By Tina Eller, vice President of Revenue Cycle Management, sutherland healthcare solutions. The Challenges for Providers Today

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1 Point of View Point Of View: The Relationship Between Automation and Bottom Line Results Applying Lessons Learned in Other Industries to Healthcare Providers Bottom Line By Tina Eller, vice President of Revenue Cycle Management, sutherland healthcare solutions Case in Point: By automating their billing and collection processes, a large Texas health system increased cash collections by $87 million over a five year period. The Challenges for Providers Today The challenges in today s provider landscape are real, and they are growing. Provider organizations face shrinking margins, rising costs and increasing demands for outcome improvements. But while sectors as diverse as the mortgage industry and retail sales have met financial and competitive challenges by deploying increased automation and state-of-the-art analytics, provider organizations within the healthcare industry have often lagged behind. Provider organizations face a variety of unique demands - everything from the implementation of electronic health records (EHRs) to the acquisition of new clinical equipment. But the successful use of automation by other industries can serve as a template for healthcare providers seeking to address these demands. By automating processes throughout the care continuum, provider organizations can reduce touchpoints, decrease administrative overhead, improve the patient experience and lower costs. And the automation protocols and analytic tools that provider organizations need to improve quality and bolster their bottom line are already producing results in other industries. How Other Industries Use Automation Automation is already deployed to meet the challenges of shrinking margins and increased competition in a wide array of industries outside of healthcare. For instance, a leading producer of aircraft components automated its accounts

2 payable processes and realized impressive results. The backlog of invoices awaiting resolution fell from approximately 7,500 to under 200. Invoices processed without manual intervention increased from under 20% to nearly 60%, and the number of FTEs needed to meet accounts payable functions was reduced by approximately 30%. Retail automation Retail sales has also taken advantage of the efficiencies and cost savings that automation generates. A major Canadian drug store with over 35 locations automated the monitoring, troubleshooting and optimization of its web-based, business-to-business (B2B) applications to quickly scale up and effectively support more than 300 pharmacies and convenience stores. As a result, it is now able to support more stores placing online orders while at the same time reducing the manual keying of orders at its distribution center by as much as 35%. It has also reduced the volume of calls to its retail support desk by more than 40%. Companies in the mortgage and credit card space have implemented solutions that save 10% to 15% in the first year alone. Mortgage and credit card industry automation and analytics The mortgage and credit card industries have also taken advantage of the improved customer experience and market advantages that automation provides. For instance, call center automation is prevalent in the mortgage and credit card industries as is the use of direct deposit, auto debit and variable interest rates that are built around the individual consumer s history and capacity to pay as determined by automated access to FICO scores. Automated rules-based processes Rules-based processes are also in wide use to increase efficiency and flexibility. Using rules-based processes, such as Visa Payables Automation, enables users to send approved accounts payable files to Visa or commercial banks. Visa can then process these files and adjust card limits so they align with approved invoice amounts. As a result, efficiency is increased at the same time that the user experience is improved and electronic tracking and reconciliation is simplified. The Healthcare Industry Providers within the healthcare industry have traditionally been an insular group. And all too frequently that continues to be the case. Outdated operating procedures remain in place, and manual, paper-based processes continue to be prevalent. But as both regulatory and competitive pressures increase, inefficient and costly legacy operations can no longer remain in place. To meet the mounting pressure to lower costs, improve care and get the most from every healthcare dollar, provider organizations must leverage automation and state-of-the-art analytics for both clinical and business processes. Innovations within healthcare While provider organizations have often failed to capitalize on the advantages of automation, the healthcare industry as a whole has not. For instance, many health plans have applied robotic process automation (RPA) to member data entry and validation functions. A number of health plans have also automated the loading of data into their claims system to enable auto-adjudication. Additionally, automated capture systems are being used to pull information from claim forms and load it directly into the health plan s mainframe systems, simplifying and streamlining tasks that were traditionally labor intensive manual processes. Health plans are also automating their credentialing processes, identifying

3 providers who are no longer in business, de-credentialed, or under license sanctions and automatically updating their systems. Finally, health plans are using automated processes to verify the completeness and accuracy of provider data, such as providers educational background, licensure status, and board certifications. Automated post-verification packages are then uploaded into the health plan s systems for further action. Opportunities for provider organizations While provider organizations have lagged in the adoption of automation and advanced analytics to centralize business processes and integrate systems, the savings and efficiencies they could realize by doing so are enormous. Tremendous opportunities exist for the automation of both front- and back-office functions. For instance, the automation of call center operations that is already prevalent in other industries can be quickly and easily applied by provider organizations to the central functions of customer service, records requests, and patient scheduling. But the use of automation and advanced analytics shouldn t end there. Cash flow and collections processes can be exponentially improved by applying the analytics already in use in the mortgage and credit card industries. Provider organizations should also incorporate analytics and automation to assess both the patient s propensity to pay and the patient s ability to qualify for Medicaid or other government-assisted programs. Credit history data can be easily automated and brought into the healthcare tent simply by accessing soft credit checks at the point of admission. And the automation of processes should extend to individual customers both within and beyond the provider organization s walls, ensuring outcome improvements and customer satisfaction through advanced wellness and loyalty programs as well as outreach campaigns that promote mindful healthcare consumerism. For instance, a paper focused on the advantages of revenue cycle management automation that was recently produced by GE Healthcare noted that, a hospital with $150 million in revenues [that] improve(s) its collections rate by just 1%...could realize enough funding to start a new capital project, or even protect itself in a down year. 1 Competing needs While mounting regulatory and market pressures are causing a growing number of provider organizations to recognize the importance of automation, many remain unable to commit to its implementation. Competing needs vie for scarce resources even as provider organizations struggle to meet the financial challenges that result from decreased reimbursement. Necessary but costly projects, from EHR implementations to the acquisition of clinical equipment and facilities improvements, demand investment. In light of this pressure, automation often seems like an expense that can be pushed down the road. However, targeted and specific automation expenditures can actually minimize the need for more costly financial outlays while providing immediate savings and improvements to existing infrastructure and systems. The Low Hanging Fruit Claims and billing process automation, robust edits, claims scrubbing and eligibility verification all offer an immediate opportunity for quality and efficiency improvements in the healthcare industry. But too often, claims are backlogged due to incomplete data, outdated information provided to overworked personnel, and the manual effort needed to research and verify provider and patient information. Automation tools employed by provider groups can quickly and cost-efficiently remedy these issues. 1 Automated Revenue Cycle Management: improving financial performance in uncertain times. GE Healthcare. Retrieved from: it.gehealthcare.com

