Healthcare compliance enforcement: Are you ready?

With the rapid growth of Medicare Advantage (MA) plans in the last several years, many hospitals are struggling to effectively manage the financial and operational challenges of these plans, including:

• Increased denials of Medicare Advantage claims
• Confusion between Medicare, supplemental Medicare plans, and Medicare Advantage (Part C) plans, and what each cover
• Extra burden of “shadow billing” inpatient claims and leaving potential reimbursement off the table if not done correctly
• Compliance risk, including the risk for Medicare fraud

This year, over 30 million people—more than half of those eligible for Medicare—have an MA plan. Medicare Advantage plans are inherently more complex than traditional Medicare, and many hospitals simply don’t have the appropriate processes in place to manage their nuances. However, by implementing the best practices outlined below, hospitals can decrease their Medicare Advantage risks.

1. Optimize your Electronic Health Record (EHR) to decrease Medicare Advantage denials

As with any insurance, you should understand the patient’s covered benefits well before they walk in the door. Collecting correct information at the time of scheduling is essential. In addition, for non-scheduled encounters, it is also essential to gather the correct information so that you can get the "prior auth" after the fact but within the specified time frame. Educating your patient access staff is essential. This is true for all plans, but since Medicare Advantage is often confused with traditional Medicare (by patients and providers alike), it’s even more important.

Most hospitals and provider groups leverage an eligibility and benefits tool that verifies coverage. These tools are often fully integrated into the EHR system. Revenue cycle leaders must ensure these tools are configured correctly and staff understand how to interpret the results. For example, running eligibility on a patient with Medicare will return an active result regardless of whether they have a Medicare Advantage plan or not. Patients must be eligible for Medicare in order to have a Part C plan. Most of the query responses do contain the additional information that the patient has a Part C plan and many EHRs can alert the user regarding this information.

BerryDunn recommends:

• Ensuring that staff members understand how the benefit verification vendor and EHR handle responses from traditional Medicare when the patient has an Advantage Plan
• Optimizing your EHR and workflow to manage these exceptions
• Training patient access staff around understanding responses and appropriate workflow

• Developing accompanying standard operating procedures and quick reference guides

2. Avoid authorization-related denials from Medicare Advantage

Authorization-related denials are a significant concern with Medicare Advantage. Two issues collide to form the perfect storm: Traditional Medicare does not require authorizations, and Medicare Advantage plans typically have stringent authorization requirements. The following is an example of a revenue cycle pain point that we see far too often:

The patient schedules an appointment and states that they are “on Medicare,” so they are registered with traditional Medicare. The patient needs an expensive procedure, and following Medicare rules, the staff believes no authorization is required. Approximately three weeks after the procedure, the hospital receives a denial stating the patient has a Medicare Replacement Plan. The accounts receivable staff member then bills the replacement plan, and now 60 days or so after the procedure, a second denial is received for no authorization. The claim will now get sent back to patient access and “ping-pong” around the revenue cycle. The ultimate result is most likely a write-off as most Medicare Advantage plans do not allow for retroactive authorizations after this much time has passed.

The revenue loss due to the volume of this type of scenario can be staggering, but with tools and training, it can be nearly 100% avoidable!

On a related note, there is a new bill being introduced in the US Senate, the Requiring Enhanced and Accurate Lists of (REAL) Health Providers Act, that is looking to ensure MA plans maintain accurate provider directories. This could be another tool that the frontline staff uses to identify traditional Medicare participants from MA plan participants. Asking “How did you find us today?” for new patients may solicit additional helpful information.

3. Don't neglect "shadow billing" of inpatient claims for MA beneficiaries

On top of the administrative burden of contending with prior authorizations and satisfying the billing requirements of the Medicare Advantage plan, hospitals, swing bed units, and skilled nursing facilities are also required to submit no-pay claims to the Medicare Administrative Contractor (MAC) for inpatient services provided to MA patients. This type of duplicate billing is often referred to as “shadow billing” since claims are submitted to both the MA plan for payment and MAC as information-only billing. It’s not uncommon for these shadow claims to be overlooked, or not billed to the MAC properly, which results in potential revenue loss or compliance risk related to:

