Revenue Cycle Management Reformation

Earlier this month, KLAS announced the release of their report on “Revenue Cycle Management Reformation: Will Software Solutions Keep Up?”. KLAS interviewed hospital executives in 171 organizations to understand their revenue cycle management (RCM) plans and their views on RCM software vendors.

Paul Pitcher, KLAS’s Revenue Cycle Research Director, sat down with me to talk about the study and its implications.



Q. Why is the report entitled “Reformation”? This leaves the impression that RCM is just now leaving Medieval times.

RCM is a newer term. We used to focus more narrowly on patient accounting. The need now is to support the entire revenue cycle. There are a number of other components and deeper levels of technologies that need to be applied. And to that end, there needs to be a reformation for those vendors to plan on providing functionality to every point in the revenue cycle.

Q. About 6 years ago, an RCM survey found that 25% of hospitals were planning to replace their RCM systems. Do you think the 38% you found in your study seems like a statistically significant increase?

I would say it’s probably statistically significant. Six years ago the need was clinical systems. While that need hasn’t changed for many, for others, they have addressed the clinical systems gap and are now coming around to address their oldest technologies. For many, that is the revenue cycle.

Q. Half (of the 38%) are planning on staying with their current vendor and half will switch. And those replacements will begin in the next 2 years. That sounds like an extraordinarily high level of RCM activity. About 10 years after the last major wave (pre Y2K). Why are these changes happening now? What are the drivers for changing the revenue cycle systems?

For some, clinicals are solved and now it is time to address financials. For others, it is an opportunity to address clinicals and financials as part of a single vendor solution. The vision there is for an integrated solution with clinicals, financials and optimally even ambulatory. The drivers vary but in large part, it is a desire to bring additional levels of technology to improve revenues. It might be to displace bolt-ons in favor of an all encompassing integrated solution. It might be to offer greater levels of technology through workflow, minimizing what are currently manual processes. All of this has to be weighed against the question of whether these changes to the revenue cycle will ultimately yield an ROI.

Q. Of the 38% replacing RCM, half will change RCM vendors. What percentage of those will change to their CIS vendor?

The question asked during the study is “What impact will your current CIS vendor have on the decision to purchase the next generation RCM solution” 55% of respondents said the impact was high. Additionally, about a quarter of respondents said they were likely to replace their core clinical systems in the future.

Q. There’s a striking difference in Desired Features between those that rated “clinical/financial integration” (16%) vs. “overall integration” (45%). Does this suggest that the clinically-driven revenue cycle is over-hyped? And how does pay for performance (P4P) enter into the integration considerations?

Best of breed RCM still has a clear place – those vendors are still getting wins. As to P4P, this tends to be more of a decision support challenge and still in the early stages.

Q. Strikingly, the vendor performance overviews suggest that each of the top 8 major vendors are struggling with aspects of their next generation solutions. Enterprise vendors with the largest current PA install base also seem to be generally lagging in delivery on their next-gen product. Will this slow down actual conversions, as the market waits for “their own” vendor to have a solution?

Some customers have indicated a willingness to wait for their core vendor to deliver. Other customers are clearly not going to wait. One item that clearly will slow down conversions will be an inability to show progress and completeness of design with the technologies that are being delivered. One comment I frequently hear from providers is a desire to avoid the negative experiences associated with a product that is not ready for prime time.

Q. What are the innovations that seemed to drive the most value (for healthcare organizations) and greatest differentiation (for vendors) in the RCM market?

Differentiators will be a centralized or coordinated business office solution versus a single entity hospital solution or a solution that uses technology to maximize the revenues at every opportunity while minimizing the FTE requirements

Differentiators will be an integrated financial and clinical hospital information system or an HIS that also solves the needs of the ambulatory environment.

Differentiators will be process driven workflow functionality that is customer designed

Differentiators may be revenue cycle management solutions that satisfy many of the revenue cycle requirements that are now being left to third party vendors to solve by way of bolt on solutions; in effect, integrated solutions.

Physician Adoption of EMR's

New England Journal of Medicine's July 3 print edition will include a survey on physician adoption of EMR's. Conclusion: 4% have fully functional EMR's and 13% have basic ones. What about the other 83%? What are the barriers?

Not surprisingly, it's capital and return on investment.

So is there any good news in this picture? Actually yes. Physicians that have adopted are seeing the value in patient safety, operational effectiveness and cost.

Incentives for EHR adoption: Medicare demo project announced

Excerpts from the HHS Medicare fact sheet:

Centers for Medicare & Medicaid Services (CMS) is implementing a five-year demonstration project that will encourage small- to medium-sized primary care physician practices to use electronic health records (EHR) to improve the quality of patient care.

Demonstration Project Design
The demonstration is designed to show that widespread adoption and use of interoperable EHRs will reduce medical errors and improve the quality of care for an estimated 3.6 million consumers. Over a five-year period, the project will provide financial incentives to as many as 1,200 physician practices that use certified EHRs to improve quality as measured by their performance on specific clinical quality measures. Additional bonus payments will be available, based on a standardized survey measuring the number of EHR functionalities a physician practice has incorporated. To further amplify the effect of this demonstration project, CMS is encouraging private and public payers to offer similar financial incentives consistent with applicable law.

