Susan Reed, Veterans Affairs Consolidated Patient Account Center Program Management Office, Washington, D.C., USA
The U.S. Veterans Health Administration had 153 billing centers nationwide.
It wanted to have only seven.
As the largest healthcare system in the United States, the U.S. Veterans Health Administration (VHA) serves nearly 9 million veterans a year. In 2008, it initiated a program to consolidate its revenue processing. That meant moving the insurance billing of its 153 separate medical centers into seven new regional centers that had to be built and staffed—all in just five years.
Seeds for the change were planted back in 2004, when the VHA decided to assess its claims process. For more than two decades, the VHA, which provides healthcare to U.S. veterans, has processed claims and received reimbursement from third-party insurance companies for any care not related to a veteran's military service. This is an important revenue stream for the VHA, as it supplements the annual US$55 billion in congressional appropriations on which the agency's more than 1,700 hospitals and clinics rely.
“We were seeing increases in [insurance] collections and saw a great opportunity to determine if we were doing all we could and whether we could make it better.”
—Stephanie Mardon, VHA, Washington, D.C., USA
“We were seeing increases in collections and saw a great opportunity to determine if we were doing all we could and whether we could make it better,” says Stephanie Mardon, deputy chief business officer for revenue operations, VHA, Washington, D.C., USA. “We wondered, What is going on in the private sector? Are we doing things consistent with them? Is this the best way to organize the model?” These questions put into motion a workgroup to research the way other hospital systems processed insurance claims.
Susan Reed, executive director of the Veterans Affairs Consolidated Patient Account Center Program Management Office, Washington, D.C., USA, used information gathered by a group of five senior leaders who visited public and private healthcare organizations to identify best practices. After nine months, the team determined that the insurance billing from each of the VHA's 153 medical centers should be consolidated into seven regional billing centers, called Consolidated Patient Account Centers, or CPACs.
Ms. Mardon describes the idea as utterly transformational. “We said, ‘Wait a second, this consolidated centralized model is what's going to take us forward for the next 20, 30, 40 years.’”
The VHA backed the team's recommendation, and in November 2005, the VHA Chief Business Office initiated a pilot program to see if the newly identified best practices would improve an already well-performing revenue operation. Team members selected a VHA site in Asheville, North Carolina, USA that was already acting as a consolidated payment center for eight local medical centers. They looked at every step of the revenue cycle: for instance, how insurance-plan information is entered electronically; what information is needed upfront, how to get it and how to verify it; and why that information is the most vital. Then they asked whether all staff members were doing tasks and defining terms in the same ways, and—most critically—if there was any opportunity for the VHA to make the process better.
Next, they found a tool that could automate workflow: “Say I'm an account management clerk,” Ms. Reed says. “When I come in in the morning, instead of waiting at my desk for work to be assigned to me, I have my list of work to do that day. I can sort it based on workflow and priority, go after the high-dollar accounts first, and as I complete the work, the next case comes up.”
By September 2007, the Asheville unit was fully converted into the VHA's first CPAC. The project's next phase was to expand the facility to demonstrate how it could increase capacity and throughput. In two years, Ms. Reed's team more than doubled the number of medical facilities served by the CPAC from eight to 18, buttressed by a 400 percent increase in staff, to a total of 530.
THE U.S. VETERANS HEALTH ADMINISTRATION SERVES NEARLY 9 MILLION VETERANS A YEAR.
- 2004-05: Nine-month best practices investigation identifies consolidation method for revenue processing.
- November 2005: Initiation of pilot program at consolidated payment center in Asheville, North Carolina, USA
- September 2007: First CPAC established at Asheville site (Mid-Atlantic region)
- October 2008: Veterans' Mental Health and Other Care Improvements Act of 2008 requires the establishment of six more CPACs in five years.
- September 2009: Completion of expansion at Asheville, from eight facilities served to 19, with an increase in staff from 100 to 530
- November 2010: Second CPAC operational, Smyrna, Tennessee (Mid-South region)
- December 2010: Third CPAC operational, Middleton, Wisconsin (North Central region)
- February 2011: Fourth CPAC operational, Orlando, Florida (Florida & Caribbean region)
- June 2012: Fifth CPAC operational, Leavenworth, Kansas (Central Plains region)
- September 2012: Final two CPACs operational: Las Vegas, Nevada (West region) and Lebanon, Pennsylvania (North East region)
- September 2013: Original CPAC deadline
FROM EXPERIMENT TO LAW
The VHA reported its success to members of the U.S. Congress, who liked what they heard. The timing couldn't have been better. The Veterans' Mental Health and Other Care Improvements Act of 2008 recently had been approved by the Senate and moved to the House of Representatives. It was signed in October 2008 with a new stipulation based on the VHA's plan: The Department of Veterans Affairs had to establish seven CPACs by September 2013.
“We were marching down the path, and Congress saw the value and put it in legislative language,” Ms. Mardon says. “We were prepared.”