• Reimbursement for Medicare’s share of indirect graduate medical education or nursing/allied health education costs. MA plans do not make payments for medical education costs, but the Medicare program will pay teaching hospitals directly for it based on the number of MA patients they serve as determined by shadow claim billing and reimbursed via the annual cost report settlement.
• Hospitals that are eligible for Disproportionate Share (DSH) payments receive additional operating and capital payments intended to offset the financial burden of treating a disproportionate share of certain low-income patients. It’s important that MA inpatient days are reported through shadow claims to properly capture days in the SSI percentage used to determine these payments and optimize reimbursement via the annual cost report settlement for DSH.
• Skilled nursing facilities and swing-bed units must submit shadow claims for beneficiaries enrolled in MA plans and receiving skilled care in order to take benefit days from the beneficiary and/or update the beneficiary’s spell of illness in Medicare’s common working file (CWF).

BerryDunn recommends that you periodically review your shadow billing processes to ensure that you’re capturing all Medicare Advantage inpatient claims and not leaving any potential reimbursement off the table.

4. Stay on top of best practices for Critical Access Hospitals receiving Medicare cost-based reimbursement

For Critical Access Hospitals (CAHs) that receive cost-based reimbursement from Medicare, there’s an additional layer of revenue risk related to the proliferation of MA plans. MA plans typically pay CAHs' based on a factor of their Medicare rates, which are based on the CAHs allowable costs. However, unlike traditional Medicare, MA plans do not retroactively settle payments based on actual allowable costs from its annual cost report filing. This means that a CAH is not actually paid its allowable cost to treat all Medicare beneficiaries, only those that are enrolled in traditional Medicare, which is a shrinking population. The Medicare Cost Coverage Ratio (the proportion of allowable costs that are reimbursed by Medicare) for CAHs throughout the United States shrunk by nearly 15% from 2018 to 2022 and is expected to continue to shrink as participation in MA plans grows. This puts a CAH’s cost-based reimbursement at risk.

A CAH may be underpaid or overpaid by an MA plan throughout the year if its interim Medicare rates are not close to its actual allowable costs. BerryDunn recommends that CAHs take the following steps to mitigate revenue loss and receive payments from MA plans that are reasonably close to their actual allowable costs.

• Regularly estimate Medicare cost report settlements (ideally every month, but at least quarterly). If necessary to incorporate operational changes, prepare an interim cost report to provide a more accurate estimate.
• Establish a threshold for your settlement estimate that would trigger you to request an interim rate adjustment.
• Send Medicare rate letters to all MA plans as soon as possible after you receive them so the MA plan can update their payment rates.
• If you’ve made significant investments or operational changes that would have an impact on your costs, don’t wait for your annual cost report filing to see the impact. Consider submitting an interim rate review to incorporate these changes into your Medicare and MA rates in a more timely fashion.

5. Understand your obligations at the time of contracting and enrollment  

As mentioned above, many of the MA products are included as part of a commercial contract. While not inherently "bad," it is important that each provider organization is clear about the differences in plan administration (authorizations, formularies, panel closure notifications) that may cause workflow changes for the staff to ensure revenue integrity and the rates. Typically, a small percentage of MA plans are reimbursed on "Medicare Plus." However, this percentage varies greatly, as do the payer policies. Several MA plans are introducing value-based programs. It is very important for each organization to understand the obligations clearly before engaging in these programs.

While the MA plans may look like they are part of the commercial agreements, the enrollment process for these plans is reliant on the completion of the traditional Medicare enrollment. Far too many times, we have seen providers forget to go back to the commercial plan to ensure that the provider has been linked to all of the products, again resulting in denials.

From labor shortages to regulatory changes, today’s healthcare organizations face greater challenges than ever. BerryDunn's audit, tax, clinical, and consulting professionals, focused on specific healthcare industry areas, understand these challenges, and are committed to helping you meet and exceed regulatory requirements, maximize your revenue, minimize your risk, improve your operations—and most importantly—facilitate positive outcomes. Learn more about our healthcare consulting team. 

Nearly every type of business relies on external service providers to help keep operations running smoothly and to provide customers, clients, or patients with high-quality service and care. Whether it’s a cloud-based accounting or HR system, an outsourced medical billing provider, a financial services core system, or an investment management application, service providers can make your job easier and more efficient. But remember: You can outsource operational functions, but you cannot outsource responsibility.

