Rush University System for Health CFO John P. Mordach says the co-management model aims to improve everything from coding and billing to employee satisfaction.
In the revenue cycle setting, changes from regulators and payers are often swift and constant.
"I think in this very fast-paced environment in healthcare, particularly on the revenue cycle side, there's so much change coming," says John P. Mordach SVP and CFO at Rush University System for Health (RUSH). "From the revenue cycle standpoint, it's challenging to keep up with all of that."
Some revenue cycles turn to outsourcing to help them navigate the tumult. But Mordach says RUSH elected not to go that route. Instead, it's partnering with R1 RCM for a co-management model that Mordach says aims to improve everything from coding and billing to employee satisfaction.
"Our net patient revenue is approximately $2.4 billion a year," he says. "With all of that volume, there's just tremendous opportunity to improve how we code, how we document all the great care that we're doing and keep up with the regulations in a more timely manner."
RUSH isn’t alone in opting for co-management partnerships. For instance, in 2016, University of Alabama at Birmingham (UAB) Medicine entered into a seven-year partnership with Navigant (which was acquired by Guidehouse last year) to streamline the entire revenue cycle from top to bottom.
From when that partnership began in October 2016 through June 2018, UAB Medicine realized $68.7 million in savings through a combination of cash acceleration, reduced costs, and net revenue increases.
The RUSH/R1 partnership will consist of two main parts, the details of which are still being determined, says Mordach. The partnership's components are:
- A co-management model that will embed technology, automation, enterprisewide performance analytics, and best practices into RUSH’s Epic EMR workflow. In addition, 12–15 of R1's managers are expected to join RUSH's existing management team throughout the revenue cycle to help RUSH improve the collections and denials process.
- RUSH and R1 will launch an "innovation lab" to deliver analytics-enabled value-based care solutions to the larger healthcare market. The partnership will also tap Rush University to train the next generation of revenue cycle leaders, with curriculum development help from R1. Although Mordach says they're "just on the initial path of this long-term journey," he says that part of this relationship will include scholarship funding for minority students.
Mordach says he believes the partnership will be an education, recruitment, and retention tool for the health system.
"[W]e can attract people that want to work at RUSH on the revenue cycle and know that this is a way for them to advance in the organization and to further sharpen their skills and keep up with things," he says.
Mordach also believes now's a great time for the health system to make such a move because it is in such strong shape financially.
"Good management plans for challenges proactively ahead and doesn’t wait to react," he says.
HealthLeaders asked Mordach to discuss the new partnership, including why co-management was a better option for RUSH than outsourcing. The conversation has been lightly edited for clarity.
HealthLeaders: What are some of the elements of the partnership?
John P. Mordach: We are currently working through the details now, but we expect roughly 12–15 managers from R1's team with expertise in various segments of the revenue cycle, whether it's preregistration, registration, insurance verification, coding, charge capture, documentation, billing, collection, follow-up, etc.
We're going to have their managers sitting side by side with our management team in those areas. Throughout the front, the middle, and the back of the revenue cycle, their management team is going to be dispersed with our management team.
In addition, R1 is technology-enabled, and we're very excited. They have RPA [robotic process automation] bots.
Financial institutions have utilized this robotic technology for years. It's almost an art form for financial institutions. We all deal with [RPA bots] when we call our credit card companies or banks, and insurers have it. So now we're thrilled we're going to have it.
[RPA] will be embedded in our rev cycle software and workflows, and it will make it much more efficient to be able to bill and collect on claims; to identify things that were not getting paid for; and be able to work much more efficiently with the payers to resolve disputes.
The partnership also benefits—I believe, most importantly—the patients. Patients should be at the center of everything we're doing. At RUSH, I believe very strongly that we consider all key decisions centered around our patients.
I think it will improve the accuracy and timeliness of the bills that we send to patients, too, and information about what they owe us if there's a balance due after insurance or if they're a self-pay patient.
I think the less burdensome we can make this on our patients, the easier this can be for our employees. I think this will also be a workforce engagement benefit for employees, knowing it's a co-management [partnership]. It's not outsourcing.
I expect when we do engagement surveys a year from now, when we actually have this up and running and have a full year under our belt, that our patient satisfaction scores will improve on the billing side and our employee engagement will as well. At least, that's my hope, and I think there's good promise to support that.
HL: Can you tell me more about the idea and the trend of co-management? Do you see it growing in the industry?
Mordach: I do. A simple business way to think about it is that we're supplementing the workforce with 12–15 very experienced seasoned revenue cycle managers.
An alternative to that would be to just go out and hire 12–15 managers. First of all, that's tough to do. That's a fair number of people, and then trying to retain them can be costly. So rather than writing checks for 12–15 additional employees, we're on a contingency basis, if you will, with R1. Basically, if we see revenue cycle improvement results and we gain improvements, then R1 will benefit from that. It's a very efficient way of doing it, and I do see that others will think so too.
I would expect other chief financial officers to be considering this in the near term and the medium and long term. We're just starting out on this journey, so I think both sides will learn from each other. But overall, I'm very excited about this and the benefits it will provide to RUSH and to our employees and patients.
HL: Can you talk more about co-management as an alternative to outsourcing? Why is this a better idea in your opinion?
Mordach: We have a commitment to employees. [O]utsourcing, I think, is an extreme alternative.
As the chief financial officer of the system and knowing that the revenue cycle is the financial heartbeat of this institution, I would be reluctant to give any institution the keys to that.
I'm proud of the revenue cycle leadership and the rev cycle employees. They work hard each and every day. These are very good paying jobs for those who live in our community, so I view this as another sign of RUSH's commitment to the communities that we serve and to our employees. I think [the partnership is] a creative way. Outsourcing is a wrenching and extreme approach.
We are in very strong financial shape. We are AA rated with Fitch, A1with Moody's, and A+ with Standard & Poor's.
And we're about to issue approximately $300M in debt to fund the $450 million new ambulatory building we're building on our campus, which will be a destination cancer site and a showcase for our neurosciences program.
We are in very strong financial shape. Layoffs are not anticipated. I think this partnership, in all its aspects, will give RUSH a strategic advantage for all the reasons I articulated already. This is the time to do these types of partnerships, not when there's trouble.
Alexandra Wilson Pecci is an editor for HealthLeaders.
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