Pamela Lewis Dolan

	Running a financially successful practice  depends on efficient revenue cycle management (RCM). RCM describes all of the steps involved in managing claims processing,  payment, and revenue generation, starting with patient scheduling and ending with payment. As practices face heavier workloads, many are evaluating whether to outsource these services.

	As physician compensation moves away from fee-for-service to shared savings and outcomes-based models, and practices embrace new team-based approaches to care, calculating what and to whom monies are owed is becoming a far more complex process. Many physicians are discovering that the talent and technology needed to get the job done correctly is beyond their current capabilities, or will cost more than what they are able to invest. The solution many are considering is outsourcing.

	Outsourced RCM can be as narrow as producing and sending billing statements or as large as the entire RCM cycle, says Robert Magnuson, MPA, principal advisor with Impact Advisors, a Naperville, Illinois-based healthcare consulting firm. Outsourcing aspects of the RCM cycle, or the entire process, could have a tremendous impact on a practice’s finances. On the other hand, if the wrong vendor is chosen or if the relationship is not properly managed, outsourcing RCM services could have a devastating impact.

	“The RCM cycle can only be as successful as the individual overseeing it,” says Christopher Parrella, JD, an attorney and consultant with the health law offices of Anthony C. Vitale in Miami.

	Before hiring an RCM vendor, physicians should go through what Magnuson calls the “discovery phase.” This is when practice leaders calculate the practice’s baseline performance for all RCM cycle metrics and identifies gaps or challenges. Physicians should then set objectives and goals for the practice.

	Key metrics to consider when evaluluating an RCM service are costs to collect (e.g. percentage of revenue needed to collect payments) and the return on that investment.

	Keep in mind, calculating cost to collect varies by practice, making it a difficult to benchmark, explains Jeffrey Milburn, MBA, CMPE, a healthcare consultant with the MGMA Health Care Consulting Group. Practice leaders should continually be looking for ways to reduce the cost to collect while moving its net collection rate as close to 100% as possible.

According to the report “MGMA Performances and Practices of Successful Medical Groups: 2013 Report Based on 2012 Data,” the median adjusted collection rate across all multispecialty practices is 96.02%. Better-performing practices have a median collection rate of 99.16%.

	If outsourcing all or part of the RCM process enables the practice to move into the better-performing range without increasing its cost to collect percentage, the return on investment is clear.

	In addition to increasing net revenue, RCM vendors can provide values such as fewer days in accounts receivable or managing contract negotiations with payers. Some can also conduct audits to ensure insurers are paying what they are contracted to pay.

	The best way for a practice to assess potential vendors is to make a list of everything it wants to know about potential vendors through a request for proposal (RFP) process, says Sandra Wolfskill, FHFMA, director of healthcare finance policy and revenue cycle MAP (measure, apply, perform) for the Healthcare Financial Management Association (HFMA). She recommends soliciting proposals from at least three or four to get a feel for the market.

	Some areas to assess during the RFP process:

	What is the cost and what do I get for that price? The cost of RCM outsourcing can vary significantly depending on the size and complexity of required services. Some charge monthly fees while others charge a percentage of the total amount collected. Two vendors may charge similar rates, but what is included in that price can vary.

	It’s important for the vendor to spell out everything included in its fees, and be transparent about the services it charges extra to provide.

	What are the performance guarantees? The potential vendor should explain how it will solve the problems the practice identified during its discovery phase and its success rate with previous clients.

	Some vendor proposals may include incentives for exceeding set goals, or penalties if goals are not met.

	What technology will the vendor provide and how will it interface with existing systems? RCM companies have economies of scale that allow them to offer a practice technology it would otherwise be unable to afford or maintain. But it should be clear from the outset what technology the vendor will supply and what will be expected from the practice, and how the vendor-supplied technology will interface with existing technology.

	Innovative vendors also will describe their plans for meeting the technical demands of coming mandates such as ICD-10 or emerging care models such asaccountable care organizations, Parrella says.