Effective oversight of service provider vendors is essential for managing risk and potential adverse impacts to your reputation. For instance, patients don’t care that it was a third-party who didn’t patch a server that gave hackers access to their personal data; they care their data was exposed and they hold you, as the service provider, responsible for lack of oversight of your contracted third party (sub-service organization). Unlike functions that are performed in-house, when services are outsourced, you may have limited information on hand and less control over the process. A System and Organizational Controls (SOC) report can be an invaluable tool in helping you gain confidence about the controls at your service providers.

What is a SOC report?

A SOC report is a way to verify that an organization has designed sufficient controls and that those controls are in place and operating effectively. These controls are typically related to organization and management, operations, logical security, networking, access, application processing, privacy, and availability. These controls are tested for operating effectiveness by independent third-party auditors. Any exceptions are identified in the SOC report and may vary by severity from a report qualification to a minor issue. Based on the type of SOC report (explained below), it is up to you as a service organization to determine the impact on your business and customers of any noted exceptions and to act accordingly.

Which SOC report should you request?

There are primarily two different types of SOC reports. It is important to understand these types so that your organization can obtain the most relevant report to address your reporting and vendor due diligence needs. You may also have a need to require both reports from a service provider, which is very common.

• SOC 1: Reports on controls at a service organization that may be relevant to user entities’ internal control over financial reporting. These would be ideal for organizations whose service organization provides a service that would impact financial reporting (ask yourself: Is the service provided impactful to your financial statements?)
  • Type 1: A design of controls report. This option evaluates and reports on the design of controls put into operation at a point in time. You can think of this as a “kicking the tires” report.
  • Type 2: Includes the design and testing of controls to report on the operational effectiveness of controls over a period of time. This is more of a “deep dive” report.
• SOC 2: The purpose is to evaluate an organization’s information systems relevant to security, availability, processing integrity, confidentiality, or privacy. The SOC 2 has predefined criteria in which the service organization identifies internal controls they need to address the criteria. A SOC 2 audit is more prescriptive than a SOC 1.

It is not uncommon for service organizations, especially larger ones, to have many SOC reports covering many specific functions and systems. They may also have a SOC 1 and SOC 2 report for the same function or system. A SOC 1, Type 2 report is more valuable than a SOC 1, Type 1 report since it tests the operational effectiveness of controls over a period of time. A financial statement auditor will likely want to see a SOC 1, Type 2 report. Type 1 reports are typically done the first time a service organization undergoes a SOC exam, with the expectation that in subsequent years, a Type 2 report will be issued.

When should you request a SOC report?

Not all service providers need to be treated equally from a monitoring perspective. Perform a periodic risk assessment to determine how risky a service provider is to your organization. This risk assessment should consider items such as:

• What functions are they providing to your organization?
• Is the service organization’s service material to your financial statements?
• Does the service organization have access to your systems and data?
• Does the service organization have access to, process, manage, and maintain customer personally identifiable information (PII) or credit card information?
• Have there been issues with this vendor in the past, including through review of their SOC report?

This risk assessment will drive the level of monitoring needed on an ongoing basis, including if review of a SOC report is necessary, and the frequency of this review.

How to conduct and document a SOC report review

For those service providers in which SOC reports will be reviewed, make sure you have a consistent review process that is followed each time. BerryDunn has a review checklist available on our website to ensure your review is consistent and captures the salient items. 

When you receive a SOC report, it should be thoroughly reviewed and documented, including the date of the review and who performed it. More so than reviewing the SOC report, you must also review user control considerations (UCCs). UCCs are controls that the service organization had included in the report as critical to the internal control cycle and are the responsibility of you, as their customer. The UCCs should be reviewed and determined if they are applicable to the services you receive from the service organization, and if they are, you should determine that controls are in place and should be tested internally for operating effectiveness.

There are certain items within a SOC report we recommend that you review and document:

• System or function covered: Make sure the SOC report covers the function or system pertinent to your organization.
• Type of report: Is it a SOC 1 or SOC 2? If a SOC 1, is it a Type 1 or Type 2?
• Period covered in the report: What period does the report cover? If being used for a financial statement audit, is a bridge letter needed?
• Service auditor: Who is the service auditor? Are they reputable, qualified, and independent from the service provider?
• Opinion: Review the service auditor’s report. What opinion was provided? Were there any opinion exceptions?
• Subservice organizations: Does the service provider rely on any third-party service providers?
• Control objectives: Review the controls pertinent to your organization. Were there any testing exceptions identified?

