5 Revenue Cycle Strategies Practice Owners can Implement Today

Steven Bisciello:

Hey, good morning. Thanks, Tony. Thanks for having me.

Tony Davis:

Awesome. Well, excited for the topic today around revenue cycle. But before we get into the discussion, a little bit of background. Talk about your history here at Eisner and some of the work you've been doing over the last 15 to 20 years.

Steven Bisciello:

Sure. So you hit it spot on. So I've been at Eisner going on 17 years. Came out of industry, was brought in when the healthcare group was a very small two to three person group to start a revenue cycle service line. My background at the time was operations and revenue cycle. Came in, was fortunate to work on a number of projects in both the hospital as well as the physician as well as the home care space. And since then we've kind of grown it. We've grown it to, it's one of our core service lines along with strategy, digital health, compliance, so on and so forth. So proud to start at the beginning here at Eisner and proud to be considered one of the subject matter experts in the field.

Tony Davis:

Yeah, absolutely. I think what I've learned and enjoyed about working together over the last few years is the diverse nature of what we bring to the table in the rev cycle space, and we'll get into some of the details here shortly, but also the geography that we cover within the Eisner team throughout the country. Basically you and I get the fortune of traveling the country and seeing different healthcare facilities across the country. Speak on that a little bit, some of the parts of this US that you've been to and some of the types of organizations you've helped.

Steven Bisciello:

Sure, sure. Yeah. For me, completely agree with you. Best part of the job is the different scenarios, the different geographies, the different modalities. We're fortunate together to service predominantly in the beginning was the northeast, New York, New Jersey, Pennsylvania, Connecticut. That then expanded down south into Maryland, Washington DC, Florida into Texas, now into the middle of the country, into Minnesota. We've done work on the West Coast and hopefully pretty soon we'll be leaving the mainland and maybe doing some work in the island of Puerto Rico. We've been fortunate to travel together and the different modalities we've seen in those areas are everything from your standalone hospitals, your hospital systems and large academic medical centers, your physician groups, either privately owned, hospital owned, or as we've seen in the last couple of years, private equity backed and owned. Specifically as well the other modalities are the home care space, which has been a big area for us to do as their rev cycle has been turned around some years back with the Medicaid fee-for-service expansion. So we've worked in the home care space, again, both skilled, not skilled, privately owned, hospital owned, private equity owned across the country.

Tony Davis:

Yeah. No, for me it just builds a lot of variety in the space, but there's a lot of standard tenants that follow the revenue cycle niche within a healthcare practice. And so let's touch on some of those things that we've seen in our experiences and in your case over your whole career basically. The one thing I want to start with is just the term revenue cycle itself. I feel like within a healthcare facility there's often some confusion in what that really means. A lot of practices will use the term business operations or office management or financial aspects of a practice, and I think those are all in there, but if you had a way to describe what revenue cycle really is, what words would you use in that space?

Steven Bisciello:

Sure. So I think cycle is a good term because there is a circle-ish format to it, and there are different components that make up that cycle that are all intertwined and dependent upon one another in order to function correctly. So the best way to describe revenue cycle is it's the lifeblood of the organization after the clinical component has been completed. So the patient visit, the patient encounter. And then all of the things leading up to that encounter, the encounter itself and post encounter, our makeup, the number of components that are necessary to post servicing that patient, being able to collect the fees for that visit. So there are three main areas within the cycle. There's what we call the front office. And the front office has a number of subcomponents in it, but the front office is predominantly the makeup of the scheduling of the visit, how the patient identifies the practice and the information that's provided to the practice in order to set up that initial encounter or that admission, depending on what we're talking about, inpatient or outpatient, the actual day of the visit, the registration, the patient coming in, meeting with the staff, and then going over or re-going over the information they provided at the outset when scheduling that appointment, making sure that's all accurate and correct, specifically the patient's demographics and their insurance information. Then we have the actual visit itself. So we call that the middle office where we have the patient encounter. The provider sees the patient, and now the provider finishes the visit and needs to document that that visit happened, or we call it the charge capture. There is a clinical component within that that the provider or one of the extenders of the provider has to document in the medical record why the patient was there, their history of their present illness, what they found when treating the patient, what their prescription was for a treatment plan going forward. How that information is documented in the medical record then needs to be translated or what we call coded into the allowable codes that the eventual billing and to the insurance companies will recognize and be able to decode that visit. So the provider needs to provide a diagnosis code. They need to provide actual procedural codes to document what they actually did with that patient. So that is the charge capture and entry, the coding and documentation of the visit. And then we have the actual billing of the visit. All of the information that goes into create the invoice, that goes out to whoever the payer is, whether it's a government payer, Medicare, Medicaid, whether it's a commercial payer or in some cases if we're billing the patient and we're providing them the backup invoice, that billing function begins the back office portion of the revenue cycle where we actually bill for the services the provider performed. That then goes to traditionally, let's use the insurance carrier as an example. The insurance carrier then acknowledges that receipt of that invoice. They do what's called an adjudication of that invoice and doing a check down to make sure that the codes provided match up to the patient's diagnosis and what was performed. And then the insurance carrier will then give a response to the practice where we get a response through what's called a remittance or an explanation of benefits. And EOB is the acronym. And the practice then responds to that, right? Did they pay us? We review to say, was the payment made? Was the payment made correctly according to our contract with the insurance carrier, or did they deny the visit? And there is a language in that remittance that tells us why they denied it. And then still in the back office, we then need to react. We either post a payment to our account, make sure that the funds are in the bank. We post that payment within our electronic medical record system in the business portion of it, or we now need to react. We need to read and understand why they denied the visit and then perform certain steps to rebuild that claim or appeal the reason that they denied that claim for in a second, and in some cases a third effort to try to obtain payment for that visit. And all of that lives in the back office portion of it.

