Case Study — Sky Lakes Medical Center

Abstract

A potentially ominous storm was building over Sky Lakes Medical Center. Days in A/R were at nearly 90, billing processes were manual and labor intensive, and management turnover left the facility without a CFO or Director of Patient Financial Services. A new director quickly assessed the need for change, and turned to inside and outside sources for solutions.

Sky Lakes Medical Center is a not-for-profi t, 501(c) 3, community-benefi t regional healthcare center in Klamath Falls, Oregon. The 176-licensed bed facility serves 120,000 people in a 10,000-square-mile area in south-central Oregon and northeastern California. As the only hospital within 200 miles for many in its service area, Sky Lakes plays an important role in the region as healthcare provider and employer. Creating bad feelings and losing trust in that community could have potentially

devastating and long-lasting eff ects.

This case study presents the internal steps taken at Sky Lakes Medical Center, including the external call for training

and assistance from RelayHealth. The billing processes were optimized through automation and an increase

in electronic submissions. Positive results were seen as days in A/R were reduced by approximately

25, claims were paid faster and accurately, and standing in the community improved.

Regional Health Center Uses Automation and Improved Business Processes to Survive Cash-Flow Crisis and Achieve Financial Goals Sky Lakes Medical Center: Surviving the Perfect Storm, and Thriving

Quick Facts:Sky Lakes Medical Center

• Regional Health Center located in Klamath Falls, Oregon

• 176 beds and 860 full-time employees

• Serves 120K residents in Southern Oregon and Northern California

Critical Issues

• Operating without CFO or Director of Financial Services

• Average A/R was approaching 90 Days

• Manual billing processes were hindering financial performance

Results

• Increased electronic transactions to approximately 80%

• Days in A/R have been reduced by approximately 25

• Increased net revenue by 4%

Sky Lakes Medical Center: Surviving the Perfect Storm, and Thriving

The storm at Sky Lakes Medical Center when Andrew Molatore became Director of Patient Financial Services was not unlike those that sometimes dump surprisingly heavy snow on south-central Oregon’s High Plateau.

Advice from experts for anyone trapped by such a storm, even experienced mountaineers, is twofold: Have provisions that will allow you to survive, and trust that rescuers are on the way.

Faced with A/R at nearly 90 days, manual billing processes, and changes in management, Sky Lakes Medical Center took similar measures to bring improvements in care to its service community in south-central Oregon and northeastern California.

From within, Molatore directed the move of Sky Lakes’ mostly manual billing process to an electronic platform and with Patient Financial Services (PFS) Supervisor Jennifer Bell helped foster a collaborative workplace culture. From the outside, he trusted RelayHealth Account Executive Debbie Garrett and Professional Services Consultant Blake Henderson to identify technology solutions that enabled the conversions that settled the storm.

About Sky Lakes Medical Center

Sky Lakes Medical Center is a not-for-profi t, 501(c) 3, community-benefi t regional healthcare center in Klamath Falls, Oregon. It serves 120,000 people in a 10,000-square-mile area in south-central Oregon and northeastern California. It combines a small-town feel with big-city medical expertise in its 176-licensed bed facility.

It is the area’s largest employer with 860 full-time equivalent employees, according to the Klamath County Economic Development Association.

“One thing that sets us apart is that we are somewhat geographically isolated,” Molatore says. There are medical facilities about 100 miles west in Medford, but getting there in winter can be diffi cult. For Klamath Falls’ 42,000 residents, and for many south-central Oregonians and Californians across the border 14 miles away, Sky Lakes Medical Center is the only accessible hospital for many of our patients.

Some of those patients were dissatisfi ed when billing statements arrived in the mail three months or more after their visits. “There were a lot of complaints, and bad feelings in the community,” Molatore says. “It’s a huge disservice to the patient when they receive statements fi ve or six months after the services were performed. It shouldn’t be happening, and we had to get those things fi xed.”

Changes in Management, Billing Formats, Outdated Technology Increase A/R

Change blew into Sky Lakes fast and furious in 2007. In March, UB-04 was implemented as the replacement for UB-92 as the standard form for paper claims. The center, then known as Merle West Medical Center, adopted its present name in May. And in October, the center’s CFO was leaving and there was no director for the Patient Financial Services department in place.

In 18 months:

Net Revenueincreased by 4%

Average days inA/R reduced by 25

“The biggest underlying issue was that we had so many manual processes done by multiple people across the offi ce.”

— Andrew Molatore

The hardworking Patient Financial Services team was doing its best to cope with the situation, but fell behind under the increasing workload. Days in A/R, good in years’ past, were trending higher.

