Brian Sherin is president of Besler Consulting of Princeton, NJ.
Tell me about yourself and about the company.
I got started in healthcare accidentally. I was doing an internship while I was in college, in an accounting department of a hospital. I can still see the face of the controller who I worked for at the time when I walked in, that look of, “I’m going to deal with this kid all summer?” But we got along well and I did that for two summers. I got involved in a lot of aspects of accounting, although my major was finance, not accounting per se.
When I came out of grad school, I ended up in a very a bad economy, pretty similar to now, and I didn’t have a job. One of the guys I worked with in the accounting staff there called me and said, “Are you interested?” and I said, “Well, sure.” So I did that, and then about eight months later the controller asked me if I wanted to take the business office manager position. I lost a lot of respect for them at that point [laughs] –I thought he had better judgment than that since after, all I had virtually no experience. But he told me he had confidence in me and I could do it, so away we went.
Over the next 11 years, I moved from patient accounting to managing the overall revenue cycle, worked closely with HIM and other clinical departments. I eventually I took over on more administrative responsibilities. To this day, I’m really grateful for the guy having confidence in me at the time. He gave me an opportunity to learn so much and to set me on my career path.
As you can tell by now, I’m not an IT expert in any way, but I think from the business perspective I am very much an advocate of using technology to every advantage possible. I guess I could stretch it and say that I’m an IT user expert, or maybe advocate is a better way to put it. As I look back at my career, some of the more positive and exciting experiences I had were overseeing several HIS system implementations for the hospital. I just found them really very rewarding once completed. I’d like to do some more of that, but I haven’t been involved with those for a while.
While still at the hospital, I talked to Phil Besler one day. He had founded the firm back in 1986 — this was probably the early ‘90s. I joined him. It was really a reimbursement firm back then. That’s all we did except some charge master work. We began to expand that and we moved into doing hospital revenue cycle consulting in the mid ‘90s. Those areas grew pretty quickly. Finally we established a coding accreditation compliance service line, which rounded out our service offerings.
Now I would define us as a financial and operational consulting firm. We have about 200 customers in 20 states and roughly 50 employees. Most of our clients are hospitals, though we count physician groups as well as other types of providers as clients. A majority of our business has been traditional consulting.
In 2002, we did a former company called Innovative Healthcare Solutions, which we began by taking the charge master review software we had developed in-house — which I believe was in FoxPro at the time — and we developed a Web-based tool that we marketed. It was pretty exciting. We’d never done anything like that. Eventually we developed other decision support products. IHS was eventually sold to Accuro in 2005, then Accuro became part of MedAssets, I believe in 2008.
In the last two years, we began to focus on software again. We launched our BVerified line of solutions last year. Our latest two products were launched early in January. The idea behind getting back into software and creating these solutions is that we want to be able to provide our customers these software products that allow them to receive the benefits of our expertise we’ve developed over the years, while at the same time creating the potential to drive additional benefits for our client through that software.
Between your consulting opportunities and now you’re more productized offerings, what revenue opportunities do you typically find that even pretty good hospitals and even your competitors might miss?
Most of what we’ve been doing is on the consulting basis with regard to some of our revenue recovery opportunities. We do the majority of our work as the primary vendor. However, we have found pretty significant opportunities going in either behind just solely internal processes on the part of hospitals or after other vendors. Depending on the particular issue, whether it’s on the DRG transfer rule or IME, very often we find up to 30% or so of additional revenue.
I think a lot of that has to do with just our approach. We’ve refined it very much over the years. We’ve identified some areas that we think are often overlooked either through internal processes or by other vendors. But at the same time, we’ve focused very, very heavily on the compliance aspects of it. We also have seen some processes that are not very compliant. We had a lot of input from our clients that they wanted something that they could be assured was entirely in compliance with all the rules and regs. We put a lot of effort and resource into that.
Is there a lot of concern out there about the RAC audits and all the other audits that the CMS is talking about doing?
I think there is, but my sense is it depends on what part of the country you’re in. Here in the Northeast, we haven’t seen a lot of RAC activity, but it’s almost like everyone’s waiting for the other shoe to drop. They know it’s coming — they just don’t know when. With their hands full with what they already have — with all the organizations out there doing audits and all the other demands they have on them, especially from the IT perspective — they’re very concerned, yes.
Do you think it will be like the IRS, where they will take a small sampling and make a high-profile example of any problems they find?
I don’t think that’s the way it’s necessarily going to go. Even on the RAC side, they’re still finding their way as well. I think some of it will come to that, where they’re going to realize that it’s so labor intensive to get through some of this. If you look at the recent demonstration project that CMS put out where if you want to join on, you’re essentially giving up your right to appeal short stays that are denied as inpatients, but they will allow you to bill them as outpatients. My guess is that one the reasons they’re going forward with that demonstration project is just because of the volume of appeals they’re experiencing.
