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Revenue Cycle Management and EHRs


By Ron Sterling

Evolving payment mechanisms, such as Accountable Care Organizations and Shared Savings Models, are changing the Revenue Cycle Management (RCM) focus from encounter notes to a variety of other measures to justify billing and prove that quality measures are being met. Electronic Health Records (EHRs) are dramatically changing the nature of patient documentation, which is subsequently altering the methods used for determining service billing and proving support for other payor arrangements.

From the timing of daily clinical activities to processing payments, EHRs can be a powerful tool to facilitate billing and collections under both the fee-for-service model and newer payment arrangements. On the other hand, ineffective use of EHRs can distort services and complicate payor relations (and collections) for services that your clients provide under the evolving payment mechanisms.

Unfortunately, your clients are dealing with a moving target: currently, the vast majority of income is based on fee-for-service charges supported by encounter notes, but new payment strategies will be based on a variety of performance measures and activities that are not part of the current RCM model. For example, future payment mechanisms may include meeting standards for replying to patient queries, servicing patients through web portals, and the percentage of patients who meet the physician-designed treatment plan. Indeed, the value of your billing services may depend on helping your clients measure these factors and reconciling payments to other variables instead of CPT-based charge transactions. For example:

Your clients may be paid for evisits, which produce billable events from a series of messages through the patient portal. Additionally, they may be paid for follow-up activities of the practice that could include a prescription, appointment with a specialist, or another factor.

Maintaining appropriate patient contact and follow-up on treatment plan items may require timely documentation of practice efforts as well as managing the full lifecycle of patient activities to assure patient wellness or compliance. In addition to some of the Meaningful Use measures such as reminders and patient messages, the practice may need to ensure that the correct status is tracked for all outstanding treatment items, including recommended procedures, consultations, wellness monitoring, and periodic tests. Your clients may have to monitor fluctuations to these plans triggered by changes to patient conditions and even patient refusal for treatment.

Practice clients may receive payments for monitoring subjective and objective patient information that is gathered from remote patient monitoring devices as well as patient surveys and event reporting via smartphone applications and specific healthcare-oriented devices. Practices will need to design their operations to monitor collection and track patient results to qualify for payment.

Payments may be based on performance standards and providing patient services that may not have a bill but generate practice revenues in other ways. Indeed, performance-based payments may depend on timely management of patients and tracking of issues on literally a daily basis, every day. Failure to meet daily performance issues may put a performance payment at risk.

Dealing with performance-based measures will be challenging from an operational perspective and can complicate the relationship between services and payments. For example, how will a lump sum payment for meeting performance standards be applied to revenue for realization tracking and profit assignments?

The solution to these challenges is to design a method to execute and track performance of these evolving payment measures. Consider the following strategy:

Evaluate requirements: For each new payment arrangement, the practice should evaluate the performance requirement. In some cases, the requirements will be high-level issues, such as patients requiring hospitalization, while other requirements may set a response time for a patient query over the patient portal.

Design operational methods to meet requirements and track performance: Each requirement should be mapped to various features in the EHR. For example, the practice may need to establish a daily check on the time needed to answer a patient question or verify that patients received a call within four hours after returning home from a procedure. Note that the key issue will be to record information in the EHR that can be used to report on and track compliance with the required standard.

Monitor performance on a periodic basis: The practice will need a midday, daily, and weekly checklist to monitor the various performance measures needed for the payable measures. Failure to track performance will only result in surprises and lost revenues.

Assign payments based on design: The practice will have to decide how to post appropriate payments for profit tracking and management purposes. Note that payment assignments may require a different management strategy and tools. For example, a clinical call center may be used as a profit center to meet a number of performance issues as well as free up providers to spend more time serving patients in the office.

The key issue for third-party billers is how to guide your clients through this transition and provide added value to these evolving payment mechanisms and standards. In the final analysis, your clients will be dealing with new requirements that may have cost-effective solutions and increase profits. On the other hand, the new requirements may be inappropriately addressed with traditional fee-for-service strategies. Your ability to design new mechanisms using EHR systems in creative ways, backed by progressive financial management tools, may make the difference to your clients and your billing service.

Ron Sterling (800-967-3028, publishes the popular EHR Blog He also authored the HIMSS Book of the Year Award–winning Keys to EMR/EHR Success. He is a nationally recognized thought leader on EHRs.

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