Memorial Regional Health head clarifies billing decision
May 1, 2018
On April 25, the "what" regarding the decision to largely eliminate the billing department at Memorial Regional Health was known. As was reported, the decision impacted 24 people, including managers, supervisors, a director and front-line staff. The purpose of this letter is to talk about the "why." While I realize this letter may potentially upset some people, I believe it is important to address things head on.
Let me start by saying that none of the people displaced were perceived as "bad" people or "bad employees." In fact, several employees have been already re-hired by the outside agency, and for that, I