I think it’s going to take some time for everything to settle out. Eventually, you may find more of the old style initial teaching hospital audits from way back in the ‘80s, when they looked at 30 claims or 100 claims and decided that they were due $18 million. I don’t think it’s going to be quite that bad, but I think there’ll be more of that practice as we go forward.
Describe the problem with hospital readmissions and what clients are asking you to do to prepare them for that.
CMS is going to begin looking at data with regards to readmissions. They’re going to essentially identify the top quartile in hospitals in terms of unnecessary readmits or related readmits. It’s going to reduce your overall Medicare-based payment. A lot of hospitals are looking at that. It’s fairly easy to look at the Medicare data that’s out there to determine where you fall yourself within the three categories of diagnosis they’re going to be looking at. It doesn’t really necessarily tell you where you fall in relation to what quartile you’re in.
It seems to us from talking to a lot of hospitals, those who have a problem know they have a problem. In a lot of ways, they feel like they’re in a situation where there’s not a whole lot they can do to effectuate any real change in those patterns quickly. Another factor is that a lot of people don’t realize is that the readmissions include if you discharge a patient and they get readmitted to another facility. You don’t even know that, but that counts towards your readmission number. And that data is not generally available to everybody.
I think it’s something that everyone is trying to do a better job of coordinating care. Once patients leave the hospital, they’re trying to do a better job of communicating with patients, making sure patients are following through on physician orders and seeing their physician within a specified timeframe and so on. But there’s limited resources to be able to do that, and there’s limited ability to really change people’s behavior in that way.
With the emphasis on making clinical care delivery less episodic, the billing stayed episodic and only now is moving toward billing for non-piecemeal work. Are hospitals going to be able to adjust quickly with the emphasis on ACOs?
I think that’s a real problem. Physicians have had that issue over the years too, where in some situations, they’re expected to manage care well beyond when they see the patient. It’s difficult. There’s really no reimbursement for that aspect of it. I think that ultimately hospitals understand that that’s the way it’s going. Whether you believe in ACOs or feel that they’re going to be the panacea some people think they’re going to be, nonetheless, that is the way things are going.
I don’t think anyone will argue the fact that a better process to manage patients once they leave the hospital — make sure they are following certain care plans, make sure they are seeing the right types of providers in the proper timeframe — is going to reduce readmissions, it’s going to reduce inappropriate admissions, it’s going to cut down on emergency room visits, and it’s going to overall have the great potential to lower the cost of healthcare. But we’re asking a lot of providers out there that are not going to be reimbursed in any way for a lot of those activities to take that on. I think that the funding for that is going to become a really critical issue.
There’s probably not much appetite to pay more for care, and not much ability since the government’s such a large payer. I guess it’s the equivalent of telling a steakhouse, “As of next week, you’re going to offer the same menu except as a one-price buffet.”
I agree. I don’t think there’s going to be much appetite at all for the government to put out any more money for this kind of thing. I think they feel that through some of these programs such as ACOs, with some of the incentives and whatnot, that’s going to effectuate some of this. And it may, for those who decide to become ACOs or maybe are positioned to do that.
The fact is that most providers are not really positioned to become ACOs and the incentives that are there for them. Even some of the premier facilities in the country have indicated that they don’t see the advantages to going to that ACO model and getting involved in that whole program. If they don’t see the value, it’s hard to believe that any inner city hospital is going to have the funds or the abilities to be able to put any kind of model like that in place unless they’re somehow funded for it.
Hospitals are imitative. If one does it, everybody does it. If a consultant starts recommending it or it shows up in a magazine, everybody jumps in line to do it. Do you think they’ll experiment with the ACO and either back out quickly or lose their shirts before they realize maybe it wasn’t as good as it sounded?
I don’t know. I’ve done some speaking engagements and have been in a number of meetings where someone would ask, “Who here from a provider side is going to plan for being an ACO?” Almost everyone raised their hands. I think that was just because it was early on — the rules weren’t defined.
As more and more comes out with regard to what’s expected from ACOs and what the cost is going to be and the type of infrastructure you had to have in place to effectively manage an ACO, I think you’re seeing more and more back away from it. My guess is there’s not going to be a whole lot of organizations that actually go all the way through and become an ACO and actively participate in that project. So we’ll see. My guess is that as providers dig through it, they’re going to realize that there’s really not a whole lot of advantage to them.
Do you have real-world examples of what you’ve found with your BVerified process?
The very first client we had for the screening verification tool, which was really the first BVerified product we put out there, we immediately found something which looked … I won’t get into the details, but it looked very questionable. We immediately called them and it was something that they were aware of. They were actually pretty impressed that we came up with it so quickly.
