Crunch Time

In what seems like only a few short years, financial information systems (FIS) have evolved from simple, back-office support systems into fully integrated solutions that can handle everything from payroll to accounts receivable and revenue cycle management. But such increased functionality would not be possible without the ability to combine disparate databases into a single source of financial information that can be mined at multiple levels.

The importance of data mining quickly became apparent to corporate executives at Scripps Health in San Diego, who had been working with six separate databases before upgrading to a newer version of Sunrise Access Manager/Patient Financial Manager from Boca Raton, Fla.-based Eclipsys Corp. Scripps Health currently operates five acute care facilities totaling nearly 1,400 beds, two medical groups with 14 outpatient clinics, a home health agency and a health plan.

Drill-down Dynamics
Today, yearly revenues average $1.35 billion, which is a big turnaround from a few years ago when Scripps Health posted operating losses in 2000 and 2001 totaling approximately $26 million and $22 million, respectively.

“With ATB, I can point and click and have a data pool with which to begin analysis.”

— Keith Eggert
Orlando Regional Healthcare

In an effort to bolster their bottom line, Scripps Health devised a number of key strategies, not the least of which was drastically changing their methods of billing and reimbursement. “A couple of years ago we moved away from capitated risk to fee-for-service risk,” says David Cohn, vice president of patient financial services. Additionally, since each hospital had been running its own Eclipsys FIS, the organization made the decision to upgrade these 13-year-old systems by installing an enterprisewide FIS.

With the HIPAA deadline looming, Scripps Health had only six months to install and test the new system. In July 2003, they rolled out version 11.3, which was not only HIPAA-compliant, but was also the vendor’s “multientity” product. This enabled the organization to merge multiple databases into one central database that now resides on the mainframe. “Prior to that, each hospital was operating in its own silo,” says Cohn.

That presented problems of both access and efficiency, says Paula Pochodowicz, senior support analyst for information services. “Patient registration lives at the corporate level, but then there is an entity level.” In the single-silo version, the user had to login to one entity, then logout before logging in to another facility’s database.

While those on the enterprise level have access to information on the enterprise level, and those on the hospital level can see hospital-level information, users in the central business office who have the proper clearance can now access entity-level information via a common network—without having to go through a number of time-consuming steps.

Mollie Drake, corporate director of access management, notes that the new system also has an ad hoc report-writing feature, “but you can also run reports based on whatever level you want to drill down to.” The system also makes it possible to write alerts. Currently, Scripps Health has alerts set up only for “bad debt and bad address,” she says.

An added benefit of having a central database and drill-down capability is the ability to track and evaluate claims denials, says Cohn. “Each payer has different ways of letting us know about zero pays or denials. Now we can monitor them in a centralized way.”

Escape From Written Queries
Still, having all this data readily available doesn’t necessarily mean that all the information will be there when the user wants to analyze it. Keith Eggert, corporate director of patient financial services at Orlando Regional Healthcare (ORH) in Florida, found this to be the case. “Typically, with financial queries, we can spend 80 percent of our time trying to get our hands on all the data, and then spend 20 percent of our time analyzing it,” he says.

Comprised of seven acute care facilities serving more than 640,000 Central Florida residents per year, ORH had already invested a considerable amount of time and money in aggregating its disparate data systems by adopting best-of-breed and best-of-practice strategies, including the installation of QuadraMed Affinity and streamlining its revenue cycle processes. However, while six hospitals are wholly owned and have their data in one database, the seventh hospital is a separate corporation that has its own database, Eggert says.

This, in itself, can present a major challenge for any enterprise, but it became even more problematic for ORH when it was necessary to extract key elements of financial data from all seven hospitals for analysis. Suppose, Eggert says, “I’m looking for all managed care accounts over 90 days that were admitted through the emergency room. That’s a refined population.” Likewise, “When you get into denials of claims which have X error, you want to find out if there are other accounts with the same error.

“Typically, we would have to pool the accounts, then have queries written to identify a problem,” he continues. “Maybe those queries wouldn’t work, so we would have to have other queries written.”

It was obvious that ORH needed a solution that could pull together data from multiple sources, provide multiple levels of data mining capabilities and create a personalized suite of reports and analytics. After looking at what several vendors offered, ORH selected both the ATB Manager and ERA (Electronic Remittance Advice) Manager from Emeryville, Calif.-based MedeFinance. “With ATB, I can point and click and have a data pool with which to begin analysis,” Eggert says. He can also put that data into an Excel, Access or PDF file and send it to whomever else needs it for analysis.

Benefits of ASPs
Used mainly for accounts receivable and aged collections, ATB Manager, which is MedeFinance’s financial analytics solution, reflects all transactions made on open accounts, including payments and adjustments. When the need arises to find specific elements of data, ATB Manager’s rapid drill-down capability and its ad hoc query analysis feature act together like a high-powered search engine, making it possible to view data by any defined category such as payer, financial class or patient type.

