eRCMM: Exdion Revenue Cycle Maturity Model
Healthcare organizations face multiple challenges, such as sliding reimbursements, changing
technology and a never-ending flux in regulations. These challenges are just the tip of the
iceberg. It is imperative that health systems and providers require a systematic approach with
greater coordination, integration and productivity across functions to achieve these goals.
Business models, organizational process and systems need redefinition.
Newer services need to be introduced to provide a revenue stream augmentation. While the task looks complex, it is possible to scale through a systemic approach, or what is known as design thinking. This not only helps optimize current businesses, but also one that can help create future value streams.
Currently, regulators and payers (government, health plans and others) require doctors and hospitals report quality. Pay-for- performance programs are already a norm. Payer guidelines are becoming complex, increasing the pressure of the collection system.
The MGMA Data Dive of ‘Better Performers’ offer four key criteria for healthcare
service providers to focus on: Operations, Profitability, Productivity and Value
MGMA attributes better performance in medical practices by:
Achieving higher revenues while controlling operating expenses
Monitoring IT expenditures
Achieving greater physician productivity
Increasing patient portal usage
Overall effectiveness in faster patient scheduling
o Same day appointment availability
o Minimizing no-shows and cancellations
Interestingly MGMA reveals that high performing physician-owned practices spend lesser IT per FTE physician while their hospital-owned counterparts spend more. One key example is physician-owned primary care which spends $3,685 less on IT expenses per FTE physician in comparison to $1,216 more in hospital-owned practices. ‘Better performing’ practices report lesser operating expenses when compared to their peers. With lower expenses, the same ‘better performing’ practices also report more earning in total medical revenue after cost deductions.
Overall, physicians in most ‘better performing’ practices report higher productivity and better revenue. Finally, ‘better performing’ practices reported higher patient adoption rates from their patient portal. As another point, ‘better performing’ primary care practices were found to offer:
Less time to schedule an appointment
A higher percentage of total appointments that were same day
A lower no-show rate
A lower appointment cancellation rate
Provider organizations (hospitals and physician networks) share high commitment to quality improvement, but often lag in effective management of government and health plans. In several regions of the US, industry stakeholders have created collaborative programs to measure and manage the quality of care, and to improve the performance of healthcare systems as a whole.
Absence of a common language and platform that enable industry stakeholders to measure and manage quality has often hindered these laudable efforts.
eRCMM ® : Maturity Framework for RCM
Exdion has developed an industry insight based ‘Capability Maturity Model’ - eRCMM ® , for performance improvement. This enables industry stakeholders to work together and achieve high performance improvements. Exdion’s Revenue Cycle Maturity Model is a framework that quickly allows companies to assess where they stand and what improvements are required to reach the next stage of maturity.
Exdion's maturity model is a linear scale model where every consecutive stage reflects a higher process and system maturity along with increased standardization. Organizations that adopt this shared maturity model have a place to start when redesigning their processes, a common language and vision, and accepted benchmarks against which to assess their progress.
Based on the analysis of companies and their consistent ability to deliver on collections, we identify four stages of maturity –
Practice setup and front office play a key role in acquiring new patients, hassle free appointments, and optimization of demand and supply. Revenue per patient, scheduling
mismatches, cancellations and no shows rates, have a huge impact on the patient experience
and revenue generation.
Accuracy and integrity of data flowing through the systems is key to a healthcare provider’s decisions. Improper documentation can lead to coding errors and fraudulent billing. Data integrity, data accuracy, data flow and storage, and business continuity have a significant influence on the outcomes for patients. Clinicians are mandated to adhere to clinical policies and procedures. The unavailability of the right data can lead to erroneous results. Healthcare organizations exhibit varying degrees of maturity with respect to data accuracy and integrity of billing data along with other systems.
Documentation covers the purpose, completeness, storage and retrieval of data. Information management encompasses all administrative activities that deal with generation, dissemination, analysis and storage of information. Information chain management will capture customer request, escalations, follow ups, information about service allocation, denial audits, service completion time and post service feedback.
