Calculator, hundred dollar bills and stethoscope on top of financial records.

By: Jeffrey DiLiddo

Last week, an article in Becker’s Health Review reported that Tower Health in Pennsylvania are pointed to their EMR installation as the source of the loss they posted in the first half for the 2019 fiscal year, due to an “unanticipated large number of denied and delayed claims.” The article goes on to say “A majority of denials that management is challenging relate to provider identity, inpatient to observation downgrades, and medical necessity issues which are automated items” in the EMR/PM environment.

This isn’t an isolated story. This isn’t an issue specific to the EMR company in that article. It’s a symptom of a larger problem in healthcare software development and maybe, more importantly, deployment. If you’re reading this and you work anywhere near a hospital or physician group you have heard horror stories about the negative impacts of their shiny new Electronic Medical Record and Practice Management systems.

I read articles like the one above and wonder, “how did so many smart people let this happen?” Regardless of the fact that my experience in the Boston teaching-hospital space taught me that world renowned healthcare systems will spend billions of dollars on new clinical systems leaving the revenue cycle side of the decision as an afterthought, I still don’t understand why they do it. How do they expect to pay the bills? Typically the RCM team is the last to know, and their opinion rarely sought.

Twenty years ago I was working for a small DME company down the road from Fenway Park in Boston. That company was gobbled up during an M&A deal cramming (in just 120 days) four different DME providers into one large DME entity. Leadership was solely focused on the most efficient way of delivering care to the patients while the concerns of the inventory and billing teams fell on deaf ears. It took less than 24 months for the company to rack up $15MM in expenditures while it was collecting $2MM in cash. We just couldn’t survive and one day the bank showed up and put a chain on the door. That was the end of that.

The reality is that too many EMRs and Practice Management systems look to automate and leverage data for clinical operations and analytics. Billing and other “manual” tasks are left to the unsuspecting billing team. Accounts receivable and claim denial management efforts matter. Resolving denied claims immediately can save any organization hundreds of thousands in excess costs and access to actionable data that helps head problems off at the pass. You don’t want to look back after 6 months to find out you have a problem. You need to know right now, and you need to know where to focus your efforts to have the biggest impact.

Spending money on a RCM focused software product is not just a good idea, it is the bedrock of sound healthcare finance. The EMR and PM are great sources of information and when deployed optimally, may expedite patient access/flow. However, not maximizing each potential penny eligible for every billable item, is shortsighted and an avoidable mistake. Invest time to learn what products exist to help your team see real ROI from an optimized revenue cycle management process.