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Article No.: 08-6

Article Title: People, Process, and Patience. . . A Story of Success

Author: Guest Columnist Shari Bailey, SPHR, Verite Healthcare Consulting

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Early in 2007, our healthcare revenue cycle team was challenged to move from an operation where most financial tasks were completed after the clinical service to a model where financial procedures are completed before the clinical service.  We are a large multi-facility healthcare system, so this was not going to be an easy task.   In addition, we were struggling with a high turnover rate in our admitting areas.  We identified three objectives, which would result from the operational change:

  • Improve patient satisfaction with the financial experience for healthcare services
  • Enhance efficiency and quality of accounts receivable processing
  • Increase net revenue and accelerate cash flow

We outlined the strategy to implement our new operational model:

  • Define key focus areas
  • Identify pain points
  • Establish measurable success criteria
  • Create human resources strategy

Our key focus areas were defined:

  • Provide an increased level of patient financial assistance for self pay patients by qualifying them for Medicaid and charity care at admission
  • Initiate financial planning with patients pre-service to improve patient collections at the time of service
  • Develop career pathway with defined employee growth opportunities within the patient financial services department

Progress in these focus areas would result in improved patient satisfaction, reduction of bad debt expense and increased net revenue.  We reviewed our key focus areas, evaluated pain points, and converted them into measurable strategic goals:

Manual financial assistance process Increase number of financial applications by 100%
9.8% increase in self pay Find third party coverage for 10% of self-pay patients
Bad debt trending upward Improve Point of Service Collections to 1.0% of net revenue

Making it happen:

  • Need to take a “Leap of Faith”
  • Moving from a reactive management style to a proactive style would improve the bottom line of the organization.
  • Current reactive management style was not going to help us meet our goals
  • We needed to make significant changes in the skill sets of our human resources, change  the way we thought about process flow, and purchase technology to have the right formula to “make it happen”.

Investment in People, Technology and Process change are needed for success   

 Goal 1:

 Increase number of financial applications by 100%.  To identify more patients eligible for financial assistance, we created the following actions:

  •  Improve the quality of information on the applications,
  • Conduct more face-to-face meetings with more self pay patients,
  • Identify charity-eligible patients at the time of service, and
  • Accelerate the timeline to complete financial applications

Current financial counselor positions in the clinical areas were responsible for:

  •  Collecting applications,
  • Conducting follow-up, and
  •  Processing applications for Medicaid and charity care

The operating schedule for financial counseling was 8 am to 8 pm, weekdays only.  Studies were conducted, and we learned that 30% of the self-pay patients accessed healthcare in the Emergency Department after financial counseling operational hours. 
Strategy:  We decided to change the positions in the clinical areas to patient financial advocate positions, instead of the customary financial counseling positions.  The primary focus of the new role would be to conduct as many face-to-face financial interviews with patients as possible, including the under-insured patients.  In addition, the new patient financial advocates were cross-trained on registration tasks to assist in peak times, and improve customer service. Technology was added to create an electronic application, ensuring all necessary questions were asked.   High performing registrars were promoted to patient financial advocates to provide more coverage during the later and weekend hours.  Application follow-up and processing would be primary function of the financial counselors at the centralized business office.  Current incumbents of financial counseling jobs were considered for the business office positions.  Job descriptions for patient financial advocates in the clinical areas were created with new accountabilities and competencies.  These positions were evaluated for compensation grade, and were one grade higher than the registrar, and four grades lower than the financial counselor (due to reduced education requirements and level of complexity of the new position).   Those employees not selected for financial counseling positions were red lined in patient financial advocate positions.

 Goal 2: 

Increase POS collections to 1% of net revenue. In the current state:

  •  Registrars were not held accountable for collecting co-pays, co-ins or deductibles from patients.
  • We were achieving moderate success with the initiative which started two years ago.
  • Collection/financial skills were not essential competencies in job descriptions.
  • Registrars struggled with knowing how much to request from patients, and weren’t comfortable asking for money.

