March 2, 2009
Process Mapping and the Revenue Cycle
By Alice Shepherd
For The Record
Vol. 21 No. 5 P. 14
Learn how a series of Post-it notes—among other things—helped turn around a Mississippi medical center’s ambulatory revenue cycle.
Processes are the vehicles for achieving organizational goals, maintaining a competitive edge, and meeting patient needs. Unfortunately, processes—especially those that are cross-functional—are usually not documented, managed, or systematically improved. Process mapping (also called performance mapping) is a type of flowcharting that creates an accurate and detailed picture of business workflow. It goes beyond traditional flowcharting by not only developing an information systems (IS) map that tells an organization where it stands today but also designing a “SHOULD” map that shows where it needs to go.
Process mapping is highly effective when applied to a healthcare organization’s revenue cycle—the function that encompasses all administrative and clinical functions contributing to the capture, management, and collection of patient service revenue. It can identify productivity opportunities, analyze the root causes of problems, increase workflow consistency, identify ownership and accountability, point to best practices, and facilitate consistent education and training.
In January 2006, Mississippi Baptist Medical Center’s HIM department spearheaded the mapping of the organization’s ambulatory revenue cycle. The process brought order to chaos and streamlined the revenue cycle for the hospital’s more than 175,000 outpatient visits per year, with results that are visible in the bottom line. Any organization can achieve similar results, given a willingness to change, the discipline to follow the mapping process, and the follow-through to make the necessary changes.
Traffic Jam Ahead
Mississippi Baptist, located in Jackson, had purchased 3M’s Ambulatory Revenue Management Software (ARMS) but was only using its reporting functionality, not the encoding, abstracting, or editing features. “The reports the software generated were so daunting that we were overwhelmed,” explains Patsy Hathorn, RHIA, the medical center’s director of clinical resource management. “They pointed to many problems throughout the revenue cycle, ranging from charging to coding to medical necessity documentation. We had also observed a number of negative trends, such as increased denials, increased unbilled accounts, lack of communication, insufficient levels of insurance verification, and insufficient monitoring of payer performance. We initiated process mapping to gain a better understanding of all the players and pieces of the revenue cycle puzzle.”
The Knowledge Webb (TKW) Healthcare, a consulting firm, was engaged to facilitate the mapping project. “Hospitals purchase new software in the hope that it will magically solve a problem,” says Barbara Loe, the company’s vice president of sales. “When that does not happen, they’re disappointed and usually blame the vendor. However, the failure generally derives from one of two causes. One is that the organization has not updated its existing processes to take full advantage of the software’s functionality. The other is that the software has not been integrated into the hospital’s day-to-day workflow. It’s not uncommon for hospitals to get only 20% to 25% of a new software’s value, and that’s a huge loss.”
Map the Road to Value
The hospital’s process mapping project followed these eight steps recommended by TKW Healthcare:
1. Identify the critical business opportunity. “Our critical business opportunity was to get paid promptly,” says Hathorn. “Our claims were often held up in an edit or a coverage determination.”
2. Identify the key processes with the greatest influence on the critical business opportunity. Mississippi Baptist chose same-day surgery and radiology, as both were high-dollar revenue points and amenable to change. Their functions were sufficiently generic, so any best practice identified could be applied to other ancillary service departments.
3. Select an executive sponsor and create a project team. Hathorn explains: “Because we wanted buy-in from administration and the clinical areas, we first engaged the CFO [chief financial officer] and the controller. The CFO became our executive sponsor because it was easy to show him how many dollars were being held up by revenue cycle inefficiencies.”
“Executive sponsorship is important because the complex processes that run a business are almost always cross-functional,” says TKW Healthcare Chief Operating Officer John Trusten. “Someone at the executive level has to have ownership and take the lead in breaking down functional barriers.”
Although the mapping project focused on radiology and same-day surgery, the initial meetings and introduction to the mapping project included clinical directors and managers from physical therapy, cardiovascular, surgery, radiology, and respiratory therapy, as well as personnel from admissions, scheduling, coding, compliance, and the business office. “The primary reason for including these departments was that the mapping process and the best practices it identified would be transferable to those areas,” says Hathorn.
