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CASE STUDY 1
Revenue Cycle/Operations Improvement |
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A prominent West Coast health system, which
includes a very large hospital, 400 academic medical faculty
members and an affiliated 75 - physician multi-specialty
medical group, had a long history of under-performance
and declining collections in its professional fee business
office. Additionally, the system experienced poor communication
between the professional billing operation and their various
patient care services departments.
The health system engaged Sinaiko Healthcare Consulting, Inc. to lead a process improvement project for the
entire professional fee billing operation from the initial point of patient registration to the final point of account
balance collection. Based on Sinaiko's findings, the scope of the engagement grew to include additional issues
related to the hospital's patient financial services department.
In order to document patterns and evaluate the internal operations of the billing
office, Sinaiko began by conducting an initial assessment of four clinical practice
departments. Based on the findings of this initial assessment, the Sinaiko team
prepared an 18-month project plan and created a detailed Return on Investment
(ROI) analysis with estimates of collection improvement, increased charge capture
and an overall five-year ROI for the consulting services. Sinaiko's principals
then structured a unique compensation agreement with the health system in which
a portion of Sinaiko's fees was at risk, depending on whether the project achieved
selected performance targets. |
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The 18 - month project was vast and sweeping, including activities such as: |
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Restructuring management in the professional fee business office (e.g., redefining job functions, reallocating responsibilities, etc.); |
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Leading managers
through the process of evaluating all 100-plus staff
members' skills and abilities and subsequently reassigning
the majority of those employees to new job functions
better suited to their skill sets, decreasing staff in
some areas while increasing staff in the most critical
areas ; |
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Assigning individual consultants to be responsible for each segment of the business office process (e.g., front - end clinical locations, accounts receivable, customer service, coding and compliance, etc.); |
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Focusing attention
on the front-end of the billing process (findings indicated
a need to improve the quality of information coming into
the business office in order to improve its overall performance); |
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Creating a new internal process for charge capture at clinical locations, including the creation of new, uniform charge tickets customized for 65 specialties and a uniform process for the completion and submission of charge tickets to the business office; |
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Revising internal processes for document flow, cash collection at the point of service, and coding; |
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Designing and implementing a new physician training program to educate physicians on the billing process and their integral role with proper coding and documentation. This included the training of every physician on proper evaluation and management coding; |
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Focusing collection
teams on high-dollar amounts and problematic payers;
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Systematically implementing new policies and procedures throughout the business office. |
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The results of the Sinaiko engagement were
beyond what the health system had expected. After paying
all expenses related to the 18-month project - including
Sinaiko's fees - the health system was still nearly $1 million
cash - positive as a result of improved collections from
the process enhancements during the term of the project.
Improvements have been sustained and are ongoing. Cash flow
also improved, with the average number of days in accounts
receivable declining from 160 to 114. Moreover, the overall
revenue cycle and operations changes implemented during Sinaiko's
project have allowed the health system to increase its total
collection rate on an ongoing basis by more than 15 percent. |
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