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Access managers at small, rural hospitals must get past any feelings of denial or guilt about their troubled operations, and learn how to effectively make their case to the hospital’s CEO and other executives, suggests Jimmy Lewis, CEO of Atlanta-based HomeTown Health, a consortium of 28 rural Georgia hospitals.
"They need to understand that the system changed and left [their staffs] inadequately trained," Lewis says. "Many of them come to our meetings with a sense of depression and guilt that they can’t do the job, and say that it’s driving them nuts."
The reimbursement picture changed so quickly and so dramatically as a result of the Balanced Budget Act of 1997 (BBA) that small, rural hospitals — already suffering from a lack of resources in many areas — were left reeling, he notes.
Those hospitals’ registration and business office operations, Lewis adds, "were left totally inadequate because they couldn’t afford the hardware and software to get systems up and running" to deal with the changes. "The business office has become the Achilles heel to such things as reimbursement, revenue, fraud and abuse issues, proper patient record development, and on and on."
Because some hospitals "couldn’t or didn’t afford upgrades in computer software, edits for outbound claims were inadequate and, as a result, [the hospitals] published claims for certain denial," he says. "When that happened, we saw accounts receivable [AR] days go through the roof." Another category of claims, those "pending additional information," were exempt from provisions of the state’s prompt payment law, Lewis notes. With the rural hospitals poorly equipped to correct and rebill, those claims often ended up as a boon to the payers’ cash flow, he adds.
Created about four years ago to lobby the Georgia Legislature for reimbursement changes to help the state’s rural hospitals, HomeTown Health has evolved into an ongoing advocate and business resource for the hospitals that formed it, Lewis says. Its "sole mission is to figure out how to help rural hospitals survive."
HomeTown Health’s efforts to date have improved revenues for its hospitals by about $35 million, he says, in new revenue and in postponed cuts.
"Get past the denial, get into acceptance, find training and education, and be able to present your story in a fashion that the CEO will understand and get you assistance," he advises access managers. "You’ve got to have the buy-in of the CEO, who must understand that you might have to raise [registrars’] pay rates."
Choosing not to pay a registrar $2 more an hour, and thus failing to attract a more competent individual for the job, Lewis points out, ultimately could mean the loss of thousands of reimbursement dollars. "It’s a return-on-investment deal."
Through his role at Hometown Health, Lewis has become a passionate advocate of upgrading those hospitals’ front-end operations, he explains, most notably by improving the caliber of registration and business office personnel. That means strengthening hiring criteria, increasing wages, and providing the training necessary to handle increasingly complex job requirements, Lewis says.
"Suddenly, all the revenue is contingent on how well you define the medical record at the first point of entry," he adds. "[Registrars] have to have good communication skills, understand clinical and reimbursement issues, and [start a] crossed-t, dotted-i’ medical record."
Some of the rural Georgia hospitals he works with have raised registrars’ pay from minimum wage to a range of $8.50 to $9.50 in one year, Lewis notes.
By definition, HomeTown Health represents hospitals that have fewer than 100 beds and are outside the suburban areas of the state’s seven largest cities, he explains. About one-third of its 28-member hospitals chose last summer to have the federal designation of "critical access," Lewis says.
In exchange for that designation, he adds, those hospitals agree to downsize to 15 acute beds and 10 "swing beds" for intermediate transitional care, and to limit patient stays to 96 hours. The remainder of the hospitals complies with the rules of the discharge-related group (DRG) and ambulatory payment classifications (APCs) systems, Lewis says.
Under the guidelines for critical access hospitals, he notes, the government pays 80% of the cost of service, and the patient is responsible for 20%. That means, Lewis points out, that collecting the patient’s share of the bill is even more crucial for these hospitals.
Dorminy Hospital in Fitzgerald, GA, is one of the eight or nine hospitals — representing four health care systems — that are equity partners in HomeTown Health, says Paige Wynn, CPA, the hospital’s chief financial officer. Those hospitals, Lewis notes, were the "angel investors" in the limited liability corporation that was formed. Other participants, he adds, are charged $5,000 a year for HomeTown’s full range of services.