The use of service providers, for most organizations, is unavoidable. It is important to have a thorough process to monitor these service providers to help ensure they don’t adversely impact your organization’s operations. Requesting and reviewing SOC reports from your service providers is one effective due diligence mechanism. We hope you will find our SOC review checklist helpful and, to learn more, please watch our video on how to effectively use this checklist.

Read this if you are at a senior living organization or Skilled Nursing Facility (SNF).

On September 1, 2023, the Centers for Medicare and Medicaid (CMS) released a much-anticipated proposed minimum staffing rule. The proposed rule would require nursing homes participating in Medicare and Medicaid to meet specific nurse staffing levels that promote safe, high-quality care for residents. The proposed rule represents the first time the federal government has proposed comprehensive nationwide nursing home staffing requirements. Various states have already enacted their own staffing requirements.

There are three major requirements under the proposed rule:

1. Nursing homes would need to provide residents with a minimum of 0.55 registered nurse (RN) hours per resident per day
2. An RN is required to be on-site 24 hours per day, seven days per week
3. Each resident must receive 2.45 hours of care from a nursing aide per day, exceeding existing standards in nearly all states

In addition, the proposed rule includes additional reporting requirements regarding Medicaid payments for institutional long-term care support services and $75 million for nurse aide training.

CMS proposed minimum staffing rule challenges

The proposed rule is extremely problematic and seems impossible to implement. Here are just some of the issues of the proposed rule.

Lack of clarity

There is a lack of clarity in the rule as to what positions can be included in the nurse aide count and the rule does not include Licensed Practical Nurses (LPNs), of which there are approximately 120,000 nationwide.

Current staffing levels are insufficient

Based on Payroll Based Journal (PBJ) data through the first quarter of 2023, the American Health Care Association (AHCA) estimates that approximately 37% of all nursing facilities are currently unable to meet any of the three staffing requirements mentioned above and less than 7% of facilities nationwide are currently meeting all three of the requirements. 

Nursing employment shortage

The rule would require the industry to employ an additional 85,000 nursing assistants and 28,000 registered nurses. Where will these additional nurses come from given the post-COVID-19 pandemic workforce shortages?

Lack of funding for providers to implement this proposed rule

CMS estimates the proposed rule will cost $4 billion annually to implement, while the AHCA estimates $6.8 billion annually. We believe that some of the discrepancy in estimated costs to implement is the increased utilization of contract nursing. The AHCA estimate of nurses needed and cost to implement include the contract nursing that existed in the Q1 2023 PBJ data. 

Impact to states’ Medicaid budgets

AHCA estimates annual costs to states range from $6 million in states such as Maine and North Dakota to as high as $700 million in Texas, Florida, and New York. States that are already strapped by Medicaid budgets will likely not be able to increase reimbursement rates enough to pay for this proposed rule, which may ultimately lead to nursing home closures and lack of access to care for seniors.  

The proposed rule has phased-in implementation and hardship exemptions that take into consideration rural and underserved communities. However, many believe the phased implementation is not enough to compensate for the workforce shortage and the onerous exemption process will not benefit the rural providers it is intended to benefit.

There is strong opposition to this proposed rule as it could have a devastating impact on nursing facilities. On September 28, 2023, the US House of Representatives majority introduced House Bill 5796, which would prevent the Secretary of Health and Human Services from implementing and enforcing this proposed rule. AHCA has a grass-roots outreach campaign in which it seeks to have 10,000 individual comments sent to CMS by November 6, 2023.

Read more about the proposed rule: HHS Proposes Minimum Staffing Standards to Enhance Safety and Quality in Nursing Homes | CMS.

To submit a comment on CMS’ proposed minimum staffing, contact the AHCA: regulatory@ahca.org.

If you have any questions about the proposed rule, please contact our Senior Living team. We’re here to help.

What Medicaid agencies and Medicaid-participating managed care organizations need to know about new mandatory federal requirements for reporting on the core sets of quality measures.

Read this if you administer a Medicaid agency, a CHIP program, or a Medicaid-participating managed care organization. 

