|Arlene Kelly and Kim Sanborn are sharing an office these days — and not by choice.Two desks have been crammed into Sanborn’s space near the front entrance to the offices of Healthcare Resource Solutions Inc. (HRSI) in the Post Office Square complex in Wilbraham. Kelly’s old office has been converted into a conference room, while the old conference room has been retrofitted into a home for eight cubicles for customer service representatives. This, after the main office area was redesigned several months ago to accommodate more work stations, but was eventually maxed out.
|“There’s a lot of risk now and we’re here to take much of that risk out.”
“We’re a little crammed right now, to say the least,” said Kelly, noting that every private office in the company’s suite now has at least two people in it. The dizzying rate of growth at HRSI, and thus its crowded offices, are a direct byproduct of changes to the medical billing system that have created headaches for hospitals and physician practices — and opportunities for companies that can help clients clear hurdles and cut through the red tape.
HRSI’s space issues will soon be rectified by the construction of a three-story office facility in another corner of Post Office Park. But the problems arising from the growing complexity of medical billing and coding with be with the health care industry for some time.
And these are problems that arise, essentially, from technology, said Kelly. She told The Healthcare News that ever-improving software has made billing and other health care revenue-management services more sophisticated — and more risky for physicians.
As she explained, this technology enables payers to more quickly and thoroughly review bills and, ultimately, decide whether to pay them. For individual physicians and physician groups, the technology brings expense and a much greater margin for error, which they can ill afford at a time when their costs of doing business are rising.
HRSI was created to reduce that margin for error, and the fact that it is succeeding is evident in the cramped offices, the company’s growth rate, 200% over the past nine years (good enough the make the Affiliated Chambers’ Super 60 list last fall), and the volume of billing it now handles: $250 million a year.
“There are a thousand ways that a claim go wrong today,” said Sanborn. “Ten years ago, you could hire a billing clerk for $10 an hour and have things covered; that’s no longer the case — there’s a lot of risk now and we’re here to take a lot of that risk out.”
The Healthcare News looks this month at how the company does just that.
Bill of Fare
When asked how the world of medical billing became so complicated, Sanborn said it comes down to the fact that everyone in this sector is trying to reduce expenses and maximize profits. This alone does not distinguish the health care field, she continued, but what does is a basic distrust between those who submit the bills and those who pay them — and would prefer not to pay them.
This phenomenon has created what one expert on health care systems called an “arms race,” or an escalating administrative infrastructure in which the payers create hurdles to fast, easy payment for services, and physicians try to maneuver over and around these hurdles..
There are thousands of medical procedures, Kelly told The Healthcare News, and each one can be paid several different ways by the same insurer, let along different payors. Each procedure has a code and, very often, specific rules regarding payment, she continued, and if an incorrect code is entered or the wrong box is filled in, payment could be delayed or denied, she said.
So in many ways, technology, which has been used to simplify billing and other processes in many professions, has actually done the opposite in health care. “It’s anything but simple,” said Sanborn, adding that many physicians and physicians have neither the resources or the inclination to face this new world order on their own.
|“We have to put ourselves in a position to purchase the best technology, the latest and greatest, to hire the best staff, and to have access to everything we need to be as effective as we are today.”
This phenomenon prompted Sanborn and Kelly, both veterans of the health care field, to create HRSI in 1996, with the intention of managing billing and other revenue-management processes for its clients. The client list now includes hospital-affiliated groups, multi-location specialty practices, and solo practitioners. The staff at HRSI has grown from two to 110 in that time, and continued growth is expected because projections call for more, not less, complexity in this business.
To address the evolving administration of medical billing and help clients manage these changes, HRSI has created what it calls “breakthrough revenue-process improvement.” This is a four-part strategy designed to not only to help clients get paid faster, but to better handle all aspects of revenue management.
The process starts with a comprehensive review of a client’s entire revenue cycle, with the goal of removing variance, a major cause of lost revenue. Secondly, HRSI’s rule-based billing process removes subjectivity from the equation, thus ensuring accurate billing and reimbursement. Third, the company’s system has built-in rules synchronization, which consistently updates individual payor procedural changes, effectively eliminating claim rejection due to lack of coordination with payor systems. Lastly, the company searches the client’s revenue stream for inefficiencies and revenue-enhancement opportunities.
The net result of all this is improved cash flow for clients ranging from single physicians to groups of 80 or more doctors.
This can be seen in statistics showing that HRSI has achieved a 53% reduction in A/R days (the time it takes to collect payment after a bill is sent) over the past four years, a rate that outpaces the rest of the medical billing industry.
But the company’s roster of services extends far beyond billing, said Sanborn, adding that HRSI handles everything involved with a physician’s revenue.
“It’s the process from the point where the patient schedules an appointment right through to when the physician is paid for that service — it’s every step of that process,” she explained. “We also assist physicians with equipment purchases — we help them figure out the impact of that purchase and how long it might take to break even on it; we’re not just a medical billing company.”
HRSI’s diversity and solid track record have led to word-of-mouth referrals that have fueled tremendous growth at HRSI, said Sanborn, who stressed that, despite the company’s current space problems, growth has been controlled to ensure quality service.
“We have to continue to grow because we have to put ourselves in a position to purchase the best technology, the latest and greatest, to hire the best staff, and to have access to everything we need to be as effective as we are today,” said Sanborn. “So growth is very important to us, but we’ve tried to control that growth to make that everything works the way it should.”
Kelly said that part of the company’s success can be attributed to the fact that it is customer focused, and constantly looking for ways to bring more efficiency — and more value — to its services.
The company recently staged a program in Kaizen, the Japanese process-improvement strategy, designed to streamline operations and further reduce cycle times. HRSI is also looking to new office-design strategies to improve communication between employees and thus create greater efficiency.
Ron Gordenstein, president of Broadway Office Supply, who has worked with Kelly and Sanborn since they started HRSI and has helped orchestrate several moves and office redesigns, is currently working with the partners on the layout of the new facilities.
|“There are a thousand ways that a claim go wrong today.”
“This is a pretty rare opportunity — usually I’m given space and am told to work with it,” he explained. “Here, I’m involved in the actual design of the floor spaces to maximize the room we’ll have.”
Godenstein told The Healthcare News that discussions about floor layout and workstation design and dimensions have led to introspection about how work is done within the company — and how it can be done better, specifically with a more team-oriented approach. Such talks have led to a reduction in the planned size of each work station by half (from 36 square feet to 18) without impacting work functions, and a lowering of cubicle walls, from 65 inches to 42, to enhance communications.
“By lowering the height of the panels, we can improve the communication process, while also facilitating this change in philosophy to a team approach to solving problems,” he said. “This is going to be a textbook case of using design to help a company become more efficient.”
The steel was recently erected for the new home of HRSI, and the company plans to be in its new quarters by Aug. 15. That’s an ambitious timetable, the two partners (and Gordenstein) agree, but one that must be met.
The strict deadlines have been imposed to ensure that the move will not disrupt services, said Sanborn, noting that if there are problems and delays, clients will be impacted. “We’re managing this move as much as we do our overall business — every detail is carefully planned out,” she explained. “There is no room for error.”
That phrase pretty much describes the current state of the medical billing business. The situation explains the company’s meteoric pace of growth and the fact that Kelly and Sanborn have to share an office — at least for a few more weeks.