Tony Davis:

Yep. For the listening audience, I think you just got a brilliant synopsis of rev cycle in four minutes. Don't have to read any more textbooks. Well done Steven. That really summed it up beautifully. And I think really emphasized the point for me if I'm a physician, a physician owner, a key executive, a leader or a supervisor in that space of how many touch points there are in the rev cycle process. I think at some point we've done the analysis over the journey, and it's almost over a hundred different touch points.

Steven Bisciello:

Correct.

Tony Davis:

Either not necessarily a hundred people, but various. And in a lot of groups, whether it's a small practice or large, you've got one person doing a lot of those functions, and that becomes very problematic. And because there's so many pieces and touch points that every aspect of that needs to be done very well, otherwise it really can have a negative and certainly a positive impact on the cashflow of the organization. I mean, I think that message gets missed quite a bit, wouldn't you say, as you visit these practices and these health systems across the country?

Steven Bisciello:

Would totally agree. I think the best way to look at it is right there is two synergistic processes that are going on. The patient unfortunately has an illness, has a reason for a visit, and the clinicians need to treat that in the best way possible to bring the best possible outcome for the patient's illness. At the same time and simultaneously the business aspect of that organization, hospital, home care, physician practice needs to be able to document, needs to be able to hit on all these touch points simultaneously because they're intertwined in order for the organization to be able to bill and receive the funds appropriate for that visit. And as you said, if it's done correctly, not only are we hopefully giving the patient a great outcome, but the practice is being rewarded financially according to contracted rates for that visit. And when it's optimal, the practice is in a profitable standpoint to take those funds and reinvest into the practice, both people and technology in order to create better environments to continuously treat patients or expand the treatment of said patients. So yes, it's obviously very important for the financial lifeblood of the practice and to be able to continue to work with the curve of healthcare. And I think Tony, what's made it even more complicated and fun is that there are so many budding technologies that are being utilized in the revenue cycle space, whether it's continued use and expansion of AI and those technologies can be plugged into all of those different areas that we just talked about. We have technologies that are used to register and schedule patients. We have technologies now that help the physicians document and code accurately or code on their behalf. And then we have technologies and we have insource and outsourced setups to help us bill and collect for that. So it's our job to help our client continuously maintain what we call best practices for all of those processes and ensure there are routine checks and balances that are being performed in order to ensure that all these items are firing accordingly, timely, and accurately amongst each other.

Tony Davis:

Yeah, wonderfully said. I think you hit on one trend we're seeing in the industry, which is the injection of the AI type solutions, and I think that's a podcast unto itself.

Steven Bisciello:

Yes.

Tony Davis:

I think that what I'd love you to speak on for a little bit in our remaining time is what are some, because you just touched on it, what are some KPIs, key performance indicators or some metrics that you would suggest practices track and look at that might help them identify some of the problematic areas that you just described that could be affecting that cash flow and/or the patient experience just as importantly, obviously? What are some things, just a couple, three or four things that you look at when you go into a practice?

Steven Bisciello:

Sure. There's so many different KPIs, and depending on the areas that we're looking at or that a lot of times our clients think that where the issue is originating from. We like to look at KPIs as well as processes from all those different areas I just talked about, the front, middle and the back office. So for example, we will take a look at what our time to make an appointment is, what our capacity levels are, and what's the current level of production, what is the volume of patients that we're seeing? We'll then take a look at the timeframe it takes, and from the time a patient is seen in order to, from the waiting room to get into the actual exam room to see the patient, excuse me, to see the provider. We then try to take a look at timeframes and accuracy levels of post-visit, how long it's taking to document said visit, and what the accuracy of the coding and documentation are by sampling or auditing the coding and documentation to say, "This is what the patient presented, this is what was documented in the record in the medical record and the subsequent codes that were selected. Do they match? Are they accurate? Are they at the actual levels of that visit, either above, below or right there?" We then try to take a look at now how long it takes us to bill a claim and do we get any type of what we call rejections from between the time the claim leaves our practice to when it gets to the insurance carrier through what's called a clearinghouse, what's rejecting meaning, what's missing on the actual invoice? Is there a code missing? Are the demographics wrong? Is there something that is not adjoining the both? We then try to take a look at how long it takes for a claim once it's been billed to be adjudicated and paid by the payers. Denial rate is what we look at a lot, right? Why are we getting denials from the percentage of the claims we send out, what percent are denying? And then subsequent KPIs underneath there, what are the different types of denials? Because a denial speaks to where the breakdown happened in the actual cycle. So what are the denial reasons and why, the origination? And then looking at ourselves as a practice or the vendors we utilize as a practice in order to fight those denials. We look at denial over turn rate. How successful are we in fighting those denials and liquidating that claim for payment? How long a claim is sitting in our accounts receivable? How many claims that our staff or our outsource vendor is touching per day and their success rate on that. And we also look at when we're collecting, how much are we collecting, what is our ratio of collections versus the level of volume we're outputting? So there's a whole cadre of KPIs, and that helps us to "diagnose" if there's an issue with the revenue cycle and where there are opportunities to optimize that. And it's also a leave behind that we teach our clients on how to continuously run which KPIs, when to run, which areas that those KPIs speak to, and what the reaction should be or the proactive steps that are taken based on what those KPIs are telling us.

