Four Ways to Measure an Electronic Health Record Transition’s Effect on Revenue Cycle

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As your practice transitions to using an electronic health record system, track key metrics to ensure your revenue cycle management stays on track.

Gone are the days when the good ship Healthcare Practice floated on a sea of paper. Today, most of us work with electronic health record (EHR) systems to do everything from access patient information to streamline lab testing.

As of 2012, 72 percent of physician offices used EHR systems. That’s up from less than 50 percent in 2009, when the Health Information Technology for Economic and Clinical Health (HITECH) Act was passed, providing incentives from Medicare and Medicaid to organizations that made a commitment to “meaningful use” of technology and adopting EHR systems.1 Since the 2012 data, we’ve certainly noticed even more healthcare entities adopting EHR systems and upgrading from older ones to new systems.

We worked with a Nevada clinic to help it transition from paper records to an EHR, and another practice as it went from one cloud-based EHR system to another that better suited its needs. Since these were already clients of ours, we were in a position to warn them that EHR migrations often result in unplanned revenue cycle disruptions. Outbound claims can stagnate as staff undergo training and learn the new system. Everyone’s emphasis on revenue optimization can falter as multiple departments prepare for migrating from paper to EHR, or from an existing EHR to a new one.

So you’ve worked with a revenue cycle management and practice management consultant to create a clear implementation plan, double-checked the workflow, trained your users, conducted initial testing, entered existing patient data, conducted a pilot test. You’re ready to go live. Now, instead of worrying whether it’s affecting your revenue cycle in unseen ways, track four key metrics to measure your cycle’s health during the transition.2

Four Metrics to Assess Revenue Cycle Health During an Electronic Health Record Transition

We help our clients track a lot of crucial metrics, but there are four that we highlight when we assist with an EHR implementation or transition. Because the transition process affects every level of your organization — administrative, technological, financial and cultural — you must have a measurement plan in place so you can see if there are related revenue cycle disruptions, and if so, isolate and address them.

  • Service-to-payment velocity: Also known as the “payment waterfall,” this deceptively simple metric evaluates how long it takes your organization to get paid after rendering service. Not all existing tools will allow you to track this, but if your billing system does, work with your in-house billing experts or your billing consultant to set up tracking for payment flow. This can show you the time you’re spending on each stage of the claims cycle, helping you keep your cash flow fluid.
  • Days not final billed (DNFB): Also known as “discharged not final billed,” rising DNFB can be a sure sign of disruption from an EHR transition (and also a revenue cycle management red flag in all contexts). If you’re using a standard three-day account threshold, then an increase in DNFB that cannot be attributed to credentialing delay should be pinpointed to somewhere in your organization. We’ve seen cases where clinicians delayed or did not complete their medical documentation due to confusion over how to use a new EHR system, as well as issues with coders and new EHR systems. Both issues can be addressed in discrete steps to lower DNFB.3
  • Charge rate: Clinicians might be the most affected by an EHR implementation or migration. Since system changes can be highly disruptive to your clinical department, make sure you’re paying close attention to related metrics. For instance, the charge rate, or speed with which your clinical department is submitting charges, can tell you right away if there’s a problem that might delay claims and, therefore, revenue.4
  • Denial rate: Cash flow is your highest priority when you’re moving EHR systems. Any disruption in cash flow can be magnified when your entire organization is still in the process of learning the new system, so make sure that you are prepared with alerts for timely billing thresholds to keep claims moving through your system. Your denial rate should remain steady during your EHR transition, based on your organization’s baseline and your optimum percentage (research shows that the “average” denial rate in the industry is anywhere between 5 and 25 percent).5 Any jump here should prompt investigation into the exact causes and whether they show a problem with your EHR implementation plan.

The data shows you will reap a lot of revenue cycle benefit from implementing an EHR system or migrating to a more effective one, including better patient care, improved patient outcomes and care coordination, cost savings and increased efficiency.6

As we told our Nevada clients and all healthcare organizations we work with on EHR transitions, it’s important that you take the time to do so properly. Don’t rush the process out of fear of disrupting your revenue cycle. Rather, take your time, monitor your revenue cycle through your billing metrics, and have contingency plans in place to adjust elements of your EHR transition plan if your data shows any revenue red flags.

Physician Revenue Navigators is a leading healthcare revenue cycle management partner. We support healthcare organizations of all practice types in all aspects of a healthy revenue lifecycle, including workflow review, practice management, staff searches, credentialing, medical billing and A/R work, medical practice bookkeeping, and accounts payable. Contact us to learn more about we can assist your organization with maintaining healthy revenue during an EHR transition or any other revenue lifecycle matter.

Show 6 footnotes

  1. “Use and Characteristics of Electronic Health Record Systems Among Office-Based Physician Practices: United States, 2001-2012,” Nov. 6, 2015, http://www.cdc.gov/nchs/data/databriefs/db111.htm.
  2. Health Resources and Services Administration, “How to Implement Your EHR System,” accessed Feb. 25, 2016, http://www.hrsa.gov/healthit/toolbox/healthitimplementation/implementationtopics/implementsystem/implementsystem_4.html.
  3. “Refine the Terms: Understand Unbilled Accounts and DNFB,” HIM-HIPAA Insider, March 27, 2007, http://www.hcpro.com/HIM-68542-865/Refine-the-terms-Understand-unbilled-accounts-and-DNFB.html; Dom Nicastro, “Don’t Let DNFB Cripple Hospital Cash Flow,” Jan. 23, 2013, http://healthleadersmedia.com/page-1/COM-288541/Dont-Let-DNFB-Cripple-Hospital-Cash-Flow.
  4. “Managing the Transition from Paper to EHRs,” AHIMA, accessed Feb. 25, 2016, http://library.ahima.org/xpedio/groups/public/documents/ahima/bok1_048418.hcsp?dDocName=bok1_048418.
  5. Jacqueline DiChiara, “Quantify Denial Rates for Smooth Revenue Cycle Management,” RevCycle Intelligence, March 30, 2015, http://revcycleintelligence.com/news/quantify-denial-rates-for-smooth-revenue-cycle-management.
  6. “Benefits of Electronic Health Records (EHRs),” HealthIT.gov, accessed Feb. 25, 2016, https://www.healthit.gov/providers-professionals/benefits-electronic-health-records-ehrs.

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