What is Revenue Integrity, and how can your organization best achieve it?
December 14, 2017 •David Fletcher
By David Fletcher
Vice President – Innovations, Streamline Health, Inc.
Ten years ago, not many hospital administrators would list revenue integrity as a major organizational priority, but today the concept is more important than ever. In fact, nearly a quarter of hospital CFOs name revenue integrity as their top priority, according to a recent Healthcare Financial Management Association (HFMA) survey.
But when it comes to implementing new practices and guidelines to address revenue integrity, one must first clarify: what does revenue integrity actually mean? And how does it fit into your organization’s current strategic and operational approach to revenue cycle management?
Creating a revenue integrity definition
At first glance, the concept of revenue integrity may seem easy to define. When a person has integrity, he or she is honest and morally upright, even when that requires decisions and actions that may not serve one’s personal interests. When an organization has integrity, the same is true. It has a codified approach to establishing and supporting ethical business practices that compel all associates to do the right thing in a variety of situations.
For example, in the healthcare industry, we are concerned with revenue integrity to make an honest buck. A hospital that institutionalizes revenue integrity has likely developed a set of policies and procedures that compel all associates, especially those involved in the revenue cycle, to do the right thing. Specifically, in the mid-revenue cycle, that means coding encounters in a way that maximizes legitimate reimbursement. The key word here is “legitimate”, as in legally and contractually compliant.
Revenue integrity for a hospital is more than being morally upright. Being fully compliant in coding and billing practices also reduces the risk of costly downstream efforts such as managing external audits and even payment denials. Revenue integrity brings operational efficiency.
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The reasons in support of revenue integrity are sound and few would argue against them, yet so many organizations struggle with this. Why is that?
In healthcare, we used to hear the term “revenue optimization“. We don’t hear that so much anymore because it seems to focus only on increasing reimbursement without consideration for legal and contractual compliance. The forces behind increasing revenue seem obvious; get reimbursed for all services provided, for the complexity/acuity of care delivered, for comorbid conditions that were also treated, and for high scores on quality outcomes. A more insidious motivation might be to make money in all ways possible—a less-than-honest buck. While hospital leadership would never condone this, it is possible that a small business unit within an enterprise might
The counterbalance to increasing revenue for these multiple reasons is legal and contractual compliance. This is where revenue optimization becomes revenue integrity and where institutional rectitude must be nurtured. The challenge in doing this is that legal and contractual compliance are complex and ever changing goals in the healthcare industry. Reimbursement for care delivery can come from multiple sources (federal, state, payer). The reimbursement rules are different for each and can even be different from patient to patient. For patients in managed care or value-base payment plans, measurement of quality outcomes is critical, while for patients in traditional fee-for-service plans a keen focus on code and modifier combinations is critical. Balancing the drive to increase revenue with the imperative to comply with rules is the essence of revenue integrity. And it also helps illustrate how complex achieving this goal can be in the 24/7/365 “Margin vs Mission” world of healthcare.
Revenue integrity for a hospital organization has practical benefits beyond fairness and honesty. When an organization prioritizes revenue integrity, it reduces the risk of external audits and can even help reduce denial of payment. Avoiding external audits saves all parties time and money, but even when an audit is initiated, an organization with a strong focus on revenue integrity will be able to prepare for and manage that audit more efficiently and confidently.
Viewing the revenue cycle from different viewpoints
Understanding that revenue integrity is multifaceted is the first step to its realization. A sustainable revenue cycle integrity program depends on the involvement of stakeholders from every part of the organization. For that to become a reality, an organization needs to make a commitment to transparency. Siloed departments make that difficult, as their ability to collaborate with others, or even appreciate their own role in revenue integrity, is limited. By promoting communication throughout the hospital, leaders will begin to see how their view of revenue integrity meshes with that of other stakeholders.
“Each stakeholder at an organization might have a different definition of revenue integrity based on their unique perspective.”
This versatile definition of revenue integrity asks the question: Are there best practices an organization can adopt to create a unified approach to optimizing the revenue cycle? According to Healthcare Revenue Integrity Advisor Caroline Rader Znaniec, there may not be a standard set of rules, but there are methods an organization can adopt to create a culture of integrity.