4 Three Types of Automation 1. Scrubbing data to be clean Current technology can automate and integrate all aspects involved in adding both patient scoring and prompt pay discount set-up to the claims submission process, including cleaning and enhancing claim data. Provider organizations can minimize the cost and time associated with the claims intake process by taking advantage of image pre-processing, and forms classification. Additionally, advanced claim validation (ACV), exception data validation through multi-service analyses and EDI transmission can help maintain HIPAA compliance while easing system-wide integration of data and supporting file transfer and reconciliation processes. As a result, cleaner claims are submitted, speed of payment is increased, and pended claims are more quickly routed and resolved. 2. Accurate routing When the process for segmenting unpaid claims is automated, the payment success rate increases exponentially. The key to success is twofold. First, the process should ensure that the correct person with the correct skills works the correct account. Second, actions should be automated based on reason and remark codes. In today s complex reimbursement landscape, team members are most effective when they are focused on specialized exceptions. The right workflow management tool and design ensures enhanced resolution. 3. Auto generating secondary claims The secondary claims process can be very labor intensive. Claims have to be matched with the correct explanation of benefits (EOBs) and then mailed. By taking advantage of electronic processes to match the ERA information with the claim, a secondary claim can be generated with reduced sorting, either electronically - if the carrier accepts - or manually. Reallocating Resources. Remaining Competitive. When weighing the advantages of automation, it is important for healthcare organizations to consider not only immediate improvements in efficiency and savings, but also the longer term advantages to their overall operations. When paper-based claims processing and revenue cycle management operations are automated, opportunities for more efficient personnel allocations are created. Personnel who were once required for claims handling or billing operations can be reallocated to under-staffed areas. Personnel and savings advantages realized through process automation can also be used to support other improvement efforts. Personnel can be rationalized to free funds needed either for additional personnel in other areas - such as case managers to support quality improvements - or to support systems and infrastructure improvements such as an EHR implementation or the acquisition of clinical equipment. Additionally, organizations that already have an EHR system in place can gain the financial and systemic capacity to link EHRs to health assessments and other patient outreach tools, or to gather population-specific health data and use that information to aid case managers and inform both intake and post-acute transfer protocols.

5 About Sutherland Healthcare Solutions Sutherland Healthcare Solutions provides clients throughout the healthcare ecosystem with the consulting, business process outsourcing (BPO), information technology outsourcing (ITO), and analytics solutions they need to drive productivity, maximize efficiency and realize measurable results. For nearly 30 years, providers, payers, state and federal entities, and accountable care organizations (ACOs) have partnered with Sutherland to increase their competitive advantage through analytics-driven business process and technology solutions. And today, Sutherland Healthcare Solutions continues to provide cutting edge solutions to help clients innovate and grow even as market and regulatory pressures increase. In fact, a large regional hospital system on the east coast recently leveraged the experience and expertise that Sutherland Healthcare Solutions offers to analyze its full suite of front- and back-office operations. After performing a complete operational walk through, Sutherland Healthcare Solutions identified not only traditional back-office operational improvements but also improvements to the initial and ongoing patient experience. As a result, and in collaboration with the client, Sutherland Healthcare Solutions implemented consumer rewards programs and healthy lifestyle rewards programs more typically found in the retail sector. Most importantly, patient volume-and satisfactionmeasurably increased. To learn more about Sutherland Healthcare Solutions, please visit Sutherland Healthcare Solutions Sutherland Corporation registered in many jurisdictions worldwide. Other product and service names might be trademarks of or other companies. A current list of trademarks is available on the web at Copyright and trademark information at sutherland. com/legal/copytrade.shtml. This document is current as of the initial date of publication and may be changed by Sutherland at any time. Not all offerings are available in every country in which Sutherland operates. The performance data and client examples cited are presented for illustrative purposes only. Actual performance results may vary depending on specific configurations and operating conditions. It is the user s responsibility to evaluate and verify the operation of any other products or programs with Sutherland products and programs. THE INFORMATION IN THIS DOCUMENT IS PROVIDED AS IS WITHOUT ANY WARRANTY, EXPRESS OR IMPLIED, INCLUDING WITHOUT ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND ANY WARRANTY OR CONDITION OF NON-INFRINGEMENT. Sutherland products are warranted according to the terms and conditions of the agreements under which they are provided. Statements regarding Sutherland future direction and intent are subject to change or withdrawal without notice, and represent goals and objectives For more information, visit Please recycle.