Revenue assurance maturity cover service costs, revenue realization, workflows, process documentation, rework and redundancies in systems and procedures, knowledge management including consolidation, enhancement, storage and retrieval, skills and capabilities of staff, etc. Revenue assurance also covers service roll outs, service standards and work plans.
Customer management involves planning, selling, contracting and supporting the customer throughout the healthcare cycle.
Revenue cycle maturity also depends on the optimal mix of payers and partners to drive revenue and sustainable growth. Contracting with the right payers, comprehensive understanding of payer rules and ensuring that payers pay within specified time periods has huge financial implications. Leveraging partners for non-clinical activities and adoption of various revenue sharing model, are also indicators of the maturity of partners and payers management. Partner management includes seamless integration of systems across the company and their partners.
Finally, availability of a comprehensive measurement system for capturing cost, revenue and assets is important to bring out desired outcomes. Performance relates to the availability of metrics to define and manage the RCM process. Ability to capture and report metrics like denial rate, no show of patients, patient surveys, denial associations or denial costs improve the predictability and sustainability of billing operations.
Figure 1 presents the four maturity stages of eRCMM ® management in billing organizations.The four stages of eRCMM ® maturity is based on the comprehensiveness of the processes
eRCMM: Maturity Stages of RCM
Stage 1: Physician groups, especially in the 3-6 physician category, have no formal SOP’s and documentation is weak. Traceability of issues and deniability association is unavailable. Capacity planning is weak and denial management is completely reactive. Service provider relationships are merely transactional in nature, with cost being the driver. Revenue cycle performance metrics are far from being effective and report very rudimentary.
They experience revenue leakage due to poor front office management, coding practices and manual errors. Physician groups at this stage also experience revenue losses due to not filing within the SLA defined time limits and other deviations.
Stage 2:The maturity on eRCMM ® is best described as ‘” emerging”. At this stage practices have made investments in organization, process and measurements. Basic documentation and SOP’s exist, some key performance metrics are identified. Revenue assurance models are largely reactive to the requirements. No knowledge management initiative exists to codify and formalize the root causes of denials.
Companies are cognizant of possible leakage areas but have not devised comprehensive mitigation plans. SOP’s, though documented, only focus on the required domain knowledge but fail to cover the system specifics. Employee attrition impacts the revenue due to poor knowledge management practices. With broader appreciation for the business and formalization of practices, physician groups mature to stage 3.
Stage 3: This stage, described as “defined” or “externally focused”, is when the physician group builds client relationships on the basis of their delivery value and cost advantages. At this stage, physician groups have made significant investments in data capture and consolidation to drive planning and control of leakages as well as cost of delivery. Revenue Cycle Management is proactive and follows a well-defined methodology.
At this stage, the SOP’s are broader and richer, encompassing not just the domain knowledge but also system level. At this stage, physician groups use data analysis to identify the causes of revenue leakage and put in place fairly effective controls to arrest them. Administrative processes are system defined, devoid of human intervention and not prone to manual errors.
Stage 4: As the revenue management experience spreads wider and deeper within the organization, physician groups evolve to “optimized” stage. At this stage of maturity, physician groups strategically evolve and their patient relationships are no more individual driven, but rather platform based. At this stage, physician groups can closely track cost to service and monitor revenue ratios. Administrative processes are managed on a predictive mode with data and intelligence seamlessly flowing through various units. At this stage, physician groups achieve and sustain industry benchmarks, First Pass Acceptance (FPA) and denial management metrics. Table 1 shows parameters associated at various stages.
From an industry perspective, RCM maturity stages are closely related to the performance of the service provider's supply chain. As shown in Figure 2, claim rejection rates, code compliance, denial overturn ratio and turnarounds are poor at stages 1 and 2. As the physician groups evolve to stage 3 and 4, investments in process, technology and people help realize improved performance metrics.
eRCMM framework based RCM transformation process
A healthcare provider’s improvements plan starts with a vision of desired achievements. Setting a clearly defined scope and context is the key for RCM improvements, for both short and long-term goals. Activities at each stage that are connected and lead to the next, need explicit enunciation. Assessing current organizational capabilities, customer pain areas and benchmarking of competition is critical to define value levers of RCM improvements.
