Integrating Disparate Revenue Cycle Functions in a Multi-hospital System:

Changing Component Territorialism in Revenue Cycle: Breaking Down Silos

Fostering Collaboration, Communication, and Efficiency in a Multiple Hospital System:

A Case Study


As a board certified physician with a wealth of knowledge in the development of best practice

programs related to utilization review, physician documentation, physician advisory programs, and

regulatory compliance, looking under the hood of revenue cycle became a natural next step. With

a previous collaborative relationship with this health system, investigative skills, speaking and

writing in this area, I was asked to evaluate and make recommendations for a very comprehensive

project that required extensive data reviews, interviews, and best practice research.

The scope of the project included a very comprehensive review of the Utilization Review

processes, the Physician Advisor program, the roles and working knowledge of other health system

physician and non-physician leaders in the review process (Case Management, Clinical

Documentation Improvement, Utilization Review, Chief Medical Officer, etc.), policies,

opportunities, and outcomes.

The goal of the engagement was to make recommendations for an integrated, collaborative, unified

team approach for a what came to be known as a “Utilization Management 360â” approach

enveloping all intra-operational entities involved in decision support for documentation and billing


Problem Statement:

Revenue cycle management (RCM) in the healthcare industry continues to operate at decreasing

profit margins and is in dire need of increasing efficiencies and preserving net patient revenue.

With increasing costs to provide services to patients, challenges with accurate physician

documentation, an atmosphere of increasing payer audits and denials, and the addition of a

healthcare pandemic, solutions seem to be evasive. The major components of RCM function have

evolved over the years into an unintended mindset of silos and territorialism.

The commonality amongst these components is that they are all looking at the same medical

record, documentation. Yet, each element sees it through their own lens with the unintended

consequence of collaboration remaining out of reach without a focused communication

partnership. The fundamental problem in this evaluation to be solved was to provide a holistic

approach to identify the missing pieces in their workflow. There was a need to establish a focused

communication partnership between and within stakeholders of their revenue cycle, break down

the silos impeding collaboration within the system. Standardization and accountability are

necessary across the enterprise to provide a solution to patient-centered clinical and financial


Recognizing their own unique situation, this 3,739 bed, 12 acute care hospital system provided

specific targeted areas for evaluation:

• Evaluate the Utilization Review Process to ensure compliance with the Conditions of

Participation (CoP)

• Look at the utilization of Physician Advisors and indications for referrals for second level

case reviews

• Look at the Vice Presidents of Medical Affairs (VPMA) of each facility in their role of

being the UR Committee physician for downgrades in the Condition Code 44 and CoP


o      Involved the clinical knowledge base used for making these decisions, efficiency,

capacity, motivation, timeliness, and understanding of Federal Rules and


• Standardization of physician education across the enterprise

o      With special focus on Orthopedics

• Evaluation of the Integrated Care Management (ICM) department to assess standardized

duties and functions, general knowledge of the Utilization Review process, and where there

were disconnects and mis-understandings

• Identify challenges, processes, and solutions to building a comprehensive, best practice

Physician Advisor program across the system

An indication of success in this project was simple – to integrate all of the involved areas into a

collaborative, unified team, with standardization and accountability, as it became part of a

Utilization Management 360â approach.


This project initially started with conversations including Revenue Cycle Management and

Physician Leadership to outline specific goals and objectives. The Utilization Management 360â

approach looks at the complete spectrum of a patient episode of care beginning with the initial

review for appropriate level of care all the way to the results of submitting a correct claim. There

are typically five major components to the Utilization Management 360â concept:

1. Utilization Review (UR)

2. Integrated Care Management (ICM)

3. Clinical Documentation Integrity (CDI)

4. Physician Advisor (PA)

5. Coding/Compliance

Aspects of the project included:

1. Interviews with Key Leadership in their defined roles and also individual and group

interviews of staff and managers

a. Questions were developed and standardized prior to the interviews

2. A randomized 25 chart selection for review of documentation quality for medical necessity,

coding, and level of care decision making

a. This was extremely important in the Surgical and Orthopedic areas

3. Extensive data reviews were conducted for physician engagement in the Utilization Review

process including:

a. Physician responses to remote and onsite Physician Advisor reach-outs for

additional clinical information for level of care recommendations

b. Timeliness for completion of VPMA reviews, second level and Conditions of

Participation (CoP) required reviews for level of care downgrade compliance with

Condition Code 44

i. There was a need to see if this should be removed from the VPMA’s


c. Review overall process for completion and number of Condition Code 44’s and

Condition Code W2’s which can have significant impact on receipt of appropriate

revenue for services provided

4. Areas for improvement


1. In this system, Utilization Review is a centralized process that uses Interqual Criteria for

first level review across the entire system. Following a compliant process, when a patient

does not meet criteria, the case was sent to a Physician Advisor (PA) for a second level

review. Presently they use a remote service for these reviews and one Onsite Physician


a. Approximately 85% of the time the initial physician order was correct for the level

of care (LOC) based on first level reviews requiring no further action

b. For those cases requiring a second level review, the PA would reach out to the

attending physician for additional information to make a recommendation for LOC

i. This typically happens for an Observation (OBS) case

ii. 62 – 74% of the time where the attending physician responds to the PA

reach-out, there would be enough information provided to upgrade the

patient to Inpatient

iii. Over a one year period, throughout the system, there was a 37 – 80% “no

response” rate from the attending physicians for these reach-outs

iv. In Medicare FFS, if a patient is kept in Observation, but might have

qualified for Inpatient and this mistake is made once a day, the annualized

revenue loss is $745,330 – $1,719,880 based on the delta between Medicare

reimbursement for OBS vs. IP across the system

1. If this happens more than once a day, the multiplication factor is

obviously higher

2. In addition, there is an increased financial burden to the Medicare


v. If 50% of the “no response” referred observation accounts could be

converted to inpatient, based on the conversation between the physician

advisor and attending, there would be an annualized increase in revenue of

$79,148 – $239,152 depending on the facility.