Tony Davis:

Yeah. Again, a laundry list that hopefully the listening audience can jot down or rewind and listen to. I think that's a wonderful place to start. And I think obviously if any of those areas seem of concern and there's some benchmarks in the industry you can match against to see how you're performing as a practice to the industry, and that gives you a sense of there might be some issues within your rev cycle. I want to finish on one subject that you touched on just a moment ago, which is the in-house billing versus the outsourcing. I think we see that, and that could be a size thing, not just necessarily, but let me just maybe speak on that a little bit and how you've helped practices whether they have obviously an outsourced entity that's doing their billing for them. And I say billing. That again could be a cadre of services they're offering versus an in-house solution, and just sort of how you go about assessing either one of those.

Steven Bisciello:

Sure. Sure. So typically we've seen insourced, outsourced or hybrid setups where it's either we are contracting with a vendor to provide some of one service, multiple services within the revenue cycle on our behalf. Or we employ staff who are our full-time or part-time employees who are performing all of the portions of the revenue cycle or some portions of the revenue cycle. And then in the hybrid where have a combination of the both. So we typically see that from an outsourced perspective. Typically, our clients will either go to an outsourced setup if they're looking from a cost perspective, if they're having issues in finding and obtaining in-house talent, or cadre of both, they may not have the skill sets in-house and want to utilize a vendor for that aspect. So for us, when we are going in and trying to help a client determine and optimize their revenue cycle, we're either looking at the performance of their in-house of their outsourced or a combination of both. And based on what our process and our data reviews tell us, we are helping clients either say you're getting the benefit or you're not getting the benefit of the outsourced vendor. The cost may be lower, but the performance may be lower as well. So you're not getting what you're paying for. And/or there are issues with how the outsourced vendor is processing data either from a HIPAA standpoint, a compliance standpoint, and that it is your patient data, it's better to bring it and here's why. Or the reverse. We've had either a downturn or an overturn in insource staff where it's taking a long time to find replacement insource staff. So we may need to help our clients identify an outsourced vendor and actually move some of the functionality from an insource to an outsourced setting. So there's, as you can imagine, a number of steps involved in that. So I would say 22 bottom line that the industry right now, we see a great mix of insource, outsource hybrid environments. And the good news for our client is the baseline processes, the baseline data that we look for is the same whether you're using insource or outsource. So there are ways to identify performance, there are ways to audit and keep either insource or outsource staff accountable for what they do. And then there are ways to utilize those KPIs to continuously measure said performance and be able to make decisions on how do we want our setup, maintain as a hybrid, maintain as an outsource, bring it inside. So all of those areas that we talked about previously are utilizing regardless of what the setup of our client has. And Tony, I think what's important for our clients to recognize is that given that it's the lifeblood of the organization, there is always a great return on investment in taking a look at your revenue cycle and optimizing it. Obviously it can help to increase your overall performance operationally, financially, and the typical return on investment we've seen working with our clients in looking at and optimizing their revenue cycle and assisting in optimizing their revenue cycle is typically a minimum of a 5 to 10x on the professional fees they outlay in order to look and bring somebody like us in to help them fix and identify. So we're very proud of that, and it's helped our clients to not only improve their overall bottom line, but to use that return on investment as what I was saying earlier, to reinvest in their direct practice in their organization either people or technology.

Tony Davis:

Yeah. And Steven, I love. It's a great way to finish. I think I love the phraseology of investment. I think a lot of folks look at some of this as just another expense, right? But no, you're right. I mean, this is sort of the cliche, low-hanging fruit area of healthcare. I think there's a lot of opportunity in that space, and I think you've summed it up beautifully as far as the mindset you need to bring into looking at your revenue cycle components. So thank you for that. Well, I think that's a great place to stop. I really want to thank Steven Bisciello for joining us today. I think it was a wealth of information, and hopefully you took some good notes in the audience here. So Steven, thanks again for your time.

Steven Bisciello:

Sure, Tony, thanks so much. Always happy to speak with you and to spread the word on all of the services our group provides, obviously revenue cycle being one of the core service lines of our group. So again, thanks so much for the questions and for having me on.

Tony Davis:

Absolutely. Well, thanks for listening today. Look forward to future episodes of our EisnerAmper podcast for healthcare professionals, and we wish everyone a wonderful day.

Steven Bisciello:

Thank you.