Spell out capability improvement roadmaps that would be targeted during the year, detailing the initiatives, investments and ownership.
It is neither desirable nor practical to completely overhaul systems and procedures to implement a RCM improvement program. While considering a RCM improvement program, think of a bi-modal strategy: one to sustain current operational requirements of the business and the other that brings agility for future business requirements.
We propose a clear 3 step methodology for analyzing each performance element (as shown in the below figure) in order to shape a robust value creation strategy for your clients.
Owners, capacity Build capabilities Measure at all levels
Workloads Governance structures Communicate success
Challenges Right person for right job
Areas to improve
The first step involves conducting a comprehensive “as-is process maturity audit”. This helps identify current processes, gaps and scope for improvement. The process audit also focuses on distinct “moments of truth” interactions between the physician groups and the patients. This comprises evaluation of the current service levels in two phases. One from an internal service quality level – input quality, quality of data entry, coding quality, SOP adoption, awareness at the provider office, common payer mix, types of payer contracts handled, common denials, denial trends, quality of data currently being tracked to predict/prevent denials etc. Input quality in this context primarily refers to the quality and accuracy of charts, scanned demographic elements, ICD and CPT coding etc. Effective management of “moments of truth” becomes crucial to reinforce brand experience and service quality. Physician groups must align employees at all levels to be aware of the organizational goals and also be able to keep an eye on cost collection at every stage of the claim. The second phase is an evaluation from a business level – business models, contingency rates, cost to collect, gross margins, revenue leakage due to internal and external factors, and current patient satisfaction levels.
In the second stage, define standardized processes, create and configure appropriate process changes based on the eRCMM framework. People's capability gaps need to be addressed through extensive training and on the job learning. Create formal governance structures that can capture process deviations, report denial management ratios and provide comprehensive control of the RCM processes, focus on process flows and technology adoption. With change management handled, the scope gradually increases with small wins at different levels to sustain motivation through the transformation life cycle. On the process front, reduce manual intervention, identify bottlenecks, and bring in reliability. Gather intelligence to drive SOP adoption and conduct SOP reviews along with various partners who contribute to the system. Train users about the new SOP steps and assess how much has been internalized and implemented. Standardize inputs and output formats. Roll out standard service delivery frameworks. Create and track agent or operator process adherence and productivity. Implement real-time monitoring of production and capacity implementation. Finally, schedule appointments to review and detect charges leakages, clearinghouse deviations, rejection rates etc.
In the 3rd stage, deploy company-wide processes and system changes with common objectives across different units and measures. Clearly articulate performance measures that reduce revenue leakages, reduce wastages and improve first time right outcomes. A clear roll-out plan is defined with key change owners at every level, defined milestones and time frames. A continuous review mechanism is put in place with appropriate incentives for driving changes at all levels. The end goal would be to continuously assessing and refining.
What must you remember when adopting eRCMM?
Our improvement program experience has taught us a few do’s which are presented below.
– A phased approach to automation, with priority on capturing denial causes, pays huge dividends.
– Create process, product and change owners at all levels, allotting physicians more time with patients.
-All processes must be redesigned from the patient's perspective.
-Top management has to consistently create the sense of urgency.
-Keep challenging the assumptions. Ask for data.
-RCM improvements can be obtained through outsourcing ,having a quick & significant impact.
-Hold weekly reviews with the partners and conduct patient interviews and surveys.
Improvisation is a continuous process and sometimes it is necessary to tweak certain areas even after the implementation has been done.
Exdion’s strategic eRCMM framework can help physician groups deliver high quality care while being profitable. Stage-wise maturity helps companies establish an effective collection focused service strategy. Benchmarking against maturity models helps physician groups refocus on patient ‘moments of truth’ in order to sustain patient satisfaction while lowering cost on each claim processed. With the data made available to physician groups in the “Optimized” stage, a perception analysis can help differentiate themselves from competition.
The eRCMM framework is a proven and effective tool in transforming health systems. Stages of maturity may vary but challenges remain the same –reducing margins, frequently changing legislations, technology platforms and the threat to be pushed out of the race. eRCMM lends an effective framework with the right activity roadmap for every future-oriented physician groups to drive superior value and higher revenue.