A case for specialization by Arjun Seth – Senior Vice President, Implementation & Product Management
Who is the author? A pure operator with 10 years of healthcare payment integrity working for payers and 7 years of experience operating in provider revenue cycle. I’ve seen it from both sides, and it ain’t pretty! (P.S. started my career as a software developer, still recovering!)
Many hear “Revenue Cycle” and immediately translate to simply “collect the money,” nothing else. FALSE! Revenue Cycle Execs, VPs, Directors, and CBO Managers are responsible for so much more than just collecting the money. We ensure all areas starting with Registration/Access (including Authorizations), Clinical, Coding/HIM, Managed Care, and more are in sync, “firing on all cylinders” to ensure the best probability of getting paid (imagine that!) for services rendered by the time of DNFB.
Considering the amount of coordination required by a revenue cycle team for successful outcomes, let’s now layer in where 80-90% of dollars come from: commercial/group health, Medicare/Medicaid, and self-pay. There’s no need for anyone to explain where focus for the 70-hour+ workweeks is prioritized, as it should be.
All this leads to a logical adaptation: claim classes that don’t “move the needle” or make financial sense to focus are a distraction (WOW! I know, bold statement, stick with me). If experienced specialist partners exist and can bring an economy of scale to working the 7-10% “headache inducing” classes like Workers’ Comp, MVA/TPL, Dept. of Labor, even VA (on avg 8-20x amount of FTE for 70-100% of CMS…*gasp*) all the while replacing internal cost-to-collect with a net-positive alternative, providing uplifts and impacting general performance with cash increases…the decision to seek a partner becomes all the more enticing…a complex claims partner that is! Most importantly, that partner must provide you the trust that this small sliver is being handled efficiently and effectively via results and full transparency, so you can continue to dominate the 80-90% that rules your life already!
Actual scenario: a very well-known health system brought EnableComp on to support their overall annual GPR effort of $3.5B via carving out a complex claim class that makes up $50M of the $3.5B, = 1.67%. After 12 months of being live, we added an additional $22M (on top of the $50M) to the prior established baseline. In terms of percentages, it’s a small change. From an absolute dollar standpoint, HOLY COW – $22M IS HUGE! After recapping the 1st year results, that VP got an actual physical hug from the CFO.
Was this system failing at revenue cycle before us? ABSOLUTELY NOT. They were and are continually (and successfully) spending their focus/time/effort towards the biggest payer classes, as they should be doing. With hospital margins being in the low single digits, $22M can make or break an entire budget cycle. The impact/net benefit can be extremely favorable and fund deeper internal projects and expand focus to the bigger classes for the CBO.
Things I’ve overheard about using an external partner like EnableComp from revenue cycle shops:
- “Outsourcing is reflective of a failure to execute…”
- No way, the opposite is true: it’s a sign of executive leadership commanding an army to divide and conquer effectively! In order to truly make progress on anything in life, we must spend the bulk of our focus on the greatest ROIs. The same is true of revenue cycle: different leaders are hired to spend their entire focus in different areas: denials, government, underpayments, etc. We inherently organize teams in terms of specialties as 2nd nature.
- The mantra “jack of all trades, master of none” does apply to managing an effective revenue cycle: we can choose to focus on the big rocks, or spread focus thin across all areas, and the results speak for themselves.
- “This new HIS software can do it for us…”
- Being a former computer programmer by trade, software tools are exactly that, tools. A person must still configure them, customize, and operate them to extract real value. The most modern HIS systems still require managed care resources to code and constantly update fee schedules, and collectors to work the complex claim groups due to the manual processing required. Yes, it might be easier than the prior HIS, but significant work remains, and why divert focus and deal with this much hassle at all for 5-10% of the overall take?
- “CTC is higher using an external partner”
- Fully loaded cost-to-collect on paper can be very close to a partner’s rates, but the real magic occurs when the uplift is returned, covering all fees and then some – bringing the whole venture to net positive ROI!
- “I’m sure we do a great job already, it’s not a headache that I know of, and everything is hunky-dory…”
- Try EC’s no strings attached zero-balance review for free, you have nothing to lose and only additional recovered dollars to gain.
- “How can you do it better than us?”
- Simple – all we do is complex claims, providing services throughout the claim lifecycle (from authorization management to Day-1 billing, OpenAR clean ups, to zero-balance reviews).
- We bring an economy of scale via process, people, and technology to where our rates are beyond competitive to internal CTCs.
- EnableComp has collection experts with hundreds of years of combined experience, poured millions of $$ into building our proprietary software app making it the best tool imaginable, and staff legal experts/attorneys as needed to support our provider’s efforts including interacting constantly with relevant state agencies/legislatures/courts.
- Example: Our MVA and VA practice teams are directly led by attorneys with decades of rev cycle experience spending their full day collecting claims!
A simple and unspoken truth is payers are hoping and betting on the provider’s revenue cycle being spread thin resulting in uncontested short pays, unnoticed silent PPO discounts applied, uncontested zero-pays, and/or worked by those not skilled enough to successfully resolve.
Am I biased in any way? Absolutely, I work for a complex claims partner AND I used to work for the payers! YIKES!
Am I a realist? Yes! Look at the reasons above as to why considering a specialized revenue cycle partner makes all the more sense, especially with hospital margins continuing to be squeezed and reimbursements continuing to decline.
If you take one thing away from this article, this is it: Analyze what your focus is currently and weigh the facts on how you can glean more recoveries by doing less. An opportunity exists to increase cash recoveries by shifting “distraction” claim classes to an external partner and refocusing internal staff to the extremely high-return classes like commercial, simply by rethinking your approach.
Our partners who’ve done the same with EnableComp have seen the massively positive outcomes and have been able to truly turbocharge their performance to the tune of seven additional figures on average, by focusing on what is of significance (the 80-90%) and trusting us to cover the 7-10%. Results should speak for themselves, and 900+ hospitals have tapped EnableComp to be this trusted partner thus far.
I’ll be attending ANI in Orlando June 23-26 and am looking forward to seeing all my operators, colleagues, and friends. If I’ve piqued your interest and you’re still actually reading this (#1 you rock, #2 thank you for reading), check out what services we perform for our partners today at www.enablecomp.com.