“It really was like the perfect storm with all the changes,” Molatore says. “The biggest underlying issue was that we had so many manual processes done by multiple people across the office. We were spending too much time getting claims out the door, and making changes was difficult and required coordination with many people. We needed to automate the process with the tools available in ePREMIS.”

Molatore, who was born in Klamath Falls, had returned to the area as a financial analyst at Sky Lakes. In early October, he was named Director of Patient Financial Services. Entering the job with no billing office knowledge, he learned quickly there were many challenges beyond the normal day-to-day.

A new director and Bell, the new supervisor, were open to new processes and procedures, Molatore says. “We did what we needed to get things done. We made the change and moved on, and had as much structure to [the process] as we could.”

For the staff, changes meant working with new tools and expanding their knowledge of existing ones, which led Molatore to seek additional training and support from RelayHealth.

“Everyone was working hard but in isolation,” Bell says. “We created teams and leads to oversee the functions of the teams. We’re trying to get it to the point that everything is within the team dynamic.”

New Management, New Procedures, Positive Results

To help with training, Molatore turned to Garrett, who dispatched Henderson to Sky Lakes. At the end of his scheduled week-long stay, Henderson went home to Daytona Beach, Florida, but was back the next Monday. His frequent visits have totaled 14 weeks over the ensuing three years.

“I came out to do training with new staff, and we discussed their situation,” Henderson says. “It was like fate. Debbie got the people together to make it happen. We’ve worked together as a team to get the things that they want and need.”

After Henderson’s training session and support in optimizing ePREMIS’ features and functionality, the Sky Lakes staff got claims out the door faster and cleaner, decreasing the follow-up required. That left them time to focus on tasks where they would receive higher benefit, and established Henderson’s credentials in Molatore’s eyes.

“I’m usually extremely distrustful of all vendors and consultants,” Molatore says. “I normally don’t let them have free rein to do things without me looking over their shoulder. But we’ve been working together so long that we have an inherent trust in each other that allows us to progress faster than I could with other vendors. We have contracts and signed documents, but there’s a trust factor that we can overcome any issues that may come up.”

Much of that came from Henderson’s approach to getting RelayHealth solutions to work with a competitor’s system at Sky Lakes. Whether a goal could be best accomplished through optimization of ePREMIS or through changes to the other system, Henderson’s advice was invaluable and appreciated.

“Blake did more than just focus on his product,” Bell says. “The process was different because it was more collaborative, and more of a dialog.”

Following the automation and process changes, the center’s electronic transactions have increased from only those it was required to make (to Medicare) to approximately 80 percent overall, and 100 percent to electronically enabled payers.

After Henderson’s training session on ePREMIS’ features and functionalities, the Sky Lakes staff got claims out the door faster and cleaner, decreasing the follow-up required. That left them time to focus on tasks where they would receive higher benefit.

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Days in A/R have been reduced by approximately 25 over the past 18 months, and Sky Lakes is bringingin more cash — 4 percent over thepast 3 years’ cash/net revenue.

“There has been a systematic approach to improving things,” Molatore says. “We did an assessment to see where we could improve. Blake came on board to see where we were and prioritized what needed to be done. We started at the top and worked our way down, and we’re still doing that today.”

Next steps: Pare Down To-do List, Continue Productive Relationship

With more than 100 items on the original to-do list, the Sky Lakes team started with the most pressing task and is working its way down the list. When additional tools are needed, because of his experience with RelayHealth, Molatore knows where his search will begin, and likely end.

“I made the decision that if RelayHealth has a product that’s close to others on the market, I would go with RelayHealth for ease of use and the trust factor,” Molatore says. “I haven’t been in a situation where I’ve had to put that decision to the test, because I prefer RelayHealth products. Some of the other providers have cheaper solutions; RelayHealth’s are more robust.”

Other institutions have noticed the improvement at Sky Lakes and often call for information, and Molatore has been a great source of reference, according to Garrett. Other Oregon hospitals have moved to RelayHealth solutions, and the network helps payers get connected and make processes work better for providers and patients.

“We’re lucky to have Sky Lakes Medical Center as a client,” Garrett says. “I think the partnership is great between our organizations.”

Conclusion

Sky Lakes Medical Center established priorities to calm the storm created by multiple, interconnected problems — increased days in A/R, manual billing processes and management changes. The center’s Director of Patient Financial Services invested in training his hardworking team, and worked internally and in partnership with RelayHealth to establish new procedures and processes, and to optimize tools for electronic billing. An atmosphere of mutual trust and knowledge of need led to improvements in cash flow and workplace efficiency that continue to provide positive results today.

To learn more, contact a RelayHealth Solutions Advisor at 888.743.8735.

“Some of the other providers

have cheaper solutions; RelayHealth’s

are more robust.”

— Andrew Molatore