	Where are the call center employees located? A growing number of RCM companies employ people abroad, a fact that they should disclose, says Parrella.

	Practices should find out what the call center hours will be, the employees’ language skills, and their knowledge of local laws and regulations.

	How long is the contract? A practice may want to outsource RCM for only a short time to get through a growth or transition period, says Stephanie Davis, director of revenue cycle services for Halley Consulting Group, a physician practice management and consulting firm in Westerville, Ohio.

	If short-term contracts aren’t an option, the practice may lose money if it decides to terminate early.

	What are the termination clauses? Find out how the practice can get out of the contract if the vendor doesn’t hold up its end of the contract or what penalties, if any, will apply if the practice opts out of the contract early.

	Are employees certified and familiar with industry best practices?

	HFMA, the American Association of Healthcare Administrative Management and others set industry best practices  vendors should know. These organizations also certify RCM professionals, ensuring that clients have knowledgeable representatives working on their behalf.

	What security mechanisms are in place to deal with sensitive protected health information?

	As a business associate to the practice, the RCM company should be able to provide potential clients with risk assessments and explain what measures they take to remain compliant with the Health Insurance Portability and Accountability Act (HIPAA).

	What reporting is provided? The most effective way for a practice to assess its vendor’s performance is through reporting.

	Reports should be provided regularly-more frequently in the beginning of the relationship-that include, at minimum, an analysis of accounts receivable, the percentage of accounts in receivable for 60 days, 90 days or 120 days, and a breakdown of payers and providers with accounts in each category.

	The reports also should provide a breakdown of the who and why of denials, and the lag time between date of service and when bills are sent out.

	Where to and how often is money transferred? According to Milburn, some RCM vendors first collect on behalf of their clients, then send a check once a month, or they send the money to a lock box. Others post the collections in real-time via direct deposit.

	The way the RCM company handles this could affect a practice’s ability to meet its financial obligations.

	Once the questions are answered and the potential vendors are narrowed down to  two or three, one of the most crucial parts of the evaluation can take place: talking with and meeting current clients.

	Ideally, Magnuson says, the references should be a mix of clients the vendor landed within the past year and those they’ve had more than three years. The references should be able to share how their financial performances improved while working with  that vendor.

	The references should also be asked to share their experiences with implementation and talk about any surprises or unexpected events they encountered. Wolfskill recommends site visits to get a feel for the integration between practice and vendor.

	A barrier many practices face when deciding whether to outsource is the feeling of a loss of control. But that is the wrong way to view things, says Davis.

	“Even if you outsource the whole kit and caboodle, you still have to own it at the end of the day. And a lot of times that staff is going to be under your direct management,” she says. There are also aspects of RCM that will remain the responsibility of the practice, despite the outsourcing.

	The contract should state clearly the scope of services to be provided by the vendor and detail who touches what part of the process.

	The practice should also make clear how it expects the RCM company to conduct itself with patients and the tactics it can use, according to Magnuson.

	“The outsourced vendor can use anything allowed under the fair credit reporting act,” he says. If they use tactics the practice is uncomfortable with, the practice will be caught in the middle, causing a huge strain on the doctor-patient relationship.

	There should be a seamless transition between in-house employees and the RCM vendor’s employees, and patients should expect the same level of service from both.

	“At the end of the day, I feel like the best revenue cycle management service lines really act as an extension of your practice or organization,” says Davis. “To the patient, it doesn’t seem like they are calling yet another company or they are reaching out to someone who is not within the four walls of the practice.”

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	When conveying the severity of nicotine addiction, Elyse Carroll likes to tell the story of a former patient who, five days after coming off a ventilator and nearly dying, snuck outside the hospital doors, found a cigarette butt on the ground, lit it up, and smoked it. It takes 4 seconds for nicotine to enter the bloodstream, and the negative health outcomes can be life long.

