Conquering Revenue Cycle Challenges in Smaller Health Systems: One Organization’s Story

If there’s one area in which the leaders of so many patient care organizations, particularly those not richly resourced, continue to struggle, it is in the area of revenue cycle management (RCM). That certainly was true for the Kauai Region of the Hawaii Health Systems Corporation (HHSC), a public health system for the state. The Kauai region is based in Waimea on the island of Kauai. HHSC encompasses two critical access hospitals on the island. 

With the help of professionals from the Kansas City, Mo.-based Cerner (now Oracle Cerner), the HHSC leaders implemented Cerner CommunityWorksSM, a clinically driven RCM solution. Prior to implementation, staff had been constrained by manual tasks like charge capture, coding, and documentation. Post implementation, they experienced an improved focus on process and training, along with the engagement of an operational revenue cycle architect, helping HHSC Kauai Region’s leaders to increase their average daily revenue by 7 percent. What’s more, the average accounts receivable tally of greater than 90 days decreased by 12.6 percent, while payments increased by 61.7 percent and the clean claim rate (CCR) jumped from an overall 51 percent to approximately 87 percent. Meanwhile, gross A/R days also dropped by 8.8 percent.

At the time of the public announcement of those results late last year, Christine Asato, regional chief financial officer for HHSC Kauai Region, said in a statement that, “After moving to Cerner, our revenue increased while our volume during this same period decreased due to COVID-19. There are two main reasons for the increase in our revenue: 1) better charge capture from our electronic health record, and 2) an increase in swing bed utilization.”

Recently, Asato spoke with Healthcare Innovation Editor-in-Chief Mark Hagland about the challenges inherent in revenue cycle management for smaller patient care organizations like hers, and how they can be overcome. Below are excerpts from that interview.

Tell me about the timeline of developments in this implementation?

We went live on CommunityWorks (Oracle) in the clinics first. We have six clinics and an urgent care, and they went from paper to electronic on February 1, 2019. On July 1, 2019, we migrated from Soarian to Cerner Community Works. Within the first six months, our revenue increased by about 15 percent. And a lot of that increase occurred while volume was decreasing. We knew that something was going on. It was about the clinically driven revenue cycle and charge capture. While we were testing, Cerner kept emphasizing the concept of the clinically driven revenue cycle. We found out early on that you tie orders and tests, your documentation, you tie charges to documentation pieces through orders and tests. We were probably capturing more charges than ever before. It boggled my mind to know how much we hadn’t captured in the four or five years on the legacy system, because we had been manually capturing charges. You miss a lot. And when we presented the information to our board, it really grabbed people’s attention.

So we talk about this clinically driven revenue cycle. Often in the past when we talked to clinicians about reconciling charges, they would say, that’s a business-office process. So what we say instead is, can you check your documentation, can you check your midnight census review? So they’ll say, ‘Oh yes, we’ve got to do our midnight census review.’ They’re making sure that all orders are tied to the correct bed type. Also, we have them check tasks, such as non-completed tasks. So they make sure that the tasks that needed to be completed in the medical record—that when they do that, they’re checking their charges. A lot of charges are typed in tabs. So through those two key controls—the midnight census review, and uncompleted tasks. And the other element is managing our patient days, and volumes in general, to make sure they’re in line with the work and the service we’re providing. That’s what it means to work through a clinically driven process.

And the software assists you so that the processes are no longer manually driven?

Absolutely. The electronic medical record needs to help you meet quality measures and capture charges. When you can get it to work for you, everything comes into play. If you focus on documentation, and quality, then the icing on the cake is charges.

And you’ve calculated that you had been leaving 15 percent of your revenues on the table prior to this?

Yes, and perhaps even more.

What types of charges were involved that had been left on the table?

I’m an auditor by trade, so I dug into that. And one area of big increase was in the emergency room. With supplies, we started to scan everything. The EMR helps us automate. When you tie devices and move to barcode-based scanning and move away from the old sticker system—that was a hot mess. So we were scanning our supplies, and that helped us; but we saw a big increase in two areas—the ED and the OR.