4. Prepare for IS mapping. The IS map preparation began with meetings to set the agenda for the one-day mapping session in which the group selected subject matter experts (end users) and their managers, delimited the project scope, and clarified expectations. Next, the team zeroed in on the project’s business purpose or value proposition, which was to fully understand the ambulatory revenue cycle and locate the source of the problems identified in the ARMS reports.
“Identifying the business purpose or value proposition is critical,” says Trusten. “Process mapping is just a means to an end. Its purpose is to increase business effectiveness or value.” Trusten prefers the term “performance mapping” because he has worked with organizations whose process mapping effort failed as they did not tie it to business goals, objectives, and metrics.
5. Develop the IS map. On the big day for Mississippi Baptist, 25 to 30 people, including subject matter experts and their managers, a 3M product expert, and the TKW Healthcare facilitation group, gathered. “We first walked them through the business purpose, project scope, methodology, and our expectations for the day,” explains Trusten. “Then, we gave a half-hour overview of the 3M ARMS product we wanted to integrate into the revenue cycle process to ground everyone on the product’s capabilities.”
Then the real work began. “End users from the chosen areas explained the actions they perform in the revenue cycle process,” says Hathorn. “The Knowledge Webb Healthcare coordinator captured each action on a Post-it note, color coded by department, and placed it on a large sheet of paper on the wall, grouped by department. It’s not easy capturing everybody’s thought process. As soon as one individual explains an action, others chime in as they recognize how that action impacts, or is impacted by, their own job. You need to have a facilitator who clarifies what is being said, as well as a coordinator who captures the actions in writing.”
“Our team included a facilitator, a coordinator who captured the information on Post-it notes, and a Visio expert who translated what was being captured into an electronic map,” says Trusten, who served as facilitator. “Sometimes mapping can be like watching grass grow—boring—so my job is to keep it moving and make sure everyone stays focused. Also, since the discussions tend to be all over the board, I restate what I think I heard into linear steps, which I then validate with the subject matter experts.” An outside facilitator is ideal because he or she brings third-party objectivity.
6. Look for disconnects and opportunities. A key piece of the IS mapping agenda is the brainstorming of process opportunities—constraints, gaps, and disconnects that impede the revenue cycle process. These may include limited technology integration, too many go/no-go decision steps, too many feedback loops, zigzags across functional channels, redundant steps, non–value-added steps, and bottlenecks. “We let the people talk freely about any revenue cycle problems that keep them awake at night,” says Trusten. “Those are all opportunities our SHOULD map will address.”
“You have to have an open forum,” stresses Hathorn. “It’s not about right or wrong; there is no blame here. Our goal is to improve the overall process and hopefully improve each individual’s work.”
The IS mapping day yielded a huge map that displayed the status quo—all the productive and unproductive steps making up the revenue cycle. “It was very intense but very effective,” says Hathorn. “It changed the participants’ perspective. The amount of rework happening on a daily basis to get one claim out the door was staggering. Seeing the impact of a single event on the cycle opened communication lines and broke down turf management. For example, we saw how data from our chargemaster and the service departments’ HIM codes were both crossing over to the bill, creating duplicate charges. Also, the chargemaster was not updated regularly, and there was no accountability when it came to entering or deleting data from the program.”
Two days later, the TKW Healthcare team returned with the electronic Visio version of the IS map to help Hathorn’s team correct errors and clarify processes as necessary.
7. Create the SHOULD map. The SHOULD map spotlighted the ideal revenue cycle process with full integration of ARMS and best practices. Trusten explains how this map was created: “With the help of product and process experts from 3M, we broke apart the IS map and re-created it with optimal integration of the software by function, eliminating inefficient manual processes. We rearranged the action steps captured on the Post-it notes and added steps in the right places for maximum efficiency.”
8. Review, finalize, and distribute the SHOULD map. The TKW Healthcare team returned to Mississippi Baptist to present the SHOULD map, walk through the optimized revenue cycle process, and explain the recommendations for maximizing the value of ARMS. “The SHOULD map reduced the IS map to a clean workflow from beginning to end of the cycle,” says Hathorn. “We got a long list of specific opportunities concerning, for example, OCE [outpatient code editor] edits, CCI [Correct Coding Initiative] edits, modifiers, and LMRP [local medical review policy] flags. We saw how ARMS could immediately help us correct a potential compliance issue in interventional radiology where duplicate charges were occurring. The mapping process broke down silos, opened up communication, and gave us many ‘aha’ moments.”
