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 Hospital Information Systems

Revenue cycle streamlined

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   February 2010

Memorial Hermann is one of the largest not-for-profit healthcare systems in Texas, serving the greater Houston area through 11 acute-care hospitals, a large network of affiliated physicians, and numerous specialty programs and services. Its system-driven centralized model involves the coordination of several work processes and products, including billing, coding, pricing and contracting.

"We use a monthly operations review process, designed to identify performance variances and define preemptive actions," says Helen Powers, system executive for revenue operations, decision support and Medicare profitability for Memorial Hermann. "All business operations are reviewed on how well they achieve the health system's overarching goals of quality, operational excellence, customer satisfaction and growth. Under this model, the revenue-operations department carefully manages cash flow and days in accounts receivable."

While Memorial Hermann Healthcare System has doubled in size over the last 15 years, the revenue-operations department has managed an increased workload with the same number of personnel through the use of automation and "smart" tools. Staff uses the MedAssets chargemaster solution to regularly maintain the chargemaster for coding compliance and best-practice charging information. The team also utilizes KnowledgeSource from MedAssets for quarterly and annual code changes, pricing, best practices, national benchmarks and to gain regulatory source information for coding decisions, as well as coding intelligence and analytics.

"We find this information is invaluable to the day-to-day maintenance of the chargemaster and ultimately the reimbursement for 11 acute-care hospitals and multiple specialty facilities," Powers says.

To ensure that all gaps in potential revenue capture are addressed, Memorial Hermann implemented MedAssets' Charge Capture Audit solution. The system performs an automated review of all itemized bills to identify potential missing charges based on the services performed.

"This provides a more-accurate and complete bill to the payer," Powers says, "eliminating the need to rebill due to late charges and improving revenue capture and net revenue results. We now use the solution for all inpatient and outpatient itemized bills."

Improving pricing accuracy for supplies and enhancing overall financial results were among the goals for Memorial Hermann. Ultimately, it turned to MedAssets' CrossWalk solution, which automatically and continuously links supply information with the chargemaster to ensure charges align with costs and a defined mark-up strategy. Rolled out in three phases, phases one and two involved the linkage of more than 16,000 supply items to more than 6,000 charges.

"This is a massive undertaking, and to be successful, you must have a clear vision of what you're trying to achieve and where you want to be at the end," says Powers.

"My objective was to have a defensible chargemaster that yields the necessary net revenue for the organization," she adds. "To accomplish this, it's important to develop and consistently execute a well-defined and structured plan of action."

Memorial Hermann also looked for a way to improve its billing processes and net revenue performance, including addressing the first-pass percentage rate of claims, improving process work flow and reducing accounts-receivable days. Six months after implementation, Memorial Hermann realized a 17-percent reduction in accounts-receivable days, while its clean-claim percentage increased to 73 percent from virtually zero.

These improvements have been sustained for more than three years. The team expects to improve the accuracy of Medicare processing, accelerate Medicare cash flow and improve the audit trail and accountability for Medicare processing, according to Powers.

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Tags:  Hospital Information Systems