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Changes to healthcare payment and reimbursement over the past several years have resulted in an increased demand for services and a higher percentage of uninsured patients. Add this to the intense scrutiny of government payors and the expanded role of the patient as a consumer and hospitals find it increasingly difficult to collect accurate and prompt payment for services provided.

Memorial Hermann Healthcare System is the largest non-profit healthcare system in Texas and serves the greater Houston area with 11 acute care hospitals. As a large network of affiliated physicians and numerous specialty programs and services, Memorial Hermann is one such hospital system facing this challenge.

When Memorial Hermann’s revenue cycle team identified significant revenue loss, they sought a partner with best-in-class technology that could help the system achieve its revenue integrity goals. Memorial Hermann chose MedAssets to implement multiple solutions to enhance its financial performance.

According to Memorial Hermann Chief Revenue Officer Jeff Brownawell, the choice was simple. “MedAssets understands the hospital business and the financing of healthcare and how everything works,” said Brownawell. “MedAssets has developed scalable products that work with our
existing systems and make our revenue cycle work better.”

Memorial Hermann was an early adopter of MedAssets chargemaster tool, so all CDM descriptions and coding information were complete and compliant. All chargemaster maintenance is accomplished through CDM Master which interfaces with Memorial Hermann’s patient accounting system on a weekly basis. This level of consolidation and oversight insures the chargemasters across the system maintain the high quality and standardization that the revenue cycle team has worked hard to achieve. Similarly, Memorial Hermann works with MedAssets to update prices that achieve net revenue goals inside a defensible and competitive framework.

Next, Memorial Hermann implemented MedAssets Charge Capture Audit solution, CCA®, to ensure consistent charging and defensible pricing. The system performs an automated review of all itemized bills to identify potential missing charges based on the services performed. This provides a more accurate and complete bill to the payor, eliminating the need to re-bill due to late charges and improving revenue capture and net revenue results. Financial improvement from Charge Capture Audit totaled more than $2.4 million gross in 2010.

“MedAssets offers broad experience with all aspects of chargemaster and pricing management,” said Memorial Hermann System Executive for Revenue Operations, Decision Support and Medicare Profitability Helen Powers. “MedAssets has worked with us closely, migrating our chargemasters to be defensible and price competitive in an environment where transparency is key and consumers compare healthcare services for their elective procedures.”

“This is a massive undertaking and to be successful, you must have a clear vision of what you’re trying to achieve and where you want to be at the end,” noted Powers. “My objective was to have a defensible chargemaster that yields the necessary net revenue for the organization. To accomplish this goal, it is important to develop and consistently execute a well-defined and structured plan of action.”

For additional systemic improvements across the revenue cycle, Memorial Hermann used MedAssets claims management solutions to improve its billing processes and net revenue performance. Memorial Hermann’s objectives included addressing its first-pass percentage rate of claims, improving process workflow and reducing accounts receivable days.

“These are good products that we depend on to make sure we are billing as quickly as possible and collecting cash as quickly as possible,” added Brownawell. “But we still must follow the rules and regulations of the federal government and all our payors.”

As a result of the accuracy improvements, Memorial Hermann has seen increases in patient and payor satisfaction levels: patients question charges less often and payors process claims more efficiently. In addition, the organization’s commitment to quality care has been recognized on a national level. Memorial Hermann received the 2009 National Quality Healthcare Award from the National Quality Forum, which recognizes meaningful, sustainable quality improvements in healthcare.

“MedAssets revenue cycle solutions made immediate and substantial impacts for the system,” said Memorial Hermann System Executive, Patient Business Services Michael Bennett. “Financially, the improvement in our days in accounts receivable yielded tremendous cash infusion. Operationally, our revenue cycle managers have a broader scope to work with and, as a result, a greater sense of accountability throughout the entire revenue cycle.”

Six months after implementing MedAssets claims management solution, Memorial Hermann realized a 17 percent reduction in accounts receivable days while clean claims increased to 73 percent from virtually zero percent, results that have since remained sustainable. Memorial Hermann also implemented Medicare Direct Claims Management capabilities and expects to improve the accuracy of Medicare processing, accelerate Medicare cash flow and improve the audit trail and accountability for Medicare processing.

“We rely on MedAssets solutions to help us stay up-to-date, send out bills on a timely basis and keep our days in A/R down,” said Brownawell. “Add MedAssets optimization product to this process and we know that Memorial Hermann’s revenue cycle is operationally efficient and helping the system collect for the healthcare services we provide.”