On August 31, 2023, the Centers for Medicare & Medicaid Services (CMS) issued its Final Rule, which establishes requirements for mandatory annual state reporting of the following Core Sets of Medicaid quality measures:

• The Core Set of Children’s Health Care Quality Measures for Medicaid and the Children’s Health Insurance Program (CHIP)
• The behavioral health measures on the Core Set of Adult Health Care Quality Measures for Medicaid
• The Core Sets of Health Home Quality Measures for Medicaid  
• The regulations associated with the Final Rule are effective January 1, 2024. The initial (2024) round of reporting must be submitted and certified by states by December 31, 2024

FAQs: Medicaid Core Sets reporting requirements  

• Do these reporting requirements apply exclusively to the 50 states? 
  No. These requirements include the 50 states, the District of Columbia, Puerto Rico, the Virgin Islands, and Guam. American Samoa and the Mariana Islands could, but would not be required to, report Child Core Set and Adult Core Set measures. 
• Do all Medicaid agencies operate health home programs?
  No. “Health homes” refers to two optional Medicaid benefits that states may elect to implement through their CMS State Plan Amendment (SPA). The Section 1945 health home benefit is for Medicaid-eligible individuals who have: a) two or more chronic conditions; b) at least one chronic condition and who are at risk of developing a second; or c) at least one serious and persistent mental health condition. The Section 1945A health home benefit is for Medicaid-eligible children with medically complex conditions. 
• If a state’s CHIP is separate from the Medicaid program, do these reporting requirements also apply to CHIP? 
  Yes. The Medicaid agency must report on the measures for standalone CHIP-enrolled beneficiaries in addition to Medicaid-enrolled beneficiaries, according to each measure’s age range specifications. 
• Are Medicaid agencies required to report on all Medicaid and CHIP beneficiaries, including those enrolled in fee-for-service and managed care?
  Yes. However, the Secretary of HHS could specify in CMS’ annual reporting guidance that a population is not required to be included. Also, the Secretary could grant a Medicaid agency an exemption from reporting on one or more measures for a specific population.
• Is there a filing deadline for a Medicaid agency to request a reporting exemption?
  Yes. A request for an exemption must be submitted by September 1 of the applicable reporting year. A Medicaid agency may request a one-year exemption from reporting for a specific population. This request must demonstrate that the Medicaid agency is unable to obtain access to data required to report the measures for a population despite making reasonable efforts to do so. The request must also document a reasonable timeline of actions underway to resolve data access problems.
• Will these requirements require a Medicaid agency to submit a change in its state plan? 
  Yes. The Medicaid agency must submit a state plan amendment, specifying that it will report on the Child Core Sets and Adult Core Sets in accordance with 42 CFR § 437.15.
  
  If the Medicaid agency offers either or both of the optional health home services, then the state plan will need to also address the health home reporting requirements in accordance with 42 CFR § 437.15. The Medicaid agency must also require health home service providers to report to the agency on all populations served by the health home provider and on the measures in the applicable Health Home Core Set as a condition of receiving payment for these services.
• Can CMS withhold federal Medicaid payments, in whole or part, from a state that is non-compliant with these reporting requirements? 
  Yes. CMS has stated that graduated enforcement mechanisms for compliance with Core Sets reporting requirements due to issues with state data systems will align with existing CMS policy regarding state corrective action plans.
• Will CMS modify the Core Sets measures on an annual basis?
  Yes. The Secretary of HHS will identify and annually update the quality measures beginning no later than January 1, 2024, and annually no later than January 1 thereafter. In issuing the annual guidance, the Secretary may consider the level of difficulty in accessing the data required for reporting and may provide that reporting will be voluntary for a specific year. 
• Will CMS establish data stratification rules for these measures? 
  Yes. In considering which measures, and by which factors (such as race, ethnicity, sex, age, rural/urban status, disability, language, or other factors) states must report stratified measures, the Secretary of HHS will consider whether stratification can be accomplished based on valid statistical methods. Other considerations include whether stratification will not risk a violation of beneficiaries’ privacy and whether the original survey instrument collects the variables necessary to stratify the measures. The rollout of stratification requirements will begin by the second year of annual reporting after the effective date of these regulations and increase yearly. By the fifth year of annual reporting after the effective date of these regulations, 100% of measures will be stratified.      
• Will CMS make the reporting information publicly available? 
  Yes. CMS will make the Core Sets information publicly available not later than September 30, 2025, and annually by September 30 thereafter. 