	And while the challenges for patients in conquering the behavioral and physical addiction of smoking have been well documented, so too has its link to the third leading cause of death in the United States--

 (COPD). According to the COPD Foundation, the vast majority (90%) of people with COPD have smoked. COPD most often occurs in people 40 years of age and older who have a 

	The National Institutes of Health says approximately 12 million adults in the United States are diagnosed with COPD, and 120,000 die from it each year. An additional 12 million are thought to have the condition but remain undiagnosed. An estimated $37 billion is spent in the U.S. annually treating COPD, which is an umbrella term for lung diseases including emphysema, chronic bronchitis, refractory asthma, and some forms of bronchiectasis.

	Exacerbating the issue, says Carroll, a respiratory disease manager at Hospital for Special Care in New Britain, Connecticut, is the fact that the presence of COPD can actually make it harder to

	“Just think about when you have COPD and you can’t breathe,” Carroll explained. “When you can’t breathe, that causes you anxiety and stress. What’s a trigger to smoke? Anxiety and stress. One of the symptoms of their chronic disease is one of their triggers.”

	Because of its cost to society and the healthcare system overall, COPD is increasingly included in payer 

 that reward physicians for improved outcomes. Because of the association between smoking and COPD, efforts to reduce COPD rates and improve outcomes for those already diagnosed must include smoking cessation programs. And researchers have found that treating smoking like a

 is the most effective way to confront tobacco dependence and reduce the risks of COPD.




	The process of successfully quitting smoking is not dissimilar when compared with managing a chronic disease. In fact, the U.S. Public Health Service designated tobacco dependence a chronic condition in 2000 because it often requires repeated intervention and multiple attempts to quit successfully.

	“Tobacco dependence disorder is a chronic relapsing condition, yet treatment is delivered in discrete episodes of care that yield disappointing long-term quit rates,” wrote Anne Joseph, MD, MPH, professor of medicine at the University of Minnesota School of Medicine, coauthor of a 2011 study published in JAMA Internal Medicine that looked at chronic disease management for tobacco dependence.

	Joseph’s research found that a chronic disease approach-targeting the goal of quitting smoking but incorporating failures, setting interim goals, and continuing care until the desired outcome is achieved-is approximately 75% more effective than short-term, discrete approaches.

	Someone trying to quit smoking typically goes through relapses, much like chronic disease sufferers, according to Joseph. Instead of treating those relapses as the end of the journey to quit, physicians can help patients figure out the reasons for the relapses and ways they can address them, she says. And if they cannot completely quit, there are benefits to reducing the amount they smoke, she adds.

	When patients relapse, they feel like they failed, says Xavier Soler, MD, PhD, a member of the COPD Foundation Educational Review Working Group and an assistant professor of medicine in the division of pulmonary and critical care at the University of California San Diego. It’s up to physicians to show some compassion, he says.

	If someone comes to a doctor with a condition such as hypertension or diabetes, they are placed on medications, a diet, and/or an exercise regimen. If their condition isn’t controlled by the prescribed regimen, physicians don’t consider them a lost cause, says Soler.
	“You are going to say: ‘Let’s review why you went off the diet, or whatever the reason … and figure out what was not working,’ ” he says. The same approach should be taken with smoking cessation.



Implementing a chronic smoking cessation program


	There are many methods that can be used in smoking cessation, says Richard Novitch, MD, director of pulmonary rehabilitation, and the pulmonary function/blood Gas Laboratory at Burke Rehabilitation Hospital in White Plains, New York. Studies have found nicotine replacement therapy (NRT) can increase the likelihood of success for patients attempting to quit smoking. Novitch says some patients need only NRT, while others need to combine NRT with medications such as Bupropion Hcl or varenicline.

	The first step practices can take is to treat smoking status as a vital sign, Joseph says. Just like blood pressure and temperature are recorded for every patient, at every visit, so should smoking status. If they identify as a smoker, the next question should be whether they want to quit. Asking at every visit will also help physicians identify those who relapsed.