2. On occasion a patient with an initial order of IP is downgraded to OBS based on the review,

which results in a Condition Code 44 situation and this change of level of care must be

accomplished prior to discharge

a. According to the Conditions of Participation (CoP) this requires a UR physician to

get involved if the attending physician agrees and this is relegated to the VPMA of

the appropriate facility in this system.

b. If the attending physician disagrees, two (2) UR physicians must get involved

c. Frequently it was found that these decisions were delayed significantly, and after

discharge, resulting in a Condition Code W2 and a potentially non-compliant


d. Both situations result in decreased Medicare FFS reimbursement for that episode

of care

3. Integrated Care Management (ICM) was found to lack standardization, accountability,

integration, understanding of their roles, and an overarching understanding of the role of

Utilization Review. Also, a previous consultant had recommended that ICM only get

involved with 65% of the patients. This was instituted without explanation to the staff and

left a potential gap in continuity of the navigation of care for all patients. Also, it was

identified that ICM staff was responsible for clerical tasks that interfered with their ability

to complete their duties.

4. Since this is a multi-hospital system, each facility had its own UR Committee, and Plan.

There was no uniformity in Committee meeting protocols and reporting.

5. Clinical Documentation Integrity (CDI) was a siloed department with its own manager

reporting to Nursing, operating independently of RCM. The manager was astute enough to

get away from a task-based environment and move towards outcomes, resulting in

accuracy, reducing denials, and increasing revenue preservation.

6. The chart review revealed inconsistencies in the knowledge-base for medical necessity

determinations, capacity, timeliness, willingness to perform these duties, and knowledge

of Federal Rules and Regulations to be providing consistent, compliant, timely, and

appropriate, defendable LOC recommendations from VPMA’s regarding Condition Code

44 reviews.

7. There was already an OSPA pilot project in place with some of the following duties and


a. Provide second level reviews for that facility as needed

b. Physician response rates were increased by 91% compared to the remote teams

c. Worked collaboratively with UR, ICM, and CDI

d. Increased physician relationship building

e. Participated in the UM Committee and other committee

f. Provided standardized physician education opportunities


1. Establish a system-wide onsite PA program (OSPA) with the remote service as backup for

times when the onsite PA(s) is/are busy or not available. Historically, communication with

attending physicians with remote PA’s for second level reviews has been poor for

numerous reasons as outlined. Onsite Physician Advisors can develop professional

relationships with the medical staff and tend to have better communication as they are

known by the docs.

a. Establish standardization and accountability throughout the system-wide OSPA

program as these two elements were of significant importance to Revenue Cycle

Management. Along these lines, what will be important to this goal was to outline

a program where physician advisors received the same training, utilized the same

logic for making second level recommendations, with consistent, sustainable,

defendable, and uniform recommendations. The Onsite PA would be accountable

to the management of that entity, the facility VPMA, and RCM of this healthcare

system and held to reportable metrics.

2. Establish a standardized system for notification of downgrades in accordance with

regulations, CoP.

a. Notifications must be given to the patient, physician, and facility

b. Will involve timeliness of 2nd UM physician agreement to be done prior to

discharge when possible

c. Will reduce CC 44 and CC W2 rates, potentially increasing revenue

3. Rebuild the Integrated Care Management from the top down, starting with leadership.

a. Encourage leadership to shadow their staff to learn what their duties included

b. Focus on outcomes achieved, not tasks performaned

c. Standardize duties, look at staffing and patient ratios

d. Identify areas of focus, such as Length of Stay, avoidable days

e. Utilize clerical staff to allow other staff to function at the peak of their license

f. Become unit based, not outlier based

g. Provide standardized interdepartmental training, not necessarily in depth but

overarching for understanding

4. Standardize UR Committee Meetings

a. Uniformity of the overall agenda

b. Individualization for the needs of the community of that facility

5. In accordance with the UM360 concept, bring CDI under the purview of RCM. This was

actually in progress during this project

6. Establish a Best Practice System-Wide Onsite Physician Advisor Program

a. Utilizing processes established from the OSPA pilot, outline a 5 year plan for

establishing an OSPA program for each of the other facilities including:

b. Ongoing evaluations

c. Standardized training

d. Accountability metrics

e. Assisting with hiring appropriate individuals

f. Onsite onboarding initially and providing continuing mentoring and management

Program Results:

This is a project that is still a work in progress. Recommendations have been delivered and

programs to put them in place are underway. The pandemic has caused deliverables to be delayed

but Leadership is planning on moving forward in a shorter period of time than recommended in

the Report.

To date:

1. The extensive report delivered outlined the steps needed to proceed towards the end goals

and will be utilized as the framework for improvement

a. The recommendations listed above are the highlights for breaking down the silos

b. This saved valuable time to get started

2. Onsite Physician Advisors have already improved response rates to reach outs for

additional information required for second level reviews and level of care changes

a. Will help with improving net patient revenue

3. Budgeting and hiring and training of the next set of Physician Advisors has started

4. CDI has been brought under the umbrella of Revenue Cycle Management

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