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Winter 2024 Issue

Switching It Up
By Elizabeth S. Goar
For The Record
Vol. 36 No. 1 P. 12

Best Practices for Transitioning to a New HIM Vendor—Why, When, and How

The HIM outsourcing market continues to thrive, with ResearchandMarkets.com projecting a compound annual growth rate (CAGR) of more than 12% for medical billing outsourcing between 2023 and 2030, during which its value will expand from $12.2 billion to $30.2 billion. Data Bridge Market Research further projects that the health care revenue cycle management outsourcing market will reach $8.56 billion by 2030, a CAGR of 15.2%.

Behind the rapid growth trajectory is a confluence of trends. A survey by Black Book Research found that 98% of hospital leaders plan to bring in more third-party vendors for cost efficiencies and to allow internal resources to be focused on priorities, including improving patient access, acquiring replacements for aging equipment, bettering profit margins, and implementing digital technologies. Further, as provider organizations look for ways to find adequate staff and reduce costs, outsourcing has emerged as a valid strategy to achieve a financially healthier organization.

“Health systems are under margin and staffing pressures, which has led them to leverage outsourced vendors,” says Cheryl Cruver, chief revenue officer at AGS Health. Health care organizations, she says, “need top quality from these vendors, given that accurate HIM can have a positive impact on revenue for the health system, as well as the impact that accurately coded charts will have on analytics, population health, and risk scores.”

Other factors driving the uptake in demand volumes from both new and existing clients include growing customer expectations and demand for improved health care administrative processes. At the same time, says Aniruddha Sen, senior vice president and head of solution and transition for AGS Health, an evolving regulatory environment has intensified pressure on providers to reign in rising operations and administrative expenses.

There’s also a “capacity crunch” within the provider ecosystem, which is experiencing high attrition rates while the availability of talent to backfill openings is declining as more HIM professionals leave the field.

“All these challenges put together are pushing providers to think differently and look at alternative options [and] models as they envisage a transformation journey,” he says. “One of the transformation levers that is becoming a norm because of both effectiveness and efficiency is engaging with an outsource partner.”

For many health care organizations, that engagement includes replacing existing vendors.

Reasons for Change
The reasons for transitioning to a new HIM outsourced service provider or technology vendor aren’t always driven by disappointment. In fact, according to the Black Book survey, outsourcing partners exceeded the expectations of 88% of survey respondents; just 5% reporting being so dissatisfied with service levels that contracts were terminated.

Rather, according to Mari E. Cely, MBA, PMP, CHFP, director of business strategy and client services at YES HIM Consulting, the primary drivers behind the uptick in health care organizations switching HIM vendors “include the need for specialized expertise, the challenge of keeping up with coding changes, the impact of coding updates on quality, and the desire to improve revenue cycle performance.”

Often, she adds, the decision to transition occurs when client and vendor goals no longer align. “The main culprits, I would say, are because of costs and HIPAA.”

Sen points out that there are many reasons why an organization makes the decision to switch things up. Fundamentally, however, it comes down to the vendor’s ability to drive and help the organization fulfill its objectives and goals.

“The underlying reasons could be the vendors lack domain expertise, service delivery failures, unwillingness to invest and stand up as a true partner, the inability to impact positively on the organization’s financial performance, or an inability to generate insights through the data that the vendor touches [to help] the organization to make smart decisions,” he says.

At Banner Health, which supplements its internal coding team with multiple vendors including AGS Health, previous vendor changes have been precipitated by issues with communications and support as well as budget considerations. Renee Blickenstaff, BS, RHIT, senior director of acute care coding for the 30-hospital nonprofit health system that’s headquartered in Arizona and operates in six states, says it’s important for Banner to partner with outsourced vendors who put a priority not only on communications and feedback with the organization but also on supporting their own teams. When performance in any of these areas slips, it’s often a signal that a change may be needed.

“We want to make sure we’re partnering with a team that’s not just going to go out and find a coder and then leave them on their own. They must support their [own] team as well so that they’re able to provide good quality, good productivity, and coders who are going to stay with them, who aren’t going to transition out and look for employment elsewhere,” Blickenstaff says, adding that great communication is essential. “Are we getting good support? Are we having good two-way conversations with the vendor?”

“Some [vendors] have not done well with communications and we no longer use them,” Blickenstaff says. “It’s just not worth the effort on our part. Even though their team might be coding and doing a lot of the work, it’s still an effort for Banner to work with them. Anytime you bring on new people or new vendors, it takes a lot of time and resources from our team until they get established. If we don’t have good communication and it’s not flowing very well, we’re just not going to use them because they’re just too hard to work with. We want to work with vendors that are easy to work with.”

Is It the Right Move?
There are other considerations that should come into play when deciding if it’s time to change HIM vendors. According to Cely, in addition to the current vendor’s performance and reliability, the client organization should consider whether it can scale to support future growth. The potential financial impact of switching should also be considered.

