Sustaining Financial Performance When Onboarding an Integrated Health Information System

HFMA Executive Roundtable

To ensure compliance with mandates and improve operational efficiency, many hospitals and health systems are implementing or re-implementing health information systems (HIS) that integrate clinical and financial functions. When organizations move to these kinds of systems, they can experience significant financial disruptions. Sometimes these are temporary, but other times they are more long-term and reflect a loss in key functionality. To avoid common pitfalls and facilitate the transition, many organizations create a robust financial data strategy that safeguards performance before, during, and after go-live. In the following roundtable, sponsored by Craneware, several senior financial leaders share their strategies for sustaining financial performance amid an evolving information technology (IT) environment.

What functionality gaps have you found when reviewing your HIS that adversely affect your revenue cycle and financial processes? What strategies are you using to overcome these challenges?

Scott Hawig: When you have a financial and clinical system housed within the same piece of software, there are some distinct advantages: smoother workflows and work queues, reconciliation of total accounts, and the ability to drive alerts and provide feedback to physicians—to name a few. One downside that we’ve seen, however, is the lack of a native data warehouse to support the financial system. This has made reporting more cumbersome. Ideally, an integrated product should offer an integrated database to join tables and extract data from both the clinical and financial sides of the software. The good news is that the larger system vendors are starting to examine this issue after receiving pressure from the market to enhance their data warehousing capabilities.

In the meantime, Froedtert Health has purchased off-the-shelf data warehousing tools. Although many have high functionality, there is the challenge of interfacing them with the larger HIS solution. This requires additional work and spend for the technology, as well as more people and dedicated processes to support it. There is also a bit of a time lag in generating reports and some degree of duplicative data.

Terrie Handy: It’s been seven years since Legacy Health first implemented our HIS that houses both clinical and financial components. Before that initial project, and for every system conversion or upgrade since, we have attempted to mitigate gaps prior to go-live. The key is to pinpoint potential problems early and pull decision-makers and stakeholders together to work on a solution. You certainly don’t want to wait until after the technology is up and running to identify a glaring hole, because then you are just playing catch-up.

One specific area we focused on was charge capture. Even prior to the cut-over, we started monitoring revenue for all the service lines. From laboratory to physical therapy or room charges to surgical procedures, we developed a baseline prior to conversion. After go-live, we deployed our revenue-integrity nurse auditors and analysts to monitor revenue—reviewing charges, documentation, and systematic workflows to make sure that there were not any gaps. We also implemented daily revenue reports, which are sent to each service line indicating revenue variance from the daily average. Departments are required to provide an explanation for variances, ensuring ownership of their charges and revenue.

Jeff Porter: University of Pittsburgh Medical Center (UPMC) is not on an enterprise system, so we have a different electronic health record in our hospital environment versus our physician practice environment. We also have two separate revenue cycle systems. One of our challenges is how we effectively interface our revenue cycle solutions so that our customers—our patients—view their communications with us as coming from one UPMC system as opposed to various departments. In other words, when they receive a bill, a statement, or a cost estimate, it incorporates data from all the various technology solutions, and patients don’t perceive a difference.

Having multiple systems provides some challenges related to staff training. To get past this hurdle, we’ve spent a good deal of time refining our staff training and education program. For example, we’ve partnered with our human resources teams to centralize the training, recruitment, and placement functions with all our front desk staff across 600 of our locations to ensure all staff members are trained in the same way on the same systems. As a result, we can leverage our staffing across the different hospitals and physician practices, knowing that every staff member is comfortable servicing patients in either type of location.

Sean Waugh: Ideally, every organization would like to find a single HIS that incorporates all the features and functions the organization needs. Unfortunately, that’s not very realistic. Over the years, organizations have added various “fixes” and “bolt-ons” to their existing HIS, and they’ve often customized their current technology to where it “works.” There’s value to something just working—and knowing what does not. When converting HIS, organizations need to perform a gap analysis on functionality and investigate the customization they have done to make sure any new systems can handle things from day one. Moving from a system of exceptions to something more standardized can be difficult and ultimately result in a series of trade-offs. It’s also important to investigate what is duplicative from your legacy systems while moving to a new system. Equally important is to look deeper to see if the standard solution is going to give you the functionality you need. There are still clinical, financial, and reporting solutions that have better functionality and can integrate well. A new HIS should allow you to limit the interfaces with more standard options and have ancillary modules that fit together well. Even in this scenario, it can be a challenge to get at your data for reporting and analytics. Resources in these areas should not be overlooked because they are one of the most utilized, especially after a conversion, to help monitor the organization’s financial health. In the end, organizations must figure out what their priorities are in creating a system of solutions and processes that is going to work well.

