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From the February 2004 Issue |
Financial Finesse By John Hummel
Sutter Health nears the finish line of an enterprise wide standardization of financial applications for 26 facilities. Integrating and standardizing financial operations is a tough job for a single facility. For Sutter Health, integrating the financial services departments of 26 licensed hospitals across 33 different campuses was a challenge of epic proportion—but a necessary one. Because each facility acted as an independent “island” of information, it became impossible to get the same data and reports in the same format from every location. Without standardized revenue collection and integrated management reporting tools, our financial performance would be adversely affected. During the past five years, we have initiated multimillion-dollar, system wide improvements, including combining our centralized business offices (CBOs), standardizing some patient accounting processes (while still allowing each facility a degree of flexibility) and standardizing on a single IT system for accounting. We are now almost at 80 percent completion of our standardization effort. By the end of 2004, we will have more than $5 billion in patient accounting flowing through our new system.
The Road to Implementation The hybrid makeup presented us with a tough decision when it came to system selection. We wanted a solution that could address lack of commonality of admissions systems and inconsistent billing practices. Our existing systems also did not allow us to efficiently verify insurance information. As a result, some hospitals in the network had accounts receivable (A/R) days in the range of 120 or more, while a few others had fewer than 60 days. We wanted to maximize best practices, streamline operational training, establish standards through a common system and find a vendor able to interface with our existing lab systems. We also expected that patient safety would continue to be a central focus for our operations, and we needed a system that would allow us to proceed with our clinical and Web process rollout and development with nearly transparent interoperability. In 1995, we formed an executive council to handle system selection. After investigating many different options in nine months, we chose MedSeries4 (MS4) from Siemens Medical Solutions, Malvern, Pa. We made this decision because MS4 met most of our requirements and was already installed at several of our facilities. When we began the rollout, Sutter Health facilities were wrestling with the desire to simultaneously achieve independence and collaboration. They understood that with standardized tools and processes came cost savings, but they would have to sacrifice some autonomy. The hospitals with “broken” systems were most anxious to convert, as were the more financially troubled facilities. But because these particular hospitals’ financial viability depended on accurate, timely information flow, there was added risk in these conversions. We did not want to get ourselves into a situation where we couldn’t cut a bill or collect receivables, since one extra day in A/R could cost the system hundreds of thousands of dollars. We developed a road map through 2006 that indicated when IT expected to have the resources and time to complete a conversion at each of the facilities. These suggested dates became part of each hospital’s strategic plan, to ensure that planning for operational, financial and risk issues would be incorporated into our five-year budget cycle. When it comes to installations, a hospital tends to look only at its own “four walls.” Many times, a single hospital will only install a patient accounting system every seven years or so. Since we knew we would be doing installations over a long period of time, we wanted to be sure the institutional knowledge and lessons learned weren’t lost when the team of installation consultants left our hospital for its next assignment. We decided to build an internal installation and support team. Judy Oliver, one of Sutter’s best billing office directors, was named to head it. Together with Siemens consultants, her team devised a template implementation plan using a “train the trainer” approach. Our internal team shadowed the Siemens installers and worked with them to conduct initial training on the system.
Challenges As a result, we are actively implementing and setting standards simultaneously. As we perform an upgrade or a system install, we also go through an examination of how the data points are set up in the database. If we need to convert the data to the new format, we can construct a “was/is” table to show the historical reports value while allowing that facility to adjust its data to have the same meaning as others on the MS4 system. This is decreasing our ongoing operating costs by reducing the number of customer codes, custom extracts and reports to provide customization only where it is truly needed. Another issue we have encountered is that MS4 is the main input system for every function, both revenue-related and clinical. Sutter has such a high level of ongoing implementation activity that MS4 resources are constantly tapped for support because of requirements for interfaces. For example, a high degree of partnering with Siemens and Sutter was required to enable MS4 to talk to the several different complex feeder systems used throughout the enterprise. Also, upgrades must be tested and applied as they become available.
Improving the Bottom Line
MS4 is now live at 16 facilities. The system’s automated collection and tracking feature enables Sutter staff to prioritize and follow up on financial counseling, third-party payer billing and collection activities through an automated collection “tickler file” system that produces daily worklists based on manager-defined A/R criteria. Staff can now track an account from the time of pre-admit through potential assignment with an outside collection agency, checking that accounts are effectively worked each 30-day period or more frequently, as needed. In addition, UB92 and 1500 claim editors are integrated with MS4, enabling claims data to be better prepared for submission. Conflicting, missing or required information errors are flagged according to the edits established by each facility and listed on an edit screen. Once errors are identified and corrected, claims are available for submission via electronic transmission to payers. MS4’s centralized business office module allows for reuse of information across the enterprise. For example, if a patient registers for treatment at two different Sutter entities, information gathered during the patient’s first visit is verified and reused for the second visit without duplicate data entry. The CBO enables Sutter to function as a true multientity billing office. Through Siemens’ electronic data interchange (EDI) eligibility transaction services, our registration staff can now automatically receive verification of patients’ insurance at the time of registration. This creates a more streamlined process for both patients and registration staff, while minimizing registration time and validating and securing payment. Other EDI services we employ include obtaining treatment authorization and pre-certification, and identifying specific insurance coverage and benefits upfront. The rollout is also helping us to establish best practices in our financial workflow. The software gives us the ability to create and extract data quickly and easily. Because the collection of data is faster, decisions are made more quickly, and we can now send bills and receive money from third-party payers more promptly. In addition, billers get real-time validation that payers have paid correctly, and it is easier to ensure that all aspects of our contracts are reimbursed.
Moving Forward By the end of 2004, the total number of Sutter entities running MS4 is expected to rise to 20. We project that all 26 hospitals will be up and running on the system within the next two to three years. Although the implementation is far from complete, and we refer to ourselves as an “integrating” delivery system rather than a fully integrated system, we are encouraged by the reductions in operating costs and A/R days we have already seen. We look forward to even greater efficiencies once our CBO is fully up and running.
For more information about MedSeries4 from Siemens,
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