To Improve Hospital Collections, Move Revenue Cycle Up Front

Rene Letourneau, for HealthLeaders Media , April 15, 2013

Redesigning the revenue cycle to make it a more front-end driven process is one strategy hospitals and health systems should consider when looking for ways to improve collections.

That's what MetroHealth System, a 731-bed health system based in Cleveland, set out to do when it launched its pre-service center in Q4 2012. The concept seems relatively simple: Once a patient is scheduled for an appointment, a representative in the pre-service center automatically receives the information from the scheduling department and begins the work of verifying insurance information and eligibility, requesting preauthorization approvals, and determining the patient liability.

"The pre-service center picks up where scheduling leaves off," says Craig Richmond, MetroHealth's vice president, revenue cycle. "The patient may have insurance, but that doesn't mean it will cover a particular procedure, or we might need to obtain some type of authorization. If we don't get that prior to when the patient arrives, we won't get reimbursed."

Although the idea of collecting money up front—or at least verifying insurance details to be certain the payer will ultimately reimburse for services—seems basic, it's surprisingly uncommon in the healthcare industry, where much of that work is typically done on the back end.

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MetroHealth's new approach is a "paradigm shift," Richmond says. "The objective here is about shifting more to the front end of the revenue cycle… If you get it right on the front end and secure payment on the front end, you are reducing your cost to collect, and you are reducing your bad debt exposure."

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3 comments on "To Improve Hospital Collections, Move Revenue Cycle Up Front"

stefani daniels (5/27/2013 at 12:43 PM)
The concept of front end revenue cycle activities for elective or outpatient services should also be applied to the hospital's ED. Attention to Medical necessity determinations and compliance issues is just as important. Too often patients are admitted as inpatients only to find out after the fact that they do not qualify for inpatient services. Then its all about catch-up and back end fixes. And then there are the physicians who insist upon an inpatient admission and the hospital's compliance with issuing ABN or HINN notices. And of course, the issue of inpatient vs outpatient, which if not clearly discussed with the patient from the outset, leads to patient dissatisfaction and sticker shock when they receive an unexpected bil.

Tom Kincheloe (4/19/2013 at 3:34 PM)
I own a private outpatient rehab facility that provides both OT and PT as well as lymphedema therapy. This concept of front-end servicing is not new to us; my staff have been pre-screening insurance coverage for payment type, co-pays and to ensure that each plan allows for therapy coverage. We've seen cases where a particular insurance plan would cover one therapy but not the other. We've also used this concept to screen out problem insurance payers so that we can tell patients that we do not cover or are not in network with a particular plan. This method has saved us tens of thousands of dollars in loss revenues. It's also saved many of our patients from unexpected out-of-pocket costs. It's an excellent concept and one I endorse wholeheartedly.

Joan McCarthy (4/16/2013 at 11:54 AM)
This seems like an easy process to develop but it takes good systems and knowledgable people to actually complete. Very good article. What appears so intuitive at first glance has not been the practice across the healthcare settings.




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