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Single Billing Office Planning & Design
By Brad Boyd
Brad Boyd is president of Culbert Healthcare Solutions in Woburn, MA.
Consolidating professional and hospital revenue cycle functions into a centralized Single Billing Office structure presents several benefits. The most significant include:
- Enhanced patient experience through the reduction in statements and simplification of customer service.
- Reduction in statement costs.
- Improved self-pay collection performance.
- Staffing and operational efficiencies.
The ability to capitalize on these benefits is largely dependent on an organization’s ability to manage risk associated with organizational change. An effective planning and design framework involves three separate but integrated planning activity components.
The first step is for an organization to conduct an SBO risk and readiness assessment. Based on the findings of this analysis, an organization is better prepared to determine the scope of their initial SBO capabilities. This is known as the SBO design. For many organizations, SBO represents the consolidation of patient statements and the centralization of customer service operations. Professional and hospital billing teams remain separated, with two separate leadership teams, typically reporting up to one revenue cycle executive representing the health system.
At the other end of the centralization spectrum, some organizations fully integrate their billing teams into one cohesive entity responsible for claims submission, denial management, A/R management, revenue integrity, self-pay, and customer service. This involves a greater degree of transformation – the benefits and risks of which need to be fully understood and planned for in the design process. The final step, the SBO implementation roadmap, coordinates all implementation tasks into a comprehensive execution plan.
The intent of this post is to share lessons learned and highlight tactics that have assisted organizations in effectively aligning their SBO initiative with the strategic goals of their institutions. A thorough planning process is necessary to effectively mitigate the various risks in order to enhance both patient satisfaction and financial performance.
What follows is a best-practice approach for successful SBO planning and design.
Step 1: SBO Risk & Readiness Assessment
The goal of an SBO risk and readiness assessment is to clearly identify and understand the variances, or gaps, between professional and hospital revenue cycle operations. These gaps must be addressed to diminish disruptive change and decrease risks to ensure a successful transformation effort.
There are four key risk areas to assess and evaluate:
- People: R the current state of hospital and professional billing team sizes, structure, job descriptions, compensation plans, and competencies to support current operations and future-state SBO requirements.
- Process: Review of processes, policies, and procedures related to hospital and professional billing operations.
- Technology: Conduct a high-level review of the system build that supports self-pay management and customer service (i.e., workqueue design, clearinghouse capabilities, real-time eligibility, including propensity to pay and payment estimation tools), and any additional third-party solutions supporting the organization’s revenue cycle systems.
- Culture: Conduct a cultural assessment to determine the organization’s ability to adapt to change.
The risk and readiness assessment should result in a formal document that includes the following:
A. Current-state assessment of professional and hospital billing operations:
- Revenue cycle-related policies and procedures (small balance write-offs, payment plans, partial payment allocation methodologies, GL reconciliation, etc.).
- Job descriptions including compensation plans, staff management structure, staffing levels, and competency.
- Self-pay related workflows – particularly as it relates to the POS collection initiative. Examples might include pre-arrival, financial clearance, calculated patient cost sharing obligations prior to patient arrival, and notifying patient in advanced patient notifications by front office staff. These activities align with overall revenue cycle operations. They also align with new system POS collection policies and the executive vision and goals.
- Billing system setup and functionality to support self-pay management including workqueue design, account prioritization algorithm, clearinghouse capabilities, and real-time eligibility, including propensity to pay and payment estimation tools.
- Customer service operations (i.e., hours of operation, telephony, third-party technologies, etc.).
- Banking relationships and lock-box structure.
- Use of third-party collection vendors.
- Statement design.
- High-level review of other billing and A/R management workflows.
B. Gap analysis to evaluate the degree of variance between policies, procedures, workflows, and staffing structures between professional and hospital billing operations.
C. Risk and readiness assessment.
Step 2: SBO Design
After completing a review of the current state and completing the risk and readiness assessment, the next step is to develop a recommended future-state organizational SBO structure. This will include key design recommendations related to the following areas:
- Scope of services to implement at SBO module go-live.
- Statement design.
- Partial payment allocation methodology.
- Standardized policies and procedures.
- Staff productivity levels.
Most organizations enter the SBO planning process with one of two principle definitions of SBO – centralized self-pay management and customer service, or truly integrated hospital and professional billing operations. Both approaches provide benefits and risks. Many health systems have taken an incremental approach to SBO consolidation, initially focused around self-pay and customer service centralization. However, the risk and readiness assessment is a valuable process for organizations to make initial SBO design decisions that lay the foundation and provide the flexibility for future consolation and centralization opportunities.
Step 3: SBO Implementation Road Map
The implementation roadmap should include major tasks and milestones, resource requirements, and timeline. It should incorporate the following areas:
- Internal and external communications strategies.
- Staffing levels and management structure.
- Technology configuration (revenue cycle systems, telephony, third party tools).
- Integrated test plan.
- Training strategy and user proficiency requirements.
- Change management program.
Medical Group Considerations
The benefits of an SBO are real, particularly improvements to the patient experience and self-pay yield. The major concern of medical group leadership and physicians involves partial patient payments, including point of service patient payments collected within a physician practice, being applied to larger hospital balances. An effective SBO design process mitigates these concerns through the establishment of effective governance, and by designing a partial payment allocation methodology that incentivizes the collection of patient balances within physician practices. Typically, the location which collects the cash receives full credit for that payment before any funds are allocated to other balances. Not only does this incentivize practices to collect patient responsibility at the time of service, but it is also an effective tactic for alleviating the loss of autonomy over an increasingly expanding portion of the overall revenue cycle.
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