What are the top challenges an organization might face post-HIS conversion?

Hawig: Any time you go from an old technology system to a new one, you have to liquidate the old system and then get the new system running in a productive, efficient manner. This can be a challenge. You need the cash that gets liquidated from the old system, but at the same time you’ve got this new system turned on, and you’ve spent a year setting it up and training staff on how to use it. At the very least, you need to keep their skills current. If you focus on slowly liquidating the old system first, the staff’s skills on the new system may get stale. Also, by not working the new system, are you setting yourself up for pitfalls? Perhaps incurring backlog on day one?

There are also reporting challenges. With financial operations, there are many long-standing metrics to report—A/R days, net collection rates, bad debt rates, percent of charity care, and so on. You may have strong revenue cycle dashboards in your old system, but they may not necessarily translate well to the new technology. You may be missing key metrics, or the definitions for the metrics may be different. Generally speaking, these new systems have the potential to capture more detail—at least as it relates to clinical issues within the financial system—but it takes a while to read and understand the new reports. Plus, there is the issue of what to report when. As the old system is winding down and the new system is ramping up, do you have a report or a dashboard that adds both together? Do you have transparency? Is it intuitive?

Margaret Schuler: OhioHealth recently implemented a brand-new HIS across seven hospitals, more than 300 physician practices, and several other facilities. After talking with our peers across the country who had onboarded this type of solution, we discovered there were numerous risk areas we wanted to avoid. First and foremost, we concentrated on gross revenue and charge capture. Prior to go-live, we established our baseline revenue down to the department level by facility. We then did comprehensive charge testing, checking that all charges were appropriate for the particular cost center and that revenue was being captured correctly. At go-live, we had daily meetings in each department where we compared the baseline to current performance. If a department was in the “red” for at least two weeks—meaning it wasn’t up to its baseline level—the department worked with our charge command center to figure out what the issues were and why the department was in the red. Our target was that every department would be back to baseline within 14 days of go-live. Each of our hospitals achieved this goal in 10 days, if not less.

Another area we worked on was discharged not final billed (DNFB). Many of our peers had seen that skyrocket, and we did not want that to happen to us. Again, we did substantial up-front work. We have work queues that are owned by various stakeholders—clinical teams, coding teams, revenue cycle teams, and so on. We made sure that everyone knew who owned what work, and there was clear accountability for DNFB. In addition, we had intense focus after go-live. There were daily meetings that turned into weekly meetings once we were at our target.

We also did claims testing. Prior to implementation, we tested a day’s worth of claims from each hospital. We didn’t shortchange ourselves there. There are some HIS vendors that want to install quickly, and they can sometimes take shortcuts—typically on testing. That strategy will haunt you in the end. We learned a lot during testing, and it helped us mitigate risk. During this exercise, we built edits up front within the HIS rather than having everything run through the claims-management system.

One area where we struggled was initial denials. When you migrate to a new HIS, the data are no longer episodic but longitudinal. Although this benefits patients and providers because they can see across the care continuum, payers are more interested in the specific episode when they’re granting authorization. You must make sure your system is only extracting the clinical data your payers want because they’re not going to read a 200- to 500-page document. So, as you are implementing an integrated system, you want to have a strong relationship with your payers so you can function-test information-sharing ahead of time to make sure the data meets their expectations.

When you bring new facilities or physician practices into your network through purchases, mergers, or consolidation, what is your conversion process for financial systems? How do you mitigate or avoid revenue cycle and financial disruptions during the transition?

Handy: As we begin conversations about possible mergers and acquisitions, there is almost always a commitment to migrate and move to our standard HIS. As we onboard a new facility, we deploy our standard protocol to work together with that organization. We include their key stakeholders early on to show them how the system operates, so they have a sense of their new world and future system efficiencies. We also deploy standard training for new workflows and processes. The organization being acquired may be shifting from using multiple systems to generate charges or a claim to one. The training must ensure everyone understands the new operational workflows and outputs, not just the technical system process, so we don’t miss anything.

Our model also includes robust testing at the integrated level to make sure everything from the front-end to the back-end flows smoothly. We basically follow the life of a claim where we build different scenarios for various revenue cycle operations and test to be sure each element in the account cycle is working appropriately prior to go-live.

Schuler: Right now, we work with new physician practices more frequently than hospitals, and the process for doing it is almost routine. It’s basically a checklist and a slimmed-down version of our original big bang go-live playbook. The staff coming from the newly acquired practice integrate directly into our operations, so they’re working alongside people who are already familiar with our HIS. We avoid financial risk through the implementation of the standard workflows, build/design, and training/education programs.