	The Affordable Care Act provided for the expansion of smoking cessation programs by requiring marketplace plans to cover them. For physicians, this means some smoking cessation treatments, including in-office counseling, will be reimbursed. However, there is a wide variation in the types of treatments that are covered and whether there is coverage for medications or NRTs.

	Carroll says many plans allow physicians  to bill for a 3- to 10-minute session or a session of more than 10 minutes. Many cover up to four sessions, twice a year.

	The first one to three months of a smoking cessation program is when the physical part of the addiction is addressed, says Carroll. This is when withdrawal symptoms are treated, usually with NRT and/or medication.

	An open dialogue with patients during these first few months will help physicians know what course to take and if it needs to be modified. For example, Novitch has often seen first quit attempts fail because of under-prescribing of NRT.

	After the physical addiction is addressed, the treatment moves toward the psychological and social issues. Identifying triggers and celebrating milestones are very important during this phase. Carroll says  patients who make it through a year have the best chances for long-term success.

	Joseph says that once a patient has expressed an interest in quitting, it remains on the table until they have succeeded, no matter how many failed attempts. Physicians should continue working with them and make modifications as needed, which may include the goals themselves. Some patients may need to focus on cigarette reduction instead of  quitting entirely. Joseph compares it to patients who fall off of a diet.

	“This doesn’t mean you now go out and binge eat,” Joseph says.




	Implementing a chronic smoking cessation program will require buy-in from everyone on the staff of a medical practice, says Paul Scalise, MD, senior vice president of medical affairs and chief of staff at the Hospital for Special Care.

	Often, the physician has only 15 minutes to see a patient so he or she can’t be the only one on staff committed to this, says Scalise. Medical technicians can start the discussion when they bring the patient in, he says. The same applies to the nurse, when taking the patient’s vital signs.

	Practices may consider hiring someone to facilitate counseling sessions or to conduct follow-up phone calls and outreach. Existing staff members can also be trained as smoking cessation counselors, Joseph says.

	There are also community-based resources to which physicians can refer patients. There are 1-800 quit lines in every state, says Novitch. In addition to counseling and support, many provide NRT starter kits free of charge. Also, local hospitals often host support groups that are free to patients. But, warns Joseph: “You can outsource so much that you lose the benefit.”

	Physicians may check a box saying he or she referred the patient to a 1-800 number, but fail to do any follow-up, Joseph says. Some patients might prefer getting treatment from a provider with whom they have a relationship. They may feel too distanced from their healthcare provider going to a program outside the practice.

	There’s benefit to proactive outreach, as well. “There’s good data to support the fact that there are people who are interested in quitting who don’t access services,” says Joseph.

	Most electronic health record systems allow smoking status to be recorded as discrete data. Using this data, population-based reports can be generated that list every patient who identified as a smoker. Joseph says she uses these reports to reach out to  the identified smokers to see if they want help quitting and to inform them of existing programs.

	Because so many COPD cases can be linked to smoking, “To ignore smoking is to ignore the fact that [COPD] even exists,”  says Scalise.

	After a patient has been diagnosed with COPD, his or her conditions are made worse if they continue to smoke, says Soler. Studies have shown those who quit live longer. This is increasingly important as physician payment models shift toward outcomes-based compensation.

	Reducing the number of smokers won’t mean physicians are less busy though, says Stephen Karbowitz, MD, director of the division of pulmonary medicine at New York Hospital Queens. Reducing the number of middle-age COPD patients will allow physicians more time to treat the older, sicker population, he says. Reducing the number of smokers “wouldn’t necessarily reduce costs, but would help to keep them from rising.”

	Novitch disagrees. He says savings could be realized almost immediately. One major source of savings would be the reduced visits to the emergency department, he says.

	“Smoking cessations is one of the most positive things we can do for patients’ health … and maybe our bottom lines,” says Novitch.

Why taking a chronic care approach to smoking cessation is an effective way to battle the third leading cause of death in the United States

Author | Pamela Lewis Dolan

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