In the ED and OR, which types of charges were involved?

For the OR, we were able to create pick lists and preference cards established for each provider. A lot of it is that devices weren’t properly accounted for. In the ED it was definitely supplies; but I think the documentation that’s required in the ED helps—if you didn’t document it, you might not be able to charge for a level 4 visit or a level 5 visit. We were able to capture more information to bill for levels 4 and 5, where we had been billing 2 and 3. We have the highest level of diabetics per capita in our area. In laymen’s terms, it’s the problem list: what kinds of problems did a particular patient have? And if it it’s not documented, it didn’t exist. We were able to achieve way better documentation in the ED, scanning supplies. And documenting elements like EKG reads, with everything on one platform. Better documentation gets us to the level we should have been recordings.

Was the biggest implementational challenge guiding clinicians through the changes?

I would separate the challenges between inpatient and outpatient. In the hospital, the biggest challenge was relearning the new EMR; we had migrated from one EMR to another. And often, you try to put that round peg into the square hole; so they’re taking their previous knowledge of the old system and trying to apply it to the new system. So the biggest hurdle was to have to explain to them, pretend you were never on an EMR before. It took a lot of training and education. So one of our biggest wins was that, by flow-charting everything, so we could explain to them—when we started to have these interdisciplinary workshops where we would flow-chart every action people took, and would explain, so, when you don’t do this, the medication won’t be scanned—the light when on. So that helped people understand why they needed to do things and when.

On the ambulatory clinic side—you can set things up so the system works for you. One of our providers who flew over from Oahu said, you want to do it the ‘long-short’ way, meaning, invest in time up front. In the clinic setting, it’s high volume for the same processes over and over and over. And clinicians don’t like the phrase ‘mass production’; but in the coding and billing world, it’s the same thing over and over. We have physicians who are going home an hour-and-a-half earlier through creating order sets that make sense in terms of how they practice. But you have to set things up. And if you only set up your phone for basic calls and don’t program anyone’s phone number in your address book, it makes it clunky. But if you set up your phone for efficiency—it’s the same thing in the EMR. You want to set things up for your workflow and your order sets being built then you’re click-click-clicking your documentation into the chart.

You’ve achieved improved physician satisfaction, too, then?

Among certain physicians, yes. Some of the strategy: you want to corral everybody and have everybody to experience that win. And you put as many controls in place, and as much energy and effort as possible. And what happened is that we had a few providers who very early on, caught on, and were successful. Then you had a second wave of providers discovering the new ways. And now we’re actually in our third wave in getting newer providers who have arrived, or providers who are dissatisfied with the old ways of working, signing on. We have to have the processes in place; but again, it really comes from the provider saying, I want things to be easier for me; and everybody will reach there at a different point.

What advice would you like to share, based on the lessons learned in your organization’s journey in this area so far?

I would say that the people side of the workflow is the most important part of it. You’ve got to be able to connect the dots for people; you’ve got to be able to explain the why. If you can’t explain the why, the what, when, and how won’t matter. People need to know why they need to do something. A lot of times in IT, we say, hey, here’s an EMR, please use it. But if they don’t understand the why and cannot connect the dots into how this will benefit them, it’s unused and untapped, and we have capacity issues around, are we fully utilizing our system?

Is there anything else you’d like to add?

For healthcare, technology is the wave of the future. We saw that during the pandemic. My theme for 2023 is going to be automation: what else can we automate? So I’m really challenging our IT team and clinicians, and am challenging administration, to really to take a look at what we’re still doing manually, and how we can automate it. I really want our patients to start scheduling their appointments through the portal. What about kiosk implementation? What can we automate to make things more streamlined, more efficient, and more effective? Because you can’t get effectiveness without efficiency. I’m really challenging everyone here in that area. And we need to challenge the industry and technology to see how it can support us in an automated way.