Greg Snow is vice president of revenue cycle at Geisinger Health System, an early participant in an HFMA task force on patient-friendly billing that is requiring a complete overhaul of financial systems and processes at the integrated delivery network. The Danville, Pa.-based system includes three acute-care hospitals and more than 40 physician offices and clinics.
We actually got started in September or October of 2005, Snow says. What we said was, What do patients really want to see? What theyre concerned about is whats coming out of their pocket.
Geisingers goals, Snow says, are to be able to show what a patient would pay out of pocket before they check in and to do everything in advance from an administrative point of view, so everything you do when you come in is clinical.
Snow says no single software vendor offered a system that could do all of the tasks Geisinger needed. He described a system using multiple software applications pieced together in some places with computer interfaces and in others with sneaker ware, i.e., human labor.
Right now, a lot of it is done manually, Snow says. We dont have the complete system in place. What were ultimately looking to doit should happen within the next six months to a yearis to be able to guarantee to a patient what (their) out-of-pocket expense is going to be.
At Geisinger, the first step is to verify coverage and benefits, Snow says. Geisinger developed its system in conjunction with a third-party vendor to take patient information from the hospitals scheduling and orders software, check eligibility and determine patient benefit levels, run that information through the hospitals contract management system and then price the services and calculate who pays what.
Anywhere from two days to 30 days in advance, we will take all these appointments and verify all of the benefits in a batch mode, Snow says. Were not only verifying coverage, but were verifying benefit levels. Thats a big deal. Do you have secondary insurance and what are the terms of secondary coverage? One of the drawbacks is that most plans will provide you with a confirmation of benefits, but they wont tell you the status of their (members) deductible and how much of that is left today, $500 or $1,000. That is problematic.
Emergency department patients account for 40% of hospital admissions at Geisinger, Snow says, so for them, We have a same-day process set up. We use pieces and parts of the system to do the administrative work from the ED.
Overall, he says, Were doing well with the inpatient parts of things. The outpatient component and the physician piece create issues. We have 700 physicians. Thats a pretty substantial workload. There is no issue on the physician contracts, its more of a volume play, and its harder to predict what the services will be. If someone comes in and says, Im having a right knee replacement or a hernia operation, for the last two years I can tell you exactly what my average costs have been. With the contracts, we can get very accurate.
The system is not nearly as effective with more complex cases, Snow says. When you come in with an undiagnosed illness and we start running tests, thats when we get into problems.
Are we there 100%? No, says Snow, who estimates that 65% to 70% of Geisinger hospital patients receive estimated bills in advance of treatment. By frontloading a patients complete financial picture into the system as early as possible, it gives the hospital time to respond to the patients financial needs, Snow adds.
Over the last few years the number of (uninsured) people with incomes of $50,000 a year has increased by 155%. If a person is making $50,000 a year and we know that in advance, we can make other arrangements. We can say, Lets talk about discount plans, charity care or payment plans. Were trying to make it a competitive advantage by offering services that are more patient-centric.
Developing the system was not cheap, so Snow knew that measuring return on investment was criticalnot just squishy, anecdotal estimates that are typical of clinical IT projects.
If you add, like in our case, 125 people (employees), obviously there are costs associated with that investment, Snow says. I was looking for something that was ironclad to measure. That turned out to be claim-rejection rates. Before the program, the Geisinger rejection rate was around 5%; today, it is less than two-tenths of a percent, Snow says.
When you take that on net revenue off
$1.8 billion a year, thats a substantial amount of money, he says. We estimate that our improvement to net revenue from this program is a little over $20 million a year, and the cost of the program is $5 million a year. Thats 4-to-1 on just rejections. It doesnt take into account reduced expenses from not having to redo claims. It doesnt take into account (improved) patient satisfaction.