Centers for Medicare & Medicaid Services Core Set resources

• Centers for Medicare & Medicaid Services. Subpart A-Child, Adult, and Health Home Quality Measures. 88 Fed. Reg. 60105 (2023) (to be codified at 42 CFR Section 437 Subpart A). Accessed at Federal Register: Medicaid Program and CHIP; Mandatory Medicaid and Children's Health Insurance Program (CHIP) Core Set Reporting
• Centers for Medicare & Medicaid Services. FFP for design, development, installation or enhancement of mechanized processing and information retrieval systems. 88 Fed. Reg. 60105 (2023) (to be codified at 42 CFR Section 433.112(b)(12)). Accessed at Federal Register:
  Medicaid Program and CHIP; Mandatory Medicaid and Children's Health Insurance Program (CHIP) Core Set Reporting
• Centers for Medicare & Medicaid Services. Reporting measures on Health Care Quality Measures. 88 Fed. Reg. 60105 (2023) (to be codified at 42 CFR Section 437.20). Accessed at Federal Register: Medicaid Program and CHIP; Mandatory Medicaid and Children's Health Insurance Program (CHIP) Core Set Reporting
• Centers for Medicare & Medicaid Services. 2024 Core Set of Adult Health Quality Measures for Medicaid (Adult Core Set). 
• Centers for Medicare & Medicaid Services. 2024 Mandatory Core Set of Children’s Health Care Quality Measures for Medicaid and CHIP (Child Core Set). 
• Centers for Medicare & Medicaid Services. Proposed 2024 Core Set of Health Care Quality Measures for 1954A Health Home Programs (1945A Health Home Core Set). 

If you have questions about the Core Measure Sets for Medicaid or need guidance in complying with these reporting requirements, please contact Robyn Hoffmann or Ethan Wiley.

What happens when you put a group of healthcare experts in a room and let them talk? A lot of information coming at you fast! At our recent Healthcare Leadership Event, BerryDunn’s experts and guests covered a wide range of challenges and solutions for healthcare leaders. Here are just a few of the takeaways. View all the session recordings.

Revenue cycle optimization: Manage and minimize denials from all angles

In the revenue cycle roundtable, our diverse group of experts each had a different perspective on how to decrease, manage, and prevent denials.

• On the front end, patient access teams should focus on being proactive about the collection of patient guarantor and insurance information in order to qualify patients for services ahead of time.
• On the back end, you need a dedicated person or team focused on tracking and managing denials, with regular meetings with your revenue cycle team.
• Both the end of the PHE as well as the influx of Medicare Advantage plans are causing a major uptick in denials. Many patients who were covered by Medicaid during the PHE are no longer covered (and may not even realize it). The diversity of Medicare Advantage plans can cause confusion over what services are covered due to the differences between each plan.
• On the Home Health side, optimize technology to meet regulatory and billing requirements for Medicaid and other insurers, which would include Electronic Visit Verification. The right technology can help agencies gain efficiencies and decrease denials.

Get your credentialing and enrollment house in order to minimize risks

Credentialing and enrollment are critical areas within the revenue cycle. When it’s not done correctly, it can cost an organization hundreds of thousands of dollars in denials, non-compliance, and provider dissatisfaction (think recruitment costs).

Healthcare organizations should recognize that credentialing and enrollment requirements are variable by state, payer, accrediting bodies, and organizational standards. Understanding these varying requirements is key in staying compliant and maximizing revenue, particularly for multi-state organizations.

Involving representatives from legal, compliance, and risk can help you manage these challenges, as can a periodic outside review of an organization’s credentials verification, enrollment, and onboarding processes, particularly for newly-onboarded physicians.

Navigate labor market shifts in healthcare finance

Like nearly all industries, the healthcare field is losing leaders and experienced staff due to higher-than-normal attrition, aging out, and consolidations. Here are some tips to focus on for improving the culture of finance teams to help retain finance leaders and staff members, as well as minimize the disruption from a leadership departure.

• Create an environment that incentivizes leaders to stay.
• Keep the lines of communication open. Frequent communication between staff and management will allow everyone in the department to stay connected and build trust amongst each other. Answer emails in a timely fashion. Walk through the department weekly to say hello. During departmental meetings, ask staff to share and actively lead the agenda. Management should welcome questions from the staff and intentionally solve problems together. Employees want to feel appreciated and integral to the department, and if they do, they will have more reason to stay.
• Provide education and training on a regular basis. Meet with your team monthly to review operational results and how the various metrics such as patient bed volumes and payor reimbursement mix correlate to the financial results. Encourage high-performing employees to participate in industry-specific associations and community events. Share knowledge and build relationships through formal mentoring and meetings with a trusted advisor. Healthcare organizations that provide valuable training will better retain their high-achieving finance leaders.

