process improvement specialists and trainers. This group takes the lessons learned from ongoing operations and incorporates them into reworked processes where necessary and develops a more effective training program and better communication methods to drive continuous improvement.
Establishing this type of organization may seem expensive, but consider that a mature, best practice revenue integrity department can drive between $1 million and $20 million annually in incremental net revenue improvement, while ensuring that all three revenue streams remain accurate and compliant. The investment in your revenue integrity organization will more than pay for itself.
2. Develop your project timeline
Once your organization is in place, develop a business case with a specific scope and implementation plan that will ensure long-term success and stability within the revenue cycle environment. The typical timeframe to get your program off the ground is 12 weeks.
The timeline should be broken into three phases.
- The first phase involves discovery and evaluation of your current revenue cycle state and should answer the question, “Where are we?"
- Phase two includes establishing the vision, scope and plan of your revenue integrity program and answers the question, “Where are we going?” It involves looking to the future state of your program, evaluating staffing models, setting your monitoring, auditing, analysis and training approach while determining overall requirements including policies, procedures and technology.
- Phase three moves into implementation and completion of a detailed project plan and action items as defined in phase two.
3. Decide on short and long term goals
For any program to be successful, the team must all be working toward common goals. An effective revenue integrity program includes both short- (3-4 months) and long-term (4-12 months) goals.
Short-term goals include developing your annual work blueprint based on the Office of Inspector General (OIG) plan, reviewing the revenue integrity charter, determining optimal staffing needs, reviewing and updating job descriptions and policies, developing key performance indicator (KPI) methodology and targets and initiating recruiting of revenue integrity SME’s.
Long-term goals involve personnel recruiting, training, implementing charge capture performance improvement plans, initiating audits, evaluating tools and submitting budget for enhancements, implementing scorecards for performance monitoring and aligning the program with organizational initiatives for revenue enhancements. You should also begin to develop a plan for year two of the program.
4. Document functions within your program
Next, you need to establish the functions for your organization. Traditional compliance functions include annual evaluation of the OIG plan, identifying high risk areas that may be targeted for outside audits, monitoring areas that were in previous OIG plans and auditing charge capture and coding based on clinical documentation and claim review.
On the revenue side, your team needs to monitor revenue-generating departments, quantify missed revenue opportunities and conduct denial root cause analysis with mitigation planning, CDM management, charge-related audits and underpayment analysis.
You should also implement more progressive functions that can enhance your revenue integrity program. These include designating process improvement leads, training, management reporting, establishing technology liaisons, business analysts and vendor managers, and developing a more robust denials management group.
5. Find and develop talent
The key to the success of your program will be the people who run it. That’s why it is imperative that you find and develop a team with healthcare knowledge and analytical skills.
Begin by bringing on someone with experience leading, developing and/or overseeing training programs specific to new hire orientation, technology implementation, and/or major process improvement and redesign.
The team members should be knowledgeable in all aspects of healthcare revenue cycle functions, the Centers Medicare for Medicaid Services’ state, local and federal regulations, medical records and terminology. You should also seek out professionals with the ability to assess data and processes to develop and implement performance opportunities. Look for people who can conduct and interpret qualitative and quantitative analyses and financial analysis.
It is also helpful to attract individuals who are conversant in healthcare economics and business processes, information systems, organizational development and healthcare delivery systems.
6. Establish KPI’s
The strength of any program is having the ability to measure progress toward goals and this is especially important to ensure the success of your revenue integrity program. There are several KPI’s that you can set up to monitor your program.
Standard KPI’s include revenue and usage trending, go-live performance from a revenue perspective, charge capture opportunity/quantification and late charges as a percentage of total charge. You can also use contract management/underpayment tracking, external audit summary results, and results from charge recovery summaries.
Creating an effective revenue integrity program can be challenging, but the rewards in enhanced revenue and reduced compliance risks are worth the effort. Developing and implementing a solid revenue integrity strategy is resource draining and time consuming, but if pursued diligently, it will pay for itself with a robust return on investment.