For example, YES HIM offers potential clients a comparative financial analysis of in-house vs outsourcing. “We find that real data helps both parties determine if partnering would be beneficial,” Cely says, adding that the expertise and reputation of potential new partners as well as technological compatibility and requirements should also be considered.

Sen notes that delegating less productive tasks so internal resources can focus on essential business activities is the primary perk of outsourcing, along with lower operating costs, higher productivity, and better quality of work output.

“When you outsource, you gain back all the time [that] you can focus on health improvement and care of the patient. When you render patient care, you not only contribute to their health but [also] boost their trust factor,” he says. “Along with the way patient care and treatment is upgraded, it’s also essential to bring change in billing systems, data recording, patient form filling, etc. If not upgraded, it can hamper organizational reputation and money in the long term.”

“Instead of engaging higher management for these operations, it’s better to outsource these tasks to dedicated virtual experts. A team that has a habit of doing administrative jobs every day can bring perfection in completing the tasks there by increasing the quality of work output,” Sen says.

According to Cruver, it’s also important to consider vendor’s experience with similar organizations, proven impact, education programs, and flexibility of locations to meet availability expectations.

Finally, look at the quality of visualization, reporting, and data insights the potential new vendor intends to provide, as well as its capacity to support the client organization’s ability to drive better financial performance, Sen says.

Approaching the Transition
When it comes to making the switch, Blickenstaff prefers to start small with a pilot project or just a couple of coders. This gives both Banner and the vendor an opportunity to get to know each other and gain a clear understanding of their approaches to training and auditing, as well as workflow and communications.

Training is key, she says. The vendor will be expected to take over onboarding new coders, so it’s vital that their supervisors and auditors understand Banner’s processes.

“Every health care system can be a little bit different [in terms of] what we focus on [so] we want to make sure that they really understand our processes. We give them the support they need to carry that forward as we grow the teams larger and larger, and so that becomes a good practice between the both of us. Then we bring on more [people or] we move more of our business over to their team,” Blickenstaff says.

Starting small also helps mitigate any challenges that come up during the transition process, which most often involve learning each other’s workflows and sufficiently addressing quality and performance concerns.

The solution lies in the communication strategy, which should be established first and should focus on both the vendor’s team and Banner’s. It should strike the right balance between functioning independently and keeping the client in the loop. Those that succeed “tend to be the ones that are going to get the bulk of the business,” Blickenstaff says. “It really does come down to communication, that they heard us if we’re emphasizing an area of concern and that they’ll work on it,” she adds. “The vendors that are painful [to work with] are the ones where we’re constantly giving feedback on coders not doing something correctly or not following workflow; where we are constantly having to course correct their staff. We get that there will be bumps, but as long as you’re on top of it, it’s fine.”

In general, Cely recommends starting with a comprehensive assessment of the current situation and establishing a measurable baseline. Follow that with a detailed plan covering any necessary data migration, training, and integration.

Like Blickenstaff, Cely emphasizes the importance of communication throughout the transition process and the life of the relationship. She also warns that the most common pitfalls and challenges to be aware of during the transition itself include data loss and unexpected technical difficulties. These can be prevented with careful planning and secure data backups.

Assigning proper resources to the transition is also key. On the client side, this includes a dedicated point of contact who can provide access to both management goals and needed data, as well as IT and HIM personnel to oversee the transition. Meanwhile, “the partner vendor should provide technical support, training resources, and a dedicated account manager to facilitate the process,” Cely says.

Finally, according to Sen, both client and vendor should come together to create a detailed, comprehensive transition plan that considers all possible risk exposures and scenarios and their potential impacts.

“Detailed capacity planning through the transition phase both within the retained organization and the partner organization [that] considers the ramp-up time and ensures additional capacity creation beyond the ramp up mitigates the risk of work stoppages and backlog,” Sen says. “Additionally, potential flight risks and appropriate mitigation by way of special incentive plans for identified resources [also helps] overcome work stoppages and backlogs.”

Lessons Learned
Blickenstaff also emphasizes the importance of a transition plan and reiterates that communications are the underpinning of a successful vendor switch. It could be as simple as a standing meeting where both sides exchange updates, track performance metrics, and review concerns.

That meeting “is one of the biggest things AGS has done and continues to do, which we don’t always see from some of our vendors on a frequent and consistent basis,” she says. “That’s been very helpful, and it’s set the bar [and become] the gold standard [for] all of our vendors.”

Blickenstaff also likes to include the vendor’s team in any special education or information programs she creates for her internal staff. For example, she holds information sessions focused on drowning to prepare the teams for the expected increase in cases over the summer months.

Ultimately, she says, the goal is to ensure transparency.

“It should always be a partnership between the vendor and the health care organization. Their coders are working on our accounts. They’re part of our team, so I treat them [that way]. It makes the partnership much better,” Blickenstaff says. “Their coders may or may not be getting paid by Banner directly, but we rely on them, so it’s important to us that they’re in a good environment and they’re performing well, because that’s better for Banner,” she says. “It opens up great communications and a better workflow for everybody, which makes everyone happier.”

— Elizabeth S. Goar is a freelance health care writer based in Wisconsin.