For business planning, focus on what is in your control

For organizations that may be thinking of acquiring or selling their business, be aware that in the current economic climate with rising interest rates, there may be a significant impact on your organization’s value. Did you know that every 1% rise in interest rates can equal a 10% decrease in value? In turbulent economies, it’s important to focus on what is in your control to add and protect business value, including:

• Assess the maturity of your business systems. Improving your technology systems, for example, can help you get information quicker, which helps you make better decisions and be more efficient. This can positively impact your bottom line.
• Examine your financing models. If you’re relying on lines of credit, higher interest rates are costing you. You may want to tighten up your expenses and lessen your reliance on lines of credit or generate cash to pay off higher-rate loans.
• Readjust your staffing models. Is there a way to readjust staffing to reduce high expenses, such as the cost of travelers?
• Be aware of the impact of interest rates on all of your operations.

Be proactive about patient communication as the PHE unwinds

As the public health emergency comes to an end, there will be a large impact on patient coverage. With Medicaid redeterminations underway, as many as 15 million people may lose coverage. It’s more important than ever to have processes around obtaining patient information, as well as educating patients on alternative options. For example, do your patients realize that there is a special enrollment period available for marketplace health insurance? For Medicare Disproportionate Share Hospitals (DSH), be prepared for a potential drop in Medicaid days and reimbursement. Be sure to monitor this closely to stay in compliance.

Get more insights, presentations, and recordings from our Healthcare Leadership Event 2023. 

Healthcare system conversions are risky endeavors. But what is the alternative? Stay with a system you’ve outgrown and no longer meets your organizational needs? At BerryDunn, our healthcare consulting teams have worked with a substantial number of organizations as they’ve transitioned to new enterprise systems such as Electronic Health Records (EHR) systems and Enterprise Resource Planning (ERP) systems. Based on our experience, there are 10 key areas to focus on in order to have a successful conversion.   

1. Start preparing early 

If you know you’ll be bringing in a success partner like BerryDunn to help you through the conversion, bring them early in the planning as possible. The success of the entire project depends on how well you’ve planned and if you've brought in a strong methodology to approach the implementation.   

2. Assess your needs before you make a decision to change systems 

Before you even decide that you need a new EHR or ERP system, the first step is to conduct a thorough assessment of your current system and determine if you actually need a new system.  It’s possible that your current system could and will meet your needs if set up correctly.  

If you determine that you do need a new system, the next step is to conduct a thorough needs assessment that details exactly what your organization needs out of the system. It’s important not to think in terms of what your old system was capable of, but to focus on the problems that you want the new system to solve. Talking to other organizations or consultants like BerryDunn, who are solely focused on and have experience in this work, can help you determine what best-in-class systems can do.  

3. Understand and mitigate the risks 

There are risks at every stage of the process, from not identifying your needs correctly, not assessing the facility’s readiness for change, choosing a subpar vendor, having an incomplete contract, not monitoring the implementation very closely to meet the deadlines, and not addressing the risks as they appear. It’s important to manage the steps correctly at each phase, beginning with: 

• Documenting detailed requirements for the EHR or ERP system 
• Initiating a formal RFP process to include the system requirements in writing 
• Thoroughly vetting and evaluating vendors consistently 
• Negotiating a solid contract that holds the vendor accountable for support and a timeline 
• Assessing what staffing changes and training are needed 
• Providing sufficient time for testing pre- and post-go-live 
• Understanding and planning for the impacts to your revenue cycle 

4. Manage the vendor 

The vendor may be managing the project, but who is managing the vendor? Whether you hire a consultant like BerryDunn or have in-house resources, managing the vendor can be a full-time job. In our experience, the vendor wants to have a successful implementation as much as you do, and they also want to go live on time so they can move on to their next project. You will need to advocate for your organization and be able to hold the vendor accountable to what was agreed on, even if that means taking more time. If your contract was thorough, you should have enough leverage to do so. The bottom line: Don’t feel rushed to go live until you know you are ready. 

Insist on a detailed implementation plan from the vendor that shows realistic timelines for the tasks needed to be accomplished to meet the go-live date. The project should include weekly communication meetings with the vendor to ensure any problems and delays identified can be addressed quickly. 