All participating practices will be required to have implemented a Certification Commission for Healthcare Information Technology (CCHIT)-certified EHR by the end of the second year in order for the physician practice to remain eligible for the demonstration. Physician practices must be utilizing the EHR by that time to perform specific minimum core functionalities that can positively impact patient care processes. These include clinical documentation, recording the ordering and results of laboratory and diagnostic tests, and recording prescriptions. However, the core incentive payment will be based on performance on the quality measures, with an additional incentive payment based on the degree of EHR functionality used to manage care.

The demonstration will be implemented in two phases. CMS will begin working with the partners in Phase I communities over the coming months to develop site-specific recruitment strategies, and recruitment of physician practices will start in the fall. These activities will begin in 2009 for Phase II sites.

The four communities selected for Phase I implementation are Louisiana; Maryland/Washington, D.C.; Pittsburgh, PA (and surrounding counties); and South Dakota (and surrounding counties in Iowa, Minnesota, and North Dakota).

Eight communities have been selected for Phase II implementation, including Alabama; Delaware; Jacksonville, FL (and surrounding counties); Georgia; Maine; Oklahoma; Virginia; and Madison, WI (and surrounding counties).

Year-by-Year Incentive Payments
The basis for financial incentives that will be provided to physician practices will vary over the five-year period, including payments for both reporting and performance on quality measures.

Year One. Payments will be based on physicians’ use of CCHIT-certified EHR functionalities to manage the care of patients, with a higher payment for more sophisticated health IT use, such as using EHRs to facilitate care management activities or to share a patient’s records among providers of care. Payments will be determined by a practice’s score on an Office Systems Survey (OSS). This annual survey will track the level of EHR implementation at the practice level and the specific EHR functions used by each participating practice to support the delivery of care. Higher scores on the OSS will result in increased incentive payments to participating practices. During the first year, participants may earn a maximum of $5,000 per physician or $25,000 per practice.

Year Two. After the second operational year, payments will be made to participating physician practices that are using CCHIT-certified EHRs and reporting clinical quality measures. Again, additional payments will be based on how the practice has used EHR functionalities to change and improve the way it operates. Practices that have not yet implemented a certified EHR or do not meet minimum functional use requirements by the end of the second year will be terminated from the demonstration. Payments in this year may reach a maximum of $8,000 per physician or $40,000 per practice.

Years Three to Five. During these years, payments will be based on actual performance on the clinical quality measures, rather than just reporting. An added payment will continue to be offered each year based on EHR functionalities used by the practice. Payments may total up to $15,000 per physician or $75,000 per practice during each of these three years. Total payments under the demonstration may be up to $58,000 per physician or $290,000 per practice over five years.

Personalized Health Care doesn't get more personal than this

On Tuesday of this week, with little notice from the healthcare IT press, the Personalized Health Care workgroup (co-chairs are Doug Henley and John Glaser) presented its recommendations related to pharmacogenomics to AHIC.

Personalized health care focuses on genomics, specifically the identification of genes and relationship to drug treatment, to allow for tailoring of medical treatment. HHS had established two broad goals for Personalized Healthcare in their September 2007 announcement:

1. Provide federal leadership supporting research addressing individual aspects of disease and disease prevention with the ultimate goal of shaping preventive and diagnostic care to match each person’s unique genetic characteristics.
2. Create a “network of networks” to aggregate anonymous health care data to help researchers establish patterns and identify genetic “definitions” to existing diseases.

The broad charge of the Personalized Health Care Workgroup is to "establish a common pathway based on common data standards to facilitate the incorporation of interoperable, clinically useful genetic/genomic information and analytical tools into electronic health records to support clinical decision-making for the clinician and consumer."

The workgroup reported that pharmacogenomics' use in clinical practice has been slow due to:

• "Lack of an evidence-base and information on clinical utility
• Lack of clinical guidelines for the use and interpretation of pharmacogenomic tests in pharmaceutical selection and treatment decisions
• Impediments to reimbursement for the performance of laboratory tests
• Paucity of clinical practice experience with pharmacogenomic test"

The workgroup's June 3 recommendations include:

1. EHR Standards to Enable Clinical R&D: Expand standards to include pharmacogenomics data, within the context of informed consent and privacy considerations. Establish EHR minimum data sets to support clinical interventions based on pharmacogenomics data with demonstrated clinical validity and utility. Pilot unidirectional flow of this information from EHRs for clinical research.
   
2. Clinical Decision Support: As Clinical Decision Support (CDS) approaches and standards are integrated into healthcare IT, the implications of pharmacogenomics should be taken into account.
3. Medication Prescribing: HHS should work with stakeholders to document challenges, opportunities and information flows related to dispensing pharmaceutical drugs based on pharmacogenomic test-derived interpretations.
   

The workgroup contends that these actions will encourage physician adoption of pharmacogenomics.

ONC roadmap - On the road to Abilene?

Today, Rob Kolodner, Office of the National Coordinator (ONC) for Health Information Technology, released ONC's strategic plan for the next 5 years.

