Becker's Hospital Review

44 Executive Briefing Sponsored by: Keys to Painless Conversions: Transition Services and Best Practices to Prevent Disruption and Return to Baseline P reparing for a conversion of any kind is no small task. But coordinating a conversion that involves transitioning patient accounting systems must include specific fiscal, cultural and operational considerations. When these aren't accounted for ear- ly in the preparation process, organizations can run into cash flow problems later that set collection rates back by several months. However, with the proper fiscal planning, staff engagement and executive support, healthcare organizations can minimize their financial risk and more quickly return to, or exceed, base- line performance. Few know this better than conversion-veteran Joe Koons, man- aging director of revenue cycle for Centra Health, a regional nonprofit system in Lynchburg, Va. Since August, Mr. Koons has led efforts to prepare Centra's revenue cycle departments for conversion to Cerner's patient accounting system, slated to go- live March 2018. Centra's size has made planning a conversion particularly com- plex. Centra provides medical services to patients across a geo- graphic area roughly the size of New Jersey. Its diverse portfo- lio spans the full continuum of care, including four acute care hospitals, more than 50 ambulatory and long-term facilities, a freestanding ER and a 300-physician medical group. The health system recorded $1.1 billion in net revenue in 2016. Centra also oversees a burgeoning health plan covering more than 45,000 residents in south-central Virginia. "The amount of resources behind a conversion of that size is daunting," Mr. Koons said. "The complexity of the system is at the degree where there are lots of different bill formats and unique requirements that have to be considered ... and coordi- nated with the different clinical workflows." Many hospitals pursue IT conversions to enhance system interop- erability, improve workflow efficiencies and gain tools to manage a more complex care environment. Although C-suite leaders gen- erally agree the long-term benefits of conversion outweigh the short-term challenges of implementation, a mismanaged conver- sion can have severe financial consequences that limit an organi- zation's capacity to function, and may even affect patient care. Having realistic expectations of how a conversion will affect day-to-day processes can help revenue cycle leaders take ini- tiative to mitigate financial risk, Mr. Koons said. This article ex- amines the potential financial effects of a conversion, as well as four key steps Centra Health took to address and minimize financial disruption. Tactics to mitigate financial disruption during conversions A patient accounting system (PAS) conversion involves the gradual transitioning of workflows from a legacy system to the current system while maintaining day-to-day operations. "The internal operation has to continue to move forward [during conversion], so it's a juggling act between maintaining current operating performance and standing up this new system that's going to replace all the current workflow," Mr. Koons said. This juggling act between systems can reduce productivity and in- troduce opportunities for financial information to slip through the cracks. Missing claims, missed revenue capture and late patient billing can result in fewer collections and slower collection rates. Hospitals with particularly bumpy conversions can see baseline collections fall 195 percent below baseline performance — equiv- alent to two months' worth of collections — within nine months of implementation, according to a 2016 Crowe Horwath study. Even hospitals with middle-of-the-road conversions have seen noteworthy disruption to revenue cycle operations, according to the Crowe Horwath study. Hospitals' average benchmarks for key performance metrics within one month of implementation included: a 10 day increase in days in accounts receivable, from 52 days to more than 62; an 86 percent increase in days-not- final-billed; and a 21 percent decline in collection rates. Although these metrics may appear discouraging, there are four key actions hospitals can take to mitigate — and possibly eliminate — the negative financial consequences of conversion, Mr. Koons said. 1. Create a revenue cycle governance structure. To minimize disruption, Mr. Koons recommended organizations establish a governance framework to ensure revenue cycle KPIs continue to meet pre-conversion benchmarks. For example, Centra established a reporting structure consist- ing of three management tiers to monitor day-to-day opera- tions as well as high-level strategic progress. Centra's first process management tier — the revenue cycle action team — consists of directors from revenue cycle depart- ments as well as project leaders from Cerner. The action team is responsible for monitoring a laundry list of performance met- rics at a granular level, such as gross and net days in A/R, cash as a percent of net revenue, DNFBs, denials, partial denials and A/R aging by 90 days by payer, among others. If KPIs deviate from the expected rates, the action team notifies second tier management and executes corrective measures to get the de- partment back on track. The second and third tiers — the revenue cycle finance steering committee and revenue cycle advisory committee, respectively — examine and discuss high-level implementation strategies and initiatives to ensure a smooth transition. For instance, the adviso- ry committee considers and monitors costs associated with con- version scope, ensuring the project doesn't overrun its budget. "The framework is in place to ensure the scope of the conver- sion doesn't balloon to the point where it jeopardizes or puts the project, or the organization, at risk," Mr. Koons said.

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