The Healthcare Hub

Revenue Integrity: The importance of the EHR

Thursday, April 26, 2018

The 2017 annual survey of hospital CEOs conducted by the American College of Healthcare Executives revealed that financial challenges was their number one concern. Healthcare providers and executives are still trying to grapple with the shift of healthcare from a fee-for-service to a value-based model. As a result of this shift, there has been a marked decline in reimbursement from the government as well as private insurance groups.

As part of the adjustment to the value-based model, and in keeping with the regulations established by the Affordable Care Act, healthcare organizations have invested millions of dollars in Electronic Health Records (EHR). However, a recent 2017 study by Healthcare Financial Management Association (HFMA) / Navigant showed that several of these organizations are yet to see tangible financial benefits from the EHR conversion. 

One of the reasons that healthcare organizations are not experiencing the expected financial growth following an EHR conversion is revenue leakage due to the lack of reimbursement for medical services provided. Some of the contributors to this type of revenue leakage include poor clinical documentation, inaccurate coding, and missing charges all of which can — at least in part — be traced back to weak data. Charge capture problems can cost up 1% of annual net revenue. For a hospital generating $650 million per year this could mean $6.5 million of it could leak in missing charges. Obviously, revenue leakage can damage a healthcare organization financially in the long run if not addressed and corrected.

To address the issue of revenue leakage, healthcare organizations have instituted revenue integrity throughout their system. Revenue integrity is a key element to revenue maximization in a healthcare organization and also to enable a rapid return to profitability following the investment in an EHR.

What is revenue integrity

Revenue integrity is a process that ensures that charges are captured appropriately; it also ensures that medical diagnoses are coded accurately. It offers providers the ability to track medical care provided at a granular level to make sure they are properly billed. Through revenue integrity, healthcare organizations are also able to accurately monitor their profit margins.

Revenue integrity is not the same as revenue change management (RCM). RCM is mainly a retroactive process that deals with rectifying errors in the billing process such as incorrect diagnosis codes or missing charges. Revenue integrity is a proactive approach to revenue management that deals with prevention of issues that can lead to billing errors. Additional proactive efforts center around ensuring that accurate, enriched and relevant data is the source of truth where documentation originates and flows to downstream systems.

Role of EHRs in revenue integrity

The EHR is a digital version of a patient’s paper chart. EHRs are real-time, patient-centered records that make information available instantly and securely to authorized users. While an EHR does contain the medical and treatment histories of patients, an EHR system is built to go beyond collecting standard clinical data in a provider’s office, but to also deliver accurate information to downstream systems that can affect financial outcomes.

With the transition from fee-for-service to a value-based healthcare model, doctors and nurse practitioners play a significant role in revenue integrity. In one way because EHRs offers providers the ability to directly input diagnosis and diagnosis codes on their patients. Charges are captured and coding is done based on the information entered by the healthcare providers. In addition, some charges are captured through the clinical documentation by the providers. The quality of item data accessed at the point of care in the EHR is critical to ensure complete charge capture. Incomplete or inaccurate documentation as well as missing diagnosis codes can result in revenue leakage.

While interconnectivity of systems is crucial for revenue integrity, if the data flowing from one system to another is not accurate, complete and relevant, it does little to advance the goal of complete billing and maximizing reimbursement. Completely capturing all possible reimbursement opportunities is key to combat revenue leakage. Only with accurate and enriched item data captured at the point of use along with the ability to integrate with billing management software are you enabled more complete charge capture. Automation of this process negates the need for the manual entry of charges and thereby minimizes the risk of data entry error. 

Too often, revenue integrity is not a consideration in the acquisition of an EHR. This is usually an afterthought and so adequate processes are not put in place during the EHR conversion with the eventual consequence of revenue leakage. Establishing revenue integrity as a major consideration in EHR selection will go a long way in minimizing revenue leakage and maximizing profits after an EHR conversion.

 Considering an EHR implementation or conversion? Learn more about Clinical ConneXion.