With the first CPAC up and running, Ms. Reed and her team had to determine where the next six centers would go. First they looked for existing consolidation (like Asheville) or VHA sites that had extra space available. Concluding that wasn't an option, they searched for affordable leasing opportunities, compared build-out costs and cost of living, determined whether the community in question could support a major staff hiring, and even examined the potential for natural disasters. The VHA team settled on six areas spanning the country: Middleton, Wisconsin; Smyrna, Tennessee; Orlando, Florida; Leavenworth, Kansas; Las Vegas, Nevada; and Lebanon, Pennsylvania. Their logistics plan mapped out timelines and construction milestones to get all six new brick-and-mortar centers built and outfitted with furnishings, phones and computers.
Simultaneously, and with the help of Kathleen Root, PMP, deputy director for quality and performance in the CPAC program management office, and Ryan Lay, PMP, a consultant from healthcare advisory firm Altarum Institute in Ann Arbor, Michigan, USA, Ms. Reed and Ms. Mardon created a project plan to direct employee training and implementation.
“Right from the beginning, we had an advisory committee of medical directors, network directors and HR folks,” Ms. Mardon says. “That group was helpful to make sure we were not doing all this in isolation.”
In addition to gathering the committee's advice and drawing from lessons learned during the pilot process, Ms. Reed's team met with staff members who might be required to learn a new job or relocate. The team also sat down with the leadership at the medical facilities whose operations were primed for consolidation. Those executives wanted to ensure a seamless transition for their employees and negligible impact on their collection performance during the transition period. Ms. Reed's team helped the executives develop ways to communicate to their employees how the change initiative would take place—which in turn earned the leaders' trust.
“With anything that involves human nature, there's always resistance to change,” Ms. Reed says. “With a project of this size and scope, we definitely saw that. The beauty of what we were able to do was that we could anticipate those items that staff or facility leaders would be resistant to.”
“With anything that involves human nature, there's always resistance to change. With a project of this size and scope, we definitely saw that. The beauty of what we were able to do was that we could anticipate those items that staff or facility leaders would be resistant to.”
The VHA's culture helped ease the change, she adds. “My experience in our organization has been that if you can demonstrate efficiency, effectiveness and improved performance, people will come on board quickly,” Ms. Reed says.
The team members established a transitional plan to train 2,845 staffers on the consolidated system, including current employees and 1,817 new hires, both virtually and on-site, and determined the order of implementation. Beginning in Wisconsin, and soon after in Tennessee, and then Florida (the smallest CPAC, supporting seven VA medical centers and 47 VA clinics), they employed implementation teams consisting of members of staff from each of the facilities being consolidated plus leadership from each CPAC. The team transitioned one facility about every other week.
Overseen by a change control committee, each transition started on Monday, with everything at the new location, from computers and files to desk chairs and staplers, ready to go by Friday. Meanwhile, revenue operations continued per usual at the old billing centers. The following Monday morning, the switch would flip, and all work would be funneled to the CPAC, with no disruption of services and no dip in revenue.
“We had a very structured risk management plan and did continuous risk assessment, but the accelerated schedule brought up two important concerns: staffing and resources.”
—Kathleen Root, PMP, CPAC Program Management Office, Washington, D.C., USA
A CHANGE OF PACE
By the end of 2011, three years into the program, four CPAC projects had been successfully completed. That's when the VHA ramped up the pace. “As we continued to evolve the business case, the benefit of accelerating the schedule became very apparent to us, and we decided to move to a four-year timeline instead of five,” she says. “With the increase in collections and performance we expected to drive through implementation, we needed to do it sooner rather than later.”
Instead of building the final three CPACs in a stairstep sequence, the team put them on “pretty much the same schedule,” implementing them simultaneously and shaving a full year off the timeline.
“We had a very structured risk management plan and did continuous risk assessment,” Ms. Root says, “but the accelerated schedule brought up two important concerns: staffing and resources.” A phased approach to staffing was developed that increased the speed of hiring to keep up with the highly compressed timetable. To address the associated hurdle of making sure the new staffers could quickly access their work, Ms. Root set up a specialized CPAC IT help desk and electronic service request process to ensure that all employees were able to log in and begin work immediately at their new posts.
THE TEAM MEMBERS ESTABLISHED A TRANSITIONAL PLAN TO TRAIN 2,845 STAFFERS ON THE CONSOLIDATED SYSTEM, INCLUDING CURRENT EMPLOYEES AND 1,817 NEW HIRES.
The Kansas, Nevada and Pennsylvania sites all went online by September 2012, beating the 2013 deadline by a full year. The project came in at 99.7 percent of budget, and performance in the latest fiscal year, 2013, beat pre-consolidation numbers on all fronts. Collections were up 18.4 percent, the number of days to collect from insurance was down from 56 to 41 (the industry benchmark is 47.31), and the VHA nearly halved the proportion of claims that languish unfulfilled for more than 90 days.
The CPAC projects progressively benefited from lessons learned on the ones before. “The last three CPACs went up much smoother than the first ones when we were still testing the philosophy,” says Ms. Reed. “By then we were so in tune with when we had to have staff on board and how many billers we needed to cover the facility's work that we had it down.” She laughs and adds, “We were very busy and we probably didn't know our names on some days, but we were able to get it done.” PM
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