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Children's Hospital Los Angeles

Children’s Hospital Los Angeles Medical Group Revenue Cycle Optimization

Overview

Superior clinical performance needs to be supported by optimal financial performance. When new leadership at Children’s Hospital Los Angeles Medical Group (CHLAMG) realized the revenue cycle was compromising its clinical mission, a commitment was made to confront the problems head on.

the challenge

CHLAMG consists of 564 physicians offering specialized pediatric care to children from around the world. Despite its size and long-standing reputation for clinical excellence, CHLAMG struggled with consistently poor revenue cycle performance. In turn, physician compensation, staff satisfaction, and retention, among other organizational aspects, were negatively affected. “Our revenue cycle was completely broken and had been for a number of years,” stated Larry Harrison, Chief Executive Officer (CEO) of CHLAMG. “There was no single cause for this poor performance but rather a host of issues related to technology, inefficient processes, lack of transparency, and an absence of accountability.”

the process

CHLAMG asked ECG to conduct a rapid revenue cycle assessment geared toward surfacing areas of opportunity for both the near and longer terms. After delivery of the assessment findings, ECG was asked to lead the effort to improve revenue cycle performance, working with the medical group and its management services company, as well as the hospital administrators who had operational responsibility for the clinics.

Three key activities helped CHLAMG realize transformative results:

Improved Transparency and Communication

It was essential to provide stakeholders with timely, relevant, and accurate information regarding current performance as well as the changes being proposed and the progress made toward those goals. To ensure that this was achieved, a Joint Operating Committee (JOC) was created as the working group responsible for the turnaround project. This committee was overseen by members of the medical group’s board. Communication was improved through regular updates provided at the board, department, and division levels.

Established Special Purpose Task Force

To work down backlogs in areas such as authorizations, coding, and credentialing, special teams were created to focus exclusively on those areas for a designated amount of time. Additional resources were provided by an outside billing agency to expand bandwidth so that these backlogs could be reduced without CHLAMG falling behind on incoming volumes. Backlog reduction goals and timelines were established, and progress toward the goals was reported at the aforementioned JOC, as well as in other venues, on a regular basis.

Modified Workflows and Optimized Organizational Structure

It was essential to provide stakeholders with timely, relevant, and accurate information regarding current performance as well as the changes being proposed and the progress made toward those goals. To ensure that this was achieved, a Joint Operating Committee (JOC) was created as the working group responsible for the turnaround project. This committee was overseen by members of the medical group’s board. Communication was improved through regular updates provided at the board, department, and division levels.

ECG was organized and efficient and kept us well informed on a weekly basis. They were great communicators, which made me feel confident about what was happening, where we were in the process, and that we were hitting our targets.

Larry Harrison, CEO, CHLAMG

the outcome

CHLAMG realized significant and sustainable financial benefit throughout ECG’s engagement and increased operational efficiencies, as evidenced by the steady incremental improvement across many key revenue cycle performance indicators.

  • $7.6 MILLION in additional collections in the first seven months, primarily through the reduction in A/R, with sustainable long-term improvement of more than $1 MILLION in monthly collections
  • A reduction in A/R by 22 DAYS
  • A 67% decrease in the average time required to enter charge
  • Stronger management and accountability infrastructure