Everyone’s had some kind of finding. Sometimes as you go through those, you identify that there are things that were corrected or maybe it was incorrect information that was submitted to do the verification and whatnot. But our clients have been very happy with it thus far. To them, it’s a one-stop shop. They don’t have to have multiple screening tools in place. They’ve been happy with the product and the results they’re getting out of it.
It’s to check the HHS’s database for excluded parties, correct?
Yes. It goes through and checks both federal and state databases. We can adjust that, because with regard to some state databases, there are timeframes and “how often” rules in terms of how often you have to check. We built all of that into it. Essentially it’s looking for excluded individuals. It also has some additional functionality — it allows you to verify licensure and things like that as well.
You’ve done services related to point-of-service collections. Money is being left on the table by letting patients walk away without, but consumers are pushing back about being asked for a credit card before they’re seen. How do the hospital know that they’re ready to initiate that planning for point-of-service collections and what’s involved with transitioning to that?
The time is well past when those programs should be in place. In talking to our clients, I’ve always maintained – and this goes back quite a ways – you need to start this now, because it’s not like you just put someone with a cash register at the door. It doesn’t work that way. Most hospitals serve a pretty much a specified community, and it’s a matter of changing that community’s understanding of how you function. There’s a lot of communication that has to go on with both the patient population as well as the referring physician population. They need to understand what you’re doing and why you’re doing it.
Physicians have been doing this very effectively for a long, long time. Maybe it’s not some of the same dollars that are involved in terms of physicians who are merely collecting co-pays, but I defy you to find anyone who’s covered by any kind of a managed care or a PPO plan who’s gone to their physician who’s gotten to see that doc without paying their co-insurance first. They’ve done an effective job of that, so physicians understand the need for it.
The dollars are significantly more on the hospital side, but that can be worked through in terms of an arrangement with the patient. It takes a long time. It’s an educational process, it’s a community educational process. It’s not something you just turn the switch on overnight. What I’ve seen mostly is that hospitals have implemented it in maybe a few different areas within the hospital, but not universally. They do get pushback.
There has to be a commitment all the way up the management string, right up to the CEO and the board, that this is what we’re doing and this is how we’re going to do it. They’ve got to resist those calls that come in and say, “I was there the other day and I’ve been coming there for 30 years and now you’re asking for payment up front.” Everyone has to be on board, because as soon as you start making exceptions, it quickly loses its effectiveness.
What do you see as major areas of concern in the next five years and what should hospitals be doing now?
We’re addressing a lot of things on our end. With some of the other software tools we’ve developed, we’re trying to come up with ways that hospitals can take our expertise and our experience with a lot of things. We put them into a software tool so that the hospital can internalize them and gain greater control over some of those functions. Instead of doing it on a consulting basis, they have the ability to do it on their own. That works for some, doesn’t work for others.
We understand that a software solution isn’t automatically the solution for everybody. We’re trying to do that because what we’re hearing from some of our clients is that they need to bring some things internally and they want to reduce their costs a little bit. That’s why we’ve done those things with the transfer DRG tool and the Medicare advantage IME tool and our revenue integrity auditor.
At a higher level, my feeling is that over the next five years, hospitals have to begin to fully integrate their clinical and their financial operations. There’s still a separation there to a large degree with a lot of hospitals. While everyone’s moving in that direction, I think it needs to be looked at more as a business. There has to be a way to bring together those two aspects of the operation in one cohesive whole.
While obviously patient care is the business you’re in and you want the highest possible quality you can get, there needs to be some control over that, in terms of how you best do that. I think that’s the whole ACO concept, which is good. I’m not convinced on the ACO model, but I think the ACO concept is good in that it makes you bring it all together, operate more cost-efficiently, and coordinate care across the whole spectrum of the services the patient’s going to receive in their inpatient, outpatient, physician, physical therapy, specialists, whatever it may be.
The most important thing over the next five years is to start looking at healthcare delivery – and I don’t mean this in any kind of impersonal way — as a business, bringing together the financial delivery of care and the clinical delivery of care so that you’re getting the most sufficient product you can.
Any concluding thoughts?
We’re experiencing the most interesting and fast-paced changes we’ve ever seen in this industry. More so than ever, the changes we’re seeing now will dramatically alter the way healthcare is delivered and managed from this point onward. Everyone’s got to be ready for it, because I don’t think there’s any turning back. There may be some stumbling along the way, but everything that’s been started now is going to move forward. As Bob Dylan said, “You better start swimming or you’ll sink like a stone, because the times they are a-changing.”
We’re changing our approach and trying to meet the changing needs of our clients. We continue to focus on trying to find all the revenue we can for our clients. We won’t stop that. That’s the reason for developing some of these software tools — to give something to our clients that has a demonstrable, compelling ROI.
It’s pretty exciting times, but they’re also very challenging times. I think the pace is only going to pick up. We’re going to see incredible rate of change over the next few years.