For the federal government, the beginning of the 2013 fiscal
year is less than two weeks away. While most hospitals and health systems do
not run on the federal government's fiscal year, the end of September does
represent a turning point in the year.
For hospital CFOs, this may mean a few more months to hunker
down and go after several financial projects before the calendar flips to a new
year.
Tim Jodway is the CFO of Garden City (Mich.) Hospital. He's
been with the 323-bed hospital since June 2010 and has more than 23 years of
financial experience at other Michigan hospitals and auditing firms. Here, he
gives some basic projects he is currently focused on at the hospital and
explains why other healthcare CFOs should pay attention to them in the waning
days of 2012.
1. Meaningful use and electronic health records. The federal
government has given hospitals and other providers a major incentive to become
meaningful users of EHRs in the form of direct repayment. As of July 2012, CMS'
Medicare and Medicaid EHR Incentive Program has paid eligible hospitals and
professionals more than $6.5 billion in payments, and there is still money on
the table for hospitals that may be late to the party.
For Mr. Jodway, the meaningful use funds are not the only
reason health information technology is so important for hospital CFOs. EHRs
and other health IT initiatives are very expensive, and the CFO must ensure
those projects stay under budget.
"If you don't make wise decisions about health IT
hardware and infrastructure, you could easily spend an unlimited amount of
money," Mr. Jodway says.
2. Point-of-service collections. After health IT, Mr. Jodway
says the biggest area of concentration is the revenue cycle. Hospitals are
becoming much more cognizant of the potential revenue leakage in coding,
billing and collections, especially as budgets and reimbursements get tighter.
Point-of-service collections are of particular emphasis for
Mr. Jodway. He says when a patient comes into the hospital for an elective
procedure, both the patient and hospital should have an idea of what the
co-insurance, co-payments and other fiduciary responsibilities are.
Garden City Hospital is currently implementing software to
help with point-of-service collections. The software is based off data from
health insurers and the hospital's charges — eventually resulting in specific
costs for the patient upon arrival. "Getting the right data back from
insurance companies is the biggest challenge, and then integrating that with
our data is the next hurdle," Mr. Jodway says. "Our main goal is to
communicate to the patient what their responsibility-amount is."
3. Clinical documentation improvement. As Garden City
Hospital readies itself for ICD-10 — and the general trend toward greater
accountability — Mr. Jodway says the hospital has focused on improving its
clinical documentation through CDI specialists. Registered nurses, who are the
CDI specialists, are being trained on extensive documentation practices and are
ensuring there is no miscommunication between physicians and coders.
"Clinical documentation is going to be even more
important with ICD-10, as documentation from doctors on the floor will have to
support the correct DRG," Mr. Jodway says. "This involves some
software and a lot of training. The CDI nurses want doctors to document [their]
thinking."
4. Auditing efficiency. Medicare Recovery Auditors, or RACs,
have been cited as major administrative burdens for hospitals for the past
several years. In the second quarter of 2012, RAC activity continued to
increase, as roughly one-third of hospitals said they spent more than $25,000
managing their RAC process.
However, Mr. Jodway says Medicare RACs are not the only
auditing bugaboos. He says Garden City Hospital has also seen an increase in
claims denials from Medicaid HMOs. Most importantly, hospitals need to monitor
where auditing activity is coming from and make sure the process is as smooth
as possible, even though it may be a hassle.
"There hasn't been a huge amount of dollars we've had
to return. It's just the administrative burden of reviewing all these
records," Mr. Jodway says. "Every couple weeks, our HIM department is
always pulling records."
5. Innovative programs for the uninsured. Although the
Patient Protection and Affordable Care Act will greatly expand health coverage
to millions of Americans, that concept will not really start to materialize
until 2014. In addition, there will still be a sizable uninsured population
after the PPACA fully takes effect.
Mr. Jodway says Garden City Hospital is helping the uninsured
in a unique way. Uninsured and self-pay patients sometimes don't have the means
to pay for the entire cost of their care, and the hospital is able to write the
provided care off as charity care. However, the process is not easy for either
side. "Usually, a patient goes through the system, fills out charity care
paperwork, may or may not get a discount and may or may not pay," Mr.
Jodway says. "It's a hassle for both sides."
The hospital has used a concept called community assisting
pricing for a little while now. Essentially, the hospital sets a heavily
discounted fee schedule for uninsured patients. If the patient is able to pay
off the discounted price at the time of service, the bill is automatically
settled. While the hospital does not collect the full amount, some revenue is
better than none. "With this fee schedule, we say if you don't have
insurance, pay this amount, and you're good," Mr. Jodway says.
6. Physician engagement. Healthcare reform is putting
physicians, especially primary care physicians, at the forefront of the battle
lines. Mr. Jodway says hospital CFOs have to be a part of making sure the
physicians are integrated within the system. That job should not lie solely in
the lap of the CEO, CMO or other physician leaders.
7. Lean-based process improvement. Over the past decade,
Lean principles — which emphasize the preservation of value-based processes and
the elimination of wasteful byproducts — have become pillars of success for
hospitals. Mr. Jodway agrees, saying hospitals need to examine every process,
including things as simple as patient scheduling, to make sure efficiency
prevails. "Like most places, we have to get more efficient," Mr.
Jodway says. "For example, how can we reduce length of stay by cutting out
waste in the system?"
Source:beckershospitalreview
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