Technology solutions that can cross-check billing codes before bills are dropped are key to a strong revenue integrity program (more on this below), but that does not replace the need for strong policy and shared cultural attitudes and beliefs throughout an organization. It can be useful to think of revenue integrity as a continuous improvement lifecycle. Stakeholders in revenue integrity need to set a north star in terms of core values and policy, then as new challenges to revenue integrity arise, they should discuss root causes, define initiatives to address the challenges and later evaluate how effective the initiatives are at meeting —and eventually raising— the bar.
Discover how Hunt Regional Medical Center generated more than $1.8M in revenue integrity improvements.
Here’s how various stakeholders may view revenue integrity:
- Quality officer: Patients are at the center of the revenue cycle. When it comes to revenue integrity, the quality officer needs to ensure that the patient experience— including outcome quality, acuity of care and the requested reimbursement— is accurately reflected in the final bill.
- Compliance officer: True revenue integrity depends on strict adherence to all laws and regulations. These can change frequently, so what worked yesterday may no longer be effective today. The compliance officer should develop reports that show how new regulatory developments impact the organization’s processes and overall revenue cycle, and work with each stakeholder to adjust accordingly.
- Coding director: The coding department is also focused on compliance, though from another angle. It’s up to the coding director to support the coding staff as well as any clinical documentation improvement programs in a manner that aligns with revenue integrity goals.
- CFO: The responsibility of allocating resources throughout the organization often rests on the shoulders of the CFO. He or she should be able to develop an accurate representation of what level of revenue integrity is being achieved, what opportunities exist in terms of addressing it, and the respective impact of each.
- Physician: Doctors play an important role in the revenue cycle, because the billing process starts with their initial documentation. Physicians have a role to play in optimizing patient engagement by accurately documenting care and quality measures, and interfacing with the HIM/coding department, when necessary.
Keeping everyone pointed in the same direction requires greater transparency and communication between departments and an acute attention to detail. It starts with a plan, but without the right technology, executing that plan can be an insurmountable task.
Using technology to improve revenue integrity
Conducting internal coding audits to improve accuracy prior to bill drop can create delays in addition to being very costly. Post-billing audits are equally constrained as they tend to be on small, random samples of cases. This retrospective feedback occurs after the denials or compliance issues have occurred, which means root causes go unaddressed and efforts are limited to reacting to— instead of preventing—the accuracy and efficiency issues that hinder revenue integrity.
The answer here is to put the intelligence of keen auditors into a machine in a highly focused manner. Expert rules and pattern recognition on historical auditor data (AKA, machine learning) can represent a quantum leap for a revenue integrity program. Using automated scanning, all coding can be analyzed prior to billing. Those cases that have questionable code combinations are flagged for review, while those within an acceptable accuracy range can flow through to billing. It’s a more manageable way to screen all encounters, while enabling optimal use of resources on the highest priority cases.
In many ways, automation can be the key to achieving revenue integrity. As government regulations and payment methodologies become increasingly complex, it becomes difficult for hospital administrators, coding staff and others to keep up. For every element of the revenue cycle that is underperforming, the impact adds up in terms of lost revenue, increased risk of RAC audits and underreported quality measures. For example, when it takes several days after discharge to produce a patient’s bill, and then weeks or even months to audit that bill, any mistakes within it are virtually set in stone. Even if it contains errors which cost the organization thousands of dollars, there’s often little anyone can do about it. The revenue cycle doesn’t take breaks, and revenue integrity —as well as overall financial performance—suffers as a result.
With integrated technology and automated solutions, every stakeholder within the revenue cycle becomes empowered to do their job and support revenue integrity. RCM solutions can free up resources so administrative staff can perform their jobs more quickly.
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See for Yourself
As more providers are discovering, pre-bill technology is the key to optimizing revenue integrity and financial performance across all service lines. As the leader in solutions to optimize coding accuracy prior to billing, Streamline Health is helping providers establish a new normal that improves their bottom line despite these challenging times. To discover how we can improve coding accuracy and financial performance for your organization, contact Streamline Health today.