Half Way Through 2013

As we approach the midpoint of 2013 and attempt to carve out time for all that is required of us, both personally and professionally, here are a few thoughts:  In sixteen months the most significant change in revenue management will occur with the conversion to ICD-10.  Although we expect that most coding teams have a plan in place to learn the new system, there is growing evidence that our physician partners have not invested the time to understand the critical role documentation will play in a successful transformation.  During the past three years many hospitals have invested their change management capital to install electronic medical records. This has left many of medical staff members exhausted and not eager to engage in another major initiative.

As revenue management professionals, we need to review the lessons from the changes associated with the introduction of severity adjusted DRG’s.  Medicare, in its bureaucratic wisdom, anticipated improved coding and preeminently reduced payments.  Some organizations benefited and many lost reimbursement.  The drivers were items such as discharge status and the number of medical impressions documented and then coded.  The ICD-10 conversion will have similar characteristics and the importance of documentation coordinated with the multiple column structure will be critical.  The question on the table this summer will be, “is sixteen months adequate to reorient our medical staffs to the new documentation reality?”

Another disruption in our well-ordered business lives is the growing presence of firms focused on repricing our services and “saving” their clients thousand of dollars.  If we have been in the business for a few years, chances are this is not a new challenge; however, the gap between charged and collected revenue has continued to grow each year with our annual retail price increase.  This gap, which can exceed 75% for some hospitals, has exposed the hospital as a target for criticism – as the public has limited understanding of how price strategy works.  This is not a simple problem; but it may require focused consideration on whether the current price strategy is sustainable.

With these thoughts, we sincerely hope that the summer brings every reader days of productivity as well as moments of peace, relaxation and shared family experiences.


By Jack Duffy
Executive Vice President

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