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Accountable Care Organizations

RCM a critical component of accountability models

Revenue cycle management holds the key to successful fi nancial contracting in the world of accountability reform.

By Seema Mathur and Kim Lorusso “P

rofitability” is a dirty word in health- care, but let’s face it – financial success enables healthcare providers to invest profits to provide better quality of care and support accountable models now and in the future. Revenue cycle is a critical component of ac- countability models and should not be an afterthought after selecting a clinical system. Now is the time to ensure you have the proper infrastructure in place to support accountability models that will require new reimbursement capabilities that incorporate different approaches to risk, such as episodic bundling. Much has been written about accountable care, but it can be hard to keep up with all the change that

What many provider organizations will realize as they dive deeper into the complex reimbursement strategies necessitated by ACOs is that revenue cycle demands will increase while fee-for-service revenues decrease.

healthcare reform is bringing to both the clinical and financial sides of healthcare. It is clear that many provider organizations are planning, prioritizing and juggling multiple IT projects, including 5010, ICD-10 and meaningful-use compliance. With meaningful use and shared savings, the focus of most provider organi- zations has been on clinical systems, often overlooking the importance and impact that revenue cycle has on healthcare reform challenges and needs. As the healthcare industry considers the complexi- ties of proposed payment models for accountable care organizations (ACOs), episode-based payments are emerging as a promising model for incentive align- ment. What many provider organizations will realize

26 February 2012

as they dive deeper into the complex reimbursement strategies necessitated by ACOs is that revenue cycle demands will increase while fee-for-service revenues decrease. Organizations not ready to manage complex new payment models, such as episodic bundling and capitation, will likely see their revenue begin to shrink while they consider which processes and systems need to change for success.

If you are a healthcare finance professional, make sure you are working with your clinical teams on the importance of revenue cycle systems that can support complex reimbursement. According to a report from the Center for Ameri-

can Progress, “At the heart of health reform is the fundamental challenge to simultaneously improve the quality of our healthcare and lower its costs. And at the heart of meeting that challenge is changing the way we use and pay for care.” Much has been said

Seema Mathur (Twitter: @ aylafur) is a product manager for GE Healthcare, and Kim Lorusso (Twitter: @ kimlorusso) is a product marketing manager for GE Healthcare.

For more on GE Healthcare:

about quality of care when discussing healthcare reform or accountable care, but very little emphasis has been placed on the importance of reimbursement and the revenue cycle. But what if you didn’t have to cut costs to keep up quality? What if you were able to focus on investing them in the assets and resources you need to improve your patients’ care while also supporting your bottom line?

So that we are all on the same page, let’s define bundling and episodic bundling. Navigant Consulting provides comprehensive definitions for both: “Bundling is the process of grouping services for payment purposes – either for a particular person over a predefined period of time or for a particular clinical diagnosis or procedure. Instead of providers receiving payment for each individual service performed, they receive one payment amount for a group of services


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