LEAN Implementation Reduced Insurance Claim Turnaround by 12 days
A behind-the-scenes LEAN project involving patient medical records and accounts receivable at Avera McKennan Hospital & University Health Center had a very up-front impact on the cash position of the entire organization - to the tune of nearly $6 million.
By streamlining processes for medical records and insurance claims, a LEAN team in the Financial Services and Health Information Management departments succeeded in reducing billing turnaround time for faster recovery of payment for hospital services.
A reduction of eight accounts receivable (AR) days resulted in a one-time cash infusion of $5.9 million. That $5.9 million would have been received by the organization, but not as quickly.
"The ongoing gains our organization is seeing by having that cash flow accelerated are phenomenal," said Paul Stubbe, director of patient financial services at Avera McKennan. "If we calculate the return on investment, it represents an annual saving of $300,000 to $400,000."
The LEAN team accomplished this through changes such as standardizing work areas, improving and standardizing documentation, organizing coding on records for one-piece flow, scripting claims and remittance information, and consolidating hospital and clinic registration.
"The LEAN analysis evaluates the whole workflow process in general and digs down very deeply into each specific area," Stubbe said. "This has opened the door to a more efficient process of evaluating our AR and accelerating even further the billing process and overall collection of our AR."
Other than improving cash flow, the team increased productivity of office staff due to decreased handling, and reduced insurance claim turnaround time by 12 days.
By improving their own efficiency, staff feel more fulfilled, knowing they are contributing to the overall good of the organization.
"Certainly there are always opportunities - it's just a matter of looking for them," Stubbe said. "With the particular project we took on involving the revenue cycle, the results speak for themselves. The gains were substantial and measurable."
Due to the complicated workings of private insurance, Medicare and Medicaid, possible improvements were difficult to implement, not knowing the possible repercussions for other departments.
"We found that to get our arms around our revenue cycle was a large and imposing issue," Stubbe said. "We thought there might be a better way, but to implement that took a little help."
LEAN supported other efficiency changes, such as specialty distribution of billing work along lines of the different government and private payors. "It's very difficult for employees to know and understand everything. For new employees, the training curve is absolutely enormous," Stubbe said.
Changes have allowed employees to concentrate on billing specialty areas, rather than being expected to process billing across the board in all areas.
"With LEAN, we were able to statistically evaluate where we had been and where we wanted to go, and comfortably make that transition. We were able to know that we had made the right change to help the staff and department do a better job," Stubbe said.
LEAN has helped the financial services department make well-informed decisions. "With the myriad of different options available, it helps us get to one particular best choice," Stubbe said.
In the future, financial services staff will continue to look for ways to make the billing process more efficient for the organization and reduce losses, for example, in the area of denials and underpayments.
"The changes we make impact such a large part of the organization financially," Stubbe said. "The LEAN process helped us by confirming that the choices we were making were correct. It made it much more possible for us to move forward and feel good about moving forward."