5. Make sure your internal project team is ready 

Just as it’s important to ensure your vendor is well-staffed, prepared, and held accountable, these factors are equally important for your internal project team. Take the time at the beginning of the project to create a plan for success that takes into account roles, communication, and contingency plans. A good plan will include:  

• Establishing a project charter to formalize governance, teams, and roles and responsibilities 
• Communicating and reinforcing the project as a mission-critical effort 
• Establishing regular project meetings to follow up on and manage risks, actions, issues, and decisions 
• Monitoring competing priorities and alleviating non-project efforts for staff where possible  
• Anticipating project team turnover and having a plan for backfilling team members in advance 

6. Help your staff adopt the new system 

Even if you implement the best system in the world, if your nurses, doctors, and billing staff don’t use it (or don’t use it correctly), it won’t be effective. You need to be able to manage the people side of change, starting with building the case for why you are switching systems and how it will benefit the working staff. Having a thorough training plan and making sure people are ready for the conversion is a key step that shouldn’t be neglected. 

7. Allocate enough time and the right resources for testing 

Before you go live, you need to know the system is going to work for specific scenarios in every department that uses it. For EHR systems, that is every department that touches a patient. A solid testing plan begins with identifying the key, critical scenarios in each area and assigning the right people to be involved in testing – ideally, those who will be using the new system and have a firm grasp on the typical workflows. The plan should “follow” a patient from the point of registration to treatment, discharge, billing, and patient follow-up. A good testing plan will confirm if the system functions as intended and will drive issue resolution and any needed configuration changes. Ultimately, the result of testing will be to determine if you’re ready for go-live.  

8. Get your accounting systems in order  

Many healthcare organizations implement new accounting ERP systems at the same time they convert their EHR. It is important to determine concurrently how the operational and financial data from the EHR will be integrated into the general ledger and reporting dashboards. A study will need to be made on the ease with which the payroll information from the outside software application can be accurately uploaded. Your chart of accounts likely will need to be revamped.  Electronic invoice routing and approvals have become very sophisticated and can improve efficiency with the proper setups. Your new accounting ERP system should not be a “last minute thought” but carefully selected and planned as the EHR is being implemented to ensure accurate and state-of-the-art reporting to deliver to your internal and external audiences.   

9. Don’t neglect your revenue cycle 

Launching a new system is not business as usual. Most new EHRs introduce new complexity to the clinically driven revenue cycle. This requires different management skills and tighter coordination across the organization. Success requires advance planning around charge master structure changes, patient access, and other workflows that will heavily change. Attention needs to be paid to leveraging clearinghouse functionality, and testing plans should incorporate all charging and payor scenarios.  

In addition, no matter how prepared you thought you were, your clinicians are just not going to be able to do things as fast as usual when using a new tool. It takes time to build proficiency in any new system. When launching a new EHR, you’ll need to schedule lighter patient loads in the weeks after your go-live, allowing flexibility for fixing problems and for taking into account learning curves.  

Because of this lighter load, your revenue cycle will be impacted. Fewer patients will be cared for, and fewer patients will be billed. You need to consider these cash flow impacts and plan around legacy receivables well before launch day (ideally as much as two years prior) so you can plan for it and ensure that you’re accounting for, and finding ways around, any shortfalls.  

10. Manage the post-go-live transition 

So you went live with your new system. Congratulations! But this isn’t the end. The two weeks after your go-live date are very important. Are you meeting with the vendor to track defects? Are you getting everything out of the system that you dreamed of? Do you have a plan for addressing deficiencies and adding more functionality? Most vendors have a two-week window to help you post-go-live. You need to take advantage of that while you still have their attention. Once you transition to help desk support, you’re just not going to get the attention that you were before. Having a plan and a system in place for these post-go-live weeks is crucial.  

Is it time to bring in a success partner?  

To be successful, you need a partner who can address all of your needs and be your advocate, and expert, providing the support – and the answers – to questions you might not even know to ask. BerryDunn’s Healthcare team works with healthcare organizations every day, all year long, guiding them through EHR and ERP selection, vendor management, system implementation, testing, and beyond to mitigate risks and help ensure your investment pays off. We’re happy to discuss how we can help you with project and change management, interim or project staffing assistance, system report creation and dashboarding, and revenue cycle optimization. Contact a member of our team.