Porter: UPMC has a dedicated team that does this type of work. Called the Implementation Optimization and Training (IOT) team, they manage the deployment of new technologies, performing detailed assessments of all the processes, people, and technologies, and managing the training program. For the assessment, they follow a checklist to walk through everything from the process for registering a patient to how to generate a bill for patient services. They make sure that the entity being acquired fits well within our current operations, and where there is a disconnect, they work to resolve it.

Waugh: Because there is a different skill set when it comes to managing hospital financial operations and physician practice operations, onboarding a new physician practice to a predominately hospital system can be difficult. You will want to have staff in place who fully understands the two operational areas. Without knowledge of both sides, you can put your organization at financial risk.

Are there key performance indicators you would recommend to measure the success of an HIS conversion?

Handy: I recommend monitoring all key performance indicators (KPIs), from point-of-service metrics to A/R days to DNFB. At go-live, make sure your documentation and charges are flowing, and coding is accurate, complete, and timely. Once bills are released, it is imperative to analyze payer reimbursement and denials, comparing actual to expected reimbursement. We have a daily dashboard for all our facilities, which we monitor closely. With each new facility we bring on, we develop a unique dashboard for them as well.

Hawig: I would say a best practice is to use a KPI tool like HFMA’s MAP App. Not only does this optimize reporting by standardizing metric definitions, it allows for robust benchmarking. The tool has an exhaustive list of KPIs, including ones related to registration, charge integrity, collections, and billing. By participating in MAP App before and after go-live, you can easily see variations in internal performance and also compare that to your peers. As you onboard new facilities, you can enroll them in MAP App as well, so they can immediately compare performance.

What lessons learned would you offer other healthcare organizations that are implementing an HIS and its associated financial and revenue cycle systems?

Hawig: Implementing an integrated system is not easy, but the project tends to go best when you take time to analyze, study, assess, and redesign your processes. Your previous solution was probably just a financial system, and now you are moving to a combined clinical and financial product—and things are going to be different. Take this opportunity to rethink processes and workflows to maximize the new technology and ensure you get the results you want.

Also, for those organizations looking to shift to a Meaningful Use-certified system, the temptation might be to rush the effort to meet the upcoming deadline. However, you should be thoughtful about all the changes you’re making. Otherwise, you may turn the system on and encounter problems, or you may have to work backward and redesign everybody’s job to fit what you just turned on. Either way, it’s messy.

Schuler: I agree. Prior to go-live, you should spend time figuring out where your gaps are and make sure you don’t replicate those. You’re getting an opportunity—a gift, if you will—of a new HIS and a fresh start. You certainly don’t want to repeat your old bad habits.

Handy: It’s also important to remember that implementing an HIS is not merely an IT install. It should be a multidisciplinary effort where finance, revenue cycle, clinical operations, and IT are all invested, engaged, and on board with the HIS project. Oftentimes, the revenue cycle division may get overlooked, and I have heard of other organizations that have had major conversion challenges as a result of not having revenue cycle at the table for critical go-live planning. Fortunately, this has not occurred at Legacy Health.

Porter: You also must have strong communication channels. A lot of the work you do will affect others in the organization—clinical leaders, business units, the IT department, etc. You must have systems in place that foster strong, interactive, and rapid dialogue and problem-solving.

Schuler: For many of us, we are now shifting our attention from initial implementation to continuous process improvement—and maintaining the momentum can be tough. There is tremendous energy and passion around go-live. The hard part is sustaining that enthusiasm, diligence, and discipline as you continue to support the system. Optimizing your HIS is not a one-time effort. You must be committed to continuously monitoring, enhancing, and getting the most out of your system.

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Participants in the HFMA Executive Roundtable

Terrie Handy is vice president, revenue cycle operations for Legacy Health in Portland, Ore.

Scott Hawig is executive vice president, CFO, and treasurer for Froedtert Health in Milwaukee.

Jeff Porter is chief revenue cycle officer for University of Pittsburgh Medical Center in Pittsburgh.

Margaret Schuler is system vice president of revenue cycle for OhioHealth in Columbus, Ohio.

Sean Waugh is vice president, data integrity for Craneware in Atlanta.

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About Craneware

Craneware (AIM: CRW.L) is the market leader in software and supporting services that help healthcare providers improve margins so they can invest in quality patient outcomes. Founded in May 1999, the company’s flagship solution, Chargemaster Toolkit®, quickly rose to prominence in the industry, earning the KLAS No.1 ranking in Chargemaster Management in 2006, an honor it has continued to earn in each of the 11 years since (2006–2017).

Craneware’s value cycle management suite includes patient engagement, charge capture and pricing, coding integrity, revenue recovery and retention, and cost analytics solutions. These SaaS solutions identify and address risks related to revenue and cost. Learn more at craneware.com.