Carle Health + HealthCatalyst: We keep hearing from experts that the way to improve healthcare operations is to make sure…
Peter Butler is president and CEO of Hayes Management Consulting of Wellesley, MA.
Tell me about yourself and the company.
I’ve been at Hayes for 25 years. We are a technology-enabled company leveraging our MDaudit software platform to drive billing and audit compliance productivity as well as revenue integrity solutions across healthcare organizations.
Is it hard to retool a consulting firm into a software vendor?
It’s challenging. After a long corporate career in consulting, you develop a name for yourself in that area. We got our start with IT consulting, then over a period of time, moved into revenue cycle consulting and EHR implementations and so forth. Our MDaudit platform took a greater foothold in the industry and we were experiencing quite a lot of trust with it.
We saw this, years ago, as the future direction of the company. We foresaw health IT consulting needs diminishing and becoming commoditized. We wanted to leverage our strength. That’s when the software piece came in.
It was a difficult journey trying to change the mindset of a 25-year-old company and people who have a lot of longevity in it, asking them to think differently, more like a software company. It came with a lot of challenges.
Are you happy that you made that decision early when you see other consulting firms just now starting to react to market changes?
Very happy. When we were going through that transition, the hardest part was that it wasn’t happening fast enough. I look back in the rear-view mirror and say, OK, we did it. We got there. This is good. Where do we go from here? It’s important for us to stay relevant in the industry and in our client organizations.
We’ve turned the corner. We are looking forward to building ourselves as a software company and continuing to make a difference in healthcare.
What are the top issues in billing compliance?
Years ago, the top issue was how a healthcare organization with 2,000 providers could audit all of them annually. Then they acquire two more medical groups of a couple of hundred providers. How do they get through those audits with limited resources? Their organizations weren’t giving them the staff since they were really seen just a cost center.
Now the trend is, I have limited resources, so let me take a step back and look at all of the billing compliance risk areas to my organization. Bubble those to the surface so that I can take my limited resources and go tackle those challenges. Are they really risk areas that I should be concerned about, or are we a billing outlier for good reason because we are multi-specialty and we specialize in this type of service? In the old days, they were looking for fraud and abuse inside their organizations.
Now it’s taking a different turn. Where can I sharpen my attention to the revenue cycle? What am I actually providing for service, but not billing for? Compliance officers stay in the mindset of looking for areas where they can ensure that their organizations are billing appropriately, not over-billing Medicare things and like that. But they’re partnering with revenue integrity leaders inside their organization who are looking at the same data. What are we leaving on the table? We’ve delivered these services. There’s more pressure on reimbursement. We want to make sure we’re getting paid for everything we’ve done.
Is anybody doing a lot of billing compliance work as due diligence before provider acquisitions or mergers?
They are, but they should be doing more. I’ve had conversations with compliance officers who said, I just got a message from the CEO that we’ve signed our letter of intent. We’re moving forward with buying this practice or hospital. They aren’t paying attention to making sure that, as part of the due diligence process, they are billing and coding appropriately. Let’s understand the risks of acquiring this organization. It’s almost been an afterthought from senior leadership that the compliance professionals find themselves in post-transaction.
Is the focus different when a private equity firm is the buyer, such as the trend of acquiring dermatology practices?
We’ve had some of those PE-backed companies call us and say, we’re about to make an offer for this dermatology practice. Before we finalize it, can you do some diligence around their revenue cycle and their billing practices? Make sure that they are billing and coding appropriately and that what they are telling us and what we’re reading in the reports is actually what’s happening.
Those are mini-assessments. They don’t take a lot of time, but they give the buyer an opportunity to understand where the risks and opportunities are. Once they finalize the deal, if they go forward, where can they find revenue opportunity and operational efficiency? There’s definitely a lot of that from the financially-minded buyers.
What trends are you seeing that aren’t getting much attention?
A lot of revenue cycle leaders in years past ran their organizations based on metrics. They would tell their staff, you need to make X number of calls or you need to touch X number of claims. A trend I’m seeing that will pay dividends later is that instead of looking at volume-based metrics or metrics for the sake of metrics inside those revenue cycle follow-up departments or patient access departments, ask that if you touched a claim, what did you do with it? Did you make changes to it that positively affected the organization? Were you able to identify root cause and go back and make changes that actually stuck so that we’re not seeing these problems over and over?
Some of our clients are assigning audit-minded people to look at the goals and responsibilities of those who support the day-to-day operations. Looking at whether their daily tasks drive positive change, the quality outcome in the operation. They are using spreadsheets to document who they’re working with, the types of audit completed, the follow-up, and the result.
It can become an arduous task, but the concept is, are you driving better quality outcomes in your role, or are you just saying you made your 50 calls or worked your 10 work queues? What was the result of that? That’s an important trend and overdue in healthcare.
Hopefully we can instill some best practices in the industry so that we have less need for those auditors. You’ve done your training and you’ve built some great training programs to educate the people who are touching every aspect of the business operation.
Do you have any final thoughts?
Some interesting things are happening that we’ll see more of as quality reimbursement plays a bigger role in healthcare. CMS recently proposed some E&M simplification rules with the concept that it will save money and provider coding time. They’ll save 50 hours a year or something like that, taking away all of the detail-level E&M coding and documentation you have to do. CMS is also looking for ways to save money for the taxpayers and the government, so it has to be viewed through that lens as well.
It will come at some point, probably not in January, but it will come with challenges that the healthcare industry needs to walk through. If you’re billing Medicare, you’ve got Blue Cross Blue Shield as secondary, and you’re doing simplified billing for Medicare, what do you do with that claim? It gets passed down to a secondary payer. There are other issues around RVUs and how you reimburse your doctors that will be impacted by changes like this from CMS. We have a lot of work to do as we think about simplifying the billing process in the industry. It won’t come without challenges.