“Each payer has different ways of letting us know about zero pays or denials. Now we can monitor them in a centralized way.”

— David Cohn
Scripps Health

Plus, the system allows the user to write specific alerts. For example, an alert can be written to flag all Medicare accounts that have been discharged but not final billed, and are more than 30 days post-discharge.

Rather than purchasing either ATB Manager or ERA Manager, ORH chose to go the ASP route, thus eliminating the need for in-house hosting and maintenance. As a result, there were no interface or integration problems, and installation was fast and easy, Eggert says. ATB Manager was up and running in less than 30 days and went live in July 2003. Training the entire management team took only a day and a half, he adds.

ERA Manager, which is the claims denials management module, was tested during the second half of 2004 and went live at the end of January 2005.

Running financial analytics software as an ASP does require ORH to transfer all data to MedeFinance. With ATB Manager, for example, that means that more than 150 separate elements of data for each account with an outstanding balance needs to be sent to MedeFinance each day. In the case of ERA Manager, copies of electronic payment files are sent. In both instances, MedeFinance uploads all data into their system for ORH. Typically, there is a day-and-a-half to a two-day lag time before that data is accessible by ORH, Eggert says.

Still, the fact that both ATB Manager and ERA Manager are Web-based means that data can be accessed from any Internet connection by those at ORH who need the information. Because there is now a common platform, data from all seven facilities, as well as ORH’s back-office financial system and other legacy systems, can be viewed as if there was a single centralized database.

Net Gains
With 15 to 20 team members simultaneously logged on to ATB Manager at any one time, ORH has realized significant gains in efficiency. The 80-20 ratio of time expended to collect and analyze data, for example, has now been reversed, says Eggert. “The most dramatic savings were in time spent obtaining useful data. We have sped up our revenue cycle and dropped several days from our days to bill. We have also achieved 100 percent cash to net revenue.”

ORH now has the ability to identify “choke points,” or slow payers, in order to proactively pursue open receivables. Also, the organization can now more rapidly identify problem accounts prior to the effect of the aging curve and its impact on bad debt expense. “We’re light-years ahead of where we were,” Eggert says.

Scripps Health realized similar gains in efficiencies, although not all were directly related to the adoption of a new software solution. Cohn admits that a significant portion of gain was due to process improvements in recovering underpayments from third-party payers. “We look at trends by types of underpayments and develop strategies to work together with our payer partners,” he says, adding that collection of underpayments in fiscal year 2003 was 9 percent above fiscal year 2002, amounting to more than $15.4 million. The auditing of more than 100,000 accounts during outpatient revenue charge-capture audits yielded more than $10 million in additional charges.

Furthermore, monthly cash collections for fiscal year 2004 exceeded those for fiscal year 2003 by $10.4 million, while net revenue between fiscal year 2001 and fiscal year 2003 increased by $44 million as a result of improvements in charge capture, coding, reduced bad debt and incremental revenue recovery. In addition, operating profitability, during that same period, improved by $40 million.

Making a Good Gain Better
A focus on reversing the losses incurred during 2000 and 2001 also led Scripps Health to establish a systemwide revenue cycle steering committee, as well as multidisciplinary revenue teams on the hospital level so that “everybody would be on the same page,” Cohn says.

Drake adds that coordinating the steering committee and hospital teams helped define how the centralized business office could best support the needs of each facility. Those weekly meetings covered a wide range of topics, she says, including financial coverage, interim billing and obstacles to discharge.

But Scripps Health went even further in overhauling its financial strategies. It developed a Scripps-dedicated claims processing team within Kaiser’s regional claims center in Pasadena, Calif., which reduced the claims backlog by $6 million. It outsourced unpaid commercial and PPO outpatient claims to QuadraMed. “We wanted our people to stay focused on higher-dollar claims,” explains Cohn.

Drake also says, “We did an awful lot of work on appeals by working with our payers and improving our contracts.”

There’s no question that upgrading to Sunrise Access Manager/Patient Financial Manager version 11.3 improved the organization’s efficiency in accessing and analyzing data. A major driver in that upgrade was the EDI transaction set requirements mandated by HIPAA, Cohn says. Also, Scripps Health needed to streamline its Medicare billing process, since Medicare accounts for about 35 percent to 40 percent of its business.

Due to time constraints resulting from the HIPAA deadline, Scripps Health was unable to install a Web-based version of the Eclipsys software, choosing instead the character-based version that could run on a UNIX platform using a cache system, says Drake. However, plans are already in the works to upgrade to version 11.4, she says.

For more information about Eclipsys’ Sunrise Access Manager/Patient Financial Manager,
www.rsleads.com/503ht-206

For more information about ATB Manager and ERA Manager from MedeFinance,
www.rsleads.com/503ht-205

Richard R. Rogoski is a free-lance writer and contributing editor to HMT. Contact him at rogoski@aol.com.