Success story: Advocate Health Care
Centralized business office (CBO)
Centralized business office (CBO)
With a network that includes 12 acute-care hospitals and more than 250 sites of care, Advocate is the largest health system in Illinois. Its hospitals are spread from the Chicago area to downstate Illinois.
In November 2013, Advocate opened a shared center to centralize and standardize revenue cycle operations among the hospitals in its network.
Ultimately, nearly 400 employees scattered among the 12 hospitals would work within the new facility.
Processes and systems as fragmented as the 12 individual business offices contributed to a surprising amount of revenue leakage.
With an eye toward remedying these inefficiencies and inconsistencies, Advocate chose Xtend to help develop improved, standardized processes and train the staff of the new CBO.
Under the direction of a dedicated project management team, Xtend began working on all aspects of the project — beginning with identifying a site.
Using analytics, the firm examined metrics, account volumes, and clean claims rates to calculate the number of staff members that would be needed for billing, follow-up, denials, underpayments, customer service, and all of the other functions that Advocate wanted the CBO to handle. Then, in keeping with Advocate’s commitment to offer all of its Chicago-area business office employees a position at the new CBO, the Xtend team created an efficient new organizational structure that worked for the existing employees, while also identifying employees who could transition into new roles.
Next, after reviewing all of Advocate’s technology, Xtend identified solutions that could harness the different systems that had been set up for individual hospitals in order to streamline the work of the CBO.
Xtend also optimized and standardized processes that had evolved on a hospital-by-hospital basis within the Advocate healthcare system. For example, each hospital’s business office had enjoyed local authority to write off accounts it deemed uncollectible. The Xtend team determined that some collectible amounts were simply written off automatically to contractual allowances.
Xtend helped design and implement policies to centralize writeoff authority and to eliminate automatic writeoffs. The team also helped Advocate realign its business office personnel, so that individuals became responsible for payer classes throughout the system’s A/R inventory rather than for specific hospitals.
Finally, Xtend put in place systems that captured denials and rejections — giving Advocate the ability for the first time to document, report and track revenue and performance by financial class. As a result, Advocate staff could drill down to the level of the individual collector, find specific reasons for denials and rejections, and do something to reverse them.
With fewer writeoffs, Advocate needed more staff to handle the higher volume of collectible accounts. Xtend brought in a team of interim revenue cycle leaders to support each of the 12 hospitals during the transition and to provide an outsourcing solution to work accounts older than 90 days. Denied claims, once identified, were routed to dedicated specialists, who worked groups of related denials as a batch instead of as one-offs, saving time and driving better results.
While Xtend’s teams helped resolve aging accounts, other Xtend personnel led process teams comprised of business office staff from each of the Advocate hospitals. Together, they documented existing processes at the 12 facilities and then designed new, standardized process flows to be used in the CBO. The collaborative approach helped create buy-in among the Advocate staff and prepared them to train others.
During the transition, Advocate was able to keep A/R at traditional levels and maintain cash collections, while freeing up the individuals who needed to be involved with building the CBO and with creating new groups that facilitated revenue integrity.
Thanks to new processes and technology, the CBO’s staff has improved its productivity to handle great volume, collecting more accounts before they age out.
During the first year after the CBO opened, Advocate found that it had successfully reversed $100 million in revenue leakage.