We found resistance to adding financial competencies to the job descriptions in the admitting areas, as well as in the clinical areas.  The mission of the hospital was to serve the poor and underserved population, so everyone questioned how requesting payment for services could support our mission. In addition, the emergency department was cautious about implementation because of the EMTALA regulation. 
Human Resources Strategy:  The first step was to engage the hospital executive leadership for sponsorship of the project.  They created a message for all hospital staff:

  •  All employees would be held accountable for this initiative
  • Bad debt losses from 2006 could not continue
  • Increasing number of self pay patients were being admitted
  • We needed to improve our net revenue in order to continue our mission

The staggering figures around these losses were convincing to everyone that we needed to act in order to continue to support the mission. The executive leadership supported the policy and operational changes.  Job descriptions were updated to include financial competencies.  Training programs were developed to include effective communication skills that were supportive of our mission.  We showed our employees through presentations and role-playing, how to be welcoming, professional, and project confidence in requesting payment. After training and implementation, employees were evaluated for financial competencies in their new job descriptions, and some were found to be deficient and were deselected.
We researched EMTALA, the regulation for emergency rooms that prohibits delaying care in order to conduct financial conversations. Patients who present to the emergency room should receive a medical screening exam to determine urgency of care prior to completion of the financial paperwork.  We obtained a legal opinion from a national expert.  We educated registration, physicians and clinical staff on timing and importance of appropriate financial conversations in the emergency department.  Role-playing, written policies and scripts were essential components. 
We created five new positions in the central business office to conduct financial planning conversations with patients on the phone, prior to the service.  Patient deposits (co-pay, co-ins, and deductible) were calculated based on insurance benefits and contracts.  Letters were created to confirm patient financial responsibility. Registrars received an electronic copy of letter, which was included in the patient admission file.  These new positions (patient financial advocate II) were graded for compensation one level higher than the patient financial advocate I in the clinical areas.
We generated enthusiasm for the initiative by creating games (Amazing Race, for example) and competitions among clinical areas.  We rewarded and recognized those who excelled.  Teams were created to promote working together and supporting each other.  Daily, weekly, and monthly reporting of progress also kept the staff motivated for success.  We realized success in 2007 and exceeded our goal with $2.4M increase in POS collections.  Celebrations such as lunch with the CFO were held and attended by executive leadership.  Prizes included restaurant and gas gift cards, and Cincinnati Reds tickets.

 Goal 3:

 Finding coverage.  Current state:

  • Registrars were not held accountable for finding third party coverage   when the patient presented for services.
  • Registrars did not receive feedback on the quality of their registrations for eligibility.
  • Errors created more work for patient accounting staff after the patient visit, and delayed claims payment.

Strategy:  New technology was purchased to provide more accurate eligibility information in easy to read format.  Efficiencies would be gained by changing the process to include exception monitoring (reviewing accounts with errors), instead of reviewing all accounts.  Registrars were trained on:

  • Interpreting eligibility responses,
  •  Importance of correct eligibility at the time of registration, and
  •  Impact they could make on our ability to achieve our goals.

Admitting managers and registration clerks were given daily work-lists of accounts with eligibility errors.   Charts and summary reports were created and distributed daily.  The workload for these employees increased by at least 30% during this period of transition, and temporary resources from other departments were provided to help. It was a struggle to keep everyone, including high performing managers, motivated and supportive during this intense period of increased workload.  It was crucial that the message from leadership was positive, not one that pointed out the lengthy error filled work-lists every day.  The message was “we now know what we didn’t know before- do as much as you can today and try again tomorrow.  And thank you for your efforts, we appreciate it!  It will be worth the effort.”  We visited the registrars at each admitting point and cheered about the progress being made.  By changing the process so that the admitting staff corrected their mistakes daily, the quality of registrations improved at the time of service. By July 2007, we realized a 17% decrease in self-pay patients at registration because third party coverage was identified, and the commercial accounts with registration errors (27% of registrations) were corrected before the claim was submitted to the insurance.  Two months later, the exception work-lists were reduced to a manageable level every day. Staffing levels were converted back to original levels. Investment:  technology, 30% increased staffing levels for two months, sweat and tears.


  •  Net revenue increased by $5.7M in 2007.  (We invested $800,000 in staffing and technology and realized $4.9 M return on investment).
  •  Point of service collections increased by $2.4 M,
  •  Post service collections increased $1.3 M, and
  •  We realized a $1.8 M increase in Medicaid payments over 2006.

All of the strategic goals were met:

  • We identified coverage for 17% of self pay patients,
  •  1500 more Medicaid applications were completed at the time of service (100% improvement),
  •  POS collections improved to 1.0% of net revenue, and
  •  Bad debt decreased .5%, where the industry norm is continual increase.

In addition, we created career paths for patient financial services, in order to retain our high performing employees, and provide professional growth opportunities.  The CEO of the technology vendor asked how we were able to achieve these results with their product, as others have not realized such dramatic results.  My response was that human resources redesign, training, motivation and strategy was an essential component to our financial success in 2007.

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