When Dorminy Hospital began working with HomeTown Health, Wynn says, "bad debt was going up, indigent dollars were not being captured appropriately, and we knew that with APCs coming in, copayments would be going up and bad debt would be worse."
In response, she says, "we revamped the business office." Collections was split off into a separate department, and when the three employees in that area left their positions, Wynn went outside the hospital arena to replace them.
"Instead of hiring from within the hospital, we hired people with collections backgrounds, and they have done a fantastic job of turning that department around," Wynn says. "We’ve had decreases in bad debt, an increase in indigent numbers — because of appropriate placement — but the overall dollars for both came down."
In fiscal year 2001, which ended July 31, 2001, bad debt decreased by 2% and AR days decreased by 10 days, from 86 days to 76 days, compared to the previous year, she notes. "We’re also better able to identify the type of people in [the] bad-debt [category]."
Not all of the improvement was the result of efforts by the collections department, she notes. "We put more emphasis on upfront collections, with guidelines on what to do — how much to expect up front from self-pay patients, for example."
"If we can collect, we collect," Wynn says, but if not, employees work with patients to arrange extended payment plans, or to determine if they qualify for Medicaid assistance or other outside help. "We also concentrated on education on why [gathering the proper patient account information] is so important."
The hospital has created two new positions on the business office side, she notes. Those employees’ sole job is to follow up on bills that have fallen out of the cycle, Wynn says. "In the past, it was left up to each individual biller to follow up on accounts, and they often fell behind."
Wynn is looking at establishing an incentive program, whereby employees receive monthly bonuses based on the accuracy of their registrations, she notes. About a year ago, Dorminy brought its salaries up to the median level for hospitals its size in the Georgia Hospital Association, and further salary increases are under consideration, Wynn says.
Like other hospitals in the group, Dorminy has benefited from the expertise of various professionals with whom HomeTown Health has contracts, she notes. A retired CEO who reviews managed care contracts for the organization looked over a proposed contract between Dorminy and a company with which it was considering doing business, Wynn says.
"We had no clue as to how to begin," she adds, "and that person helped us." Ultimately the hospital decided not to pursue the arrangement, Wynn notes.
As the time for APC implementation approached, a Georgia accounting firm ran pricing and cost analysis numbers for Dorminy and several other rural hospitals, she adds, "for less dollars than we would have had to pay on our own."
Hometown Health also has contracted with the following people, among others, notes Lewis.
• A person who does secondary claims review.
This woman looks at what hospitals were actually paid vs. what the contract says they should have been paid, he says, and collects the difference for them.
• A "marketing guru" who designs support programs for hospitals.
"One hospital that had never done a fundraising event did its first fundraiser, in a county with a population of 5,500, and raised $10,000," Lewis notes. Every sponsorship is filled for an upcoming benefit golf tournament, he adds.
• A CPA who does turnaround work and helps with other "heavy" financial matters.
"We use him extensively in working with the boards on strategic plans," Lewis says.
The "staff" of HomeTown Health, meanwhile, include "me and 28 CEOs and their CFOs and their directors of nursing," he adds. "We have full-scale e-mail. I am their ongoing communication loop, and I stay plugged in on hot topics."
From Wynn’s perspective, "one of the best things Jimmy Lewis does is get people around the table. He doesn’t just meet and present. He says, Let’s talk about it.’ It’s an open discussion of policies, procedures, and, Can we do this?’" she adds. "Networking with other hospitals gives insight into other ways of doing things."
[Jimmy Lewis can be reached at 3280 Cherry Oak Lane, Suite 100, Cumming, GA 30041; telephone: (770) 781-4677; e-mail: email@example.com. Paige Wynn can be reached at Dorminy Hospital, P.O. Box 1447, Fitzgerald, GA 31750; telephone: (229) 424-7100.]