The ONC synopsis focuses on 2 goals: Patient-focused Health Care and Population Health. ONC defines Patient-focused Health Care as "enabling the transformation to higher quality, more cost-efficient, patient-focused health care through electronic health information access and use by care providers, and by patients and their designees." Population Health "enables the appropriate, authorized, and timely access and use of electronic health information to benefit public health, biomedical research, quality improvement, and emergency preparedness." Themes of privacy and security, interoperability, adoption, and collaborative governance apply to each of these goals.

Critical mass in the use of CPR's combined with exchange of health information between providers and access to information by patients will be facilitated by the Nationwide Health Information Network.

ONC defined the criteria for success as:

Health IT becomes common and expected in health care delivery nationwide for all communities, including those caring for underserved or disadvantaged populations;

Your health information is available to you and those caring for you so that you receive safe, high quality, and efficient care;

You will be able to use information to better determine what choices are right for you with respect to your health and care; and

You trust your health information can be used, in a secure environment, without compromising your privacy, to assess and improve the health in your community, measure and make available the quality of care being provided, and support advances in medical knowledge through research.

Is this The road to Abilene? Or the road to a better health system? Will health systems revolt over the massive investments needed to deploy enterprise systems, where many of the benefits don't accrue to the providers? Or can investments and benefits be better aligned? And will Health Information Organizations be sustainable?

There is solid momentum and engagement by HHS, healthcare providers, and healthcare IT companies. As an example of the energy level, CCHIT just reported that they had over twice as many volunteers as available roles in unpaid positions. There's clear value to patients and public health if these goals can be achieved.

Certification Commission for Healthcare Information Technology (CCHIT) chair Mark Leavitt has talked about the critical need to address the mis-aligned costs and benefits in the health system. Leavitt positions CCHIT as the enabler to a more virtuous cycle. The critical ingredient still missing in this equation is provider incentives of sufficient substance to close this loop. Whether this is the Road to Abilene or not, depends on whether providers can buy in at a reasonable sustainable cost.

Making Sense of National Healthcare IT

Avance Health Analysis

Recent news of HITSP's submissions to The Community (AHIC) June meeting, prompted a reader to ask: How do the various national healthcare initiatives (AHIC, HITSP, HHS, CCHIT and NHIN) fit together?

Is the relationship between these organizations Rube Goldberg-esque? Or is there some more coherent design?



The mission of American Health Information Community ("The Community" or AHIC) is to provide "input and recommendations to the Department of Health and Human Services (HHS) on how to make health records digital and interoperable, and assure that the privacy and security of those records are protected in a smooth, market-led way." AHIC is presently reorganizing itself to ensure its viability beyond the term of the current administration, by establishing "AHIC 2.0" as a sustainable public-private organization. AHIC is the focal point for guidance to HHS on priorities for interoperability and develops the use cases for these priorities.

The Healthcare Information Technology Standards Panel (HITSP) mission is to "harmonize and integrate standards that will meet clinical and business needs for sharing information among organizations and systems." HITSP takes its guidance on priorities and use case definition from AHIC and proposes standards (like those to be presented today at the AHIC June 2008 meeting) to the HHS Secretary.

The HHS Secretary can accept the recommendations which starts the clock on a one year cycle of testing and implementation. At the end of this cycle, the HHS Secretary can choose to "recognize" these standards. Once standards are recognized, by Executive Order, they are incorporated into new Federal Systems and Healthcare Contracts.

Recognition of these standards also serves as input to the Certification Commission for Healthcare Information Technology (CCHIT). CCHIT is a recognized certification body (RCB) for Electronic Health Records (EHR) with the goal of accelerating EHR adoption. CCHIT establishes its roadmap and criteria for Electronic Health Records based in part on the recognized standards from the HHS Secretary.

These recognized interoperability standards are also incorporated by the Nationwide Health Information Network (NHIN), a network of networks promoting Health Information Exchange.

HITSP keeps on rolling

Chair of HITSP, Dr. John Halamka, announced that he will be presenting 4 new harmonized interoperability specifications to Health Human Services Secretary Leavitt and the American Health Information Community (AHIC) at the June 3 AHIC meeting. These specifications focus on Medication Management.





These specifications and definitions include:

Medication Dispensing Status provides a medication prescriber the dispensing status of an ordered prescription (dispensed, partially dispensed, not dispensed).

Medication Orders defines the transactions between prescribers (who write prescriptions) and dispensers (who fill prescriptions)

Medication Formulary and Benefits Information performs two tasks: 1) performs eligibility check for a specific patient's pharmacy benefits and 2) obtains the medication formulary and benefit information.

Patient Generic Health Plan Eligibility Verification provides the status of a health plan covering the individual, along with details regarding patient liability for deductible, co-pay and co-insurance amounts for a defined base set of generic benefits or services. The base set of benefits includes coverage status and patient liability for medical, chiropractic, dental, hospital inpatient, hospital outpatient, emergency, professional physician office visit, pharmacy and vision services that are included in the patient's generic health plan benefit.

Dr. Halamka announced he will also be presenting a technical note on Document Reliable Interchange to support a secure communication of a clinical document over a network.