Get on the Road
Some SHOULD map actions were implemented the same day. “During the presentation, a director got up and took care of one of the issues,” says Hathorn. “The problem was that patients who were preadmitted had to return to admissions on their day of visit, queue up with patients who were not preadmitted, and go through the admission process before being sent to their ancillary department. There was no reason why these people could not go directly to the service area.”
After the SHOULD map meeting, the cross-functional mapping team was converted into a steering committee composed of the CFO, the controller, directors of the business office and clinical resource management, the business office IT liaison, and the HIM coding manager. Other team members became facilitators, recorders, and members of workgroups assigned to each SHOULD process. A project plan with time lines was established for seven workgroups with accountability to the steering committee. These workgroups included the unit clerk, staff tech, surgical nurse, and a business office biller or HIM coder.
“HIM retains the responsibility for a clean claim, but now we have an avenue, based on the SHOULD map, for directing issues to the appropriate department or person,” says Hathorn. “We have a process in place to educate problem areas and thus reduce the need for rework.” She is using a continuous-improvement, closed-loop process, according to Trusten. “As she completes a couple of projects, she starts another one based on our list of recommendations,” he adds.
Hathorn notes that Mississippi Baptist was receptive to implementing the SHOULD map. “Other facilities I’ve worked in did not want a consultant presenting them with a plan, policy, and procedure,” she says. “They wanted to work through those issues themselves. However, this was the perfect tool for us, to help us identify where we were, show us the optimized process visually, and leave us to implement it.”
Reach the Destination
The mapping project resulted in the design of an organizational best-practice model for the outpatient revenue cycle and gave the hospital 100% of the value from its investment in ARMS. Specific benefits included the following:
• A shorter accounts receivable billing cycle. In July 2005, outpatient discharge not-final bill days were 5.14. In July 2006, after mapping, they had dropped to 4.17. “We can’t get much closer than four days because we cannot finalize the bill until any late charges have been added,” says Hathorn.
• Lower compliance dollars. Estimated overpayments were $47,275 in 2003 and $52,289 in 2004. Since the mapping project, the hospital has written no checks to Medicare for overpayments.
• Reduced write-offs in rehab by $12,565 and in radiology by $26,980. Past write-offs were due to missing medical necessity documentation and poor follow-up on edits and denials.
• Ambulatory beneficiary notice increased by 23%, allowing patients to be billed promptly when Medicare does not pay for services.
The impact on HIM was tremendous. “We now have business workflow consistency, which has made us more efficient,” says Hathorn. “Process mapping has also helped us identify ownership of problems, and accountability is spread across the facility. Our productivity has improved, for example, because bills can be sent to payers promptly without the need for rework. Further, since we are now using ARMS to capacity, we can attract and retain remote coders who can access the electronic medical record and coding tools from home. We have also automated coding quality audits.”
Hathorn suggests other HIM departments should consider process mapping. “End users in the revenue cycle have tunnel vision,” she says. “Everyone only knows their piece of the puzzle. They don’t question why they perform certain actions. Mapping educates people on how what they do impacts or is impacted by what others do upstream or downstream in the cycle. It opens lines of communication because there is no retribution.”
Process mapping removes obstacles and streamlines work flow to help healthcare organizations achieve accurate transactions that can be completed in a timely fashion. A revenue cycle made up of efficient processes minimizes costs, maximizes productivity and revenues, eliminates silos, promotes communication, facilitates regulatory compliance, and increases the quality of care. “The key to productive mapping, besides executive sponsorship, is a strong champion,” says Loe. “Process mapping will not produce good outcomes if the organization is not committed to implementing the changes. Mississippi Baptist got tremendous results because of Hathorn’s unwavering commitment to moving the organization forward. There are many strong, committed HIM directors out there that are good at facilitating change in their organization. Through process mapping they can accomplish their goals.”
— Alice Shepherd is a southern California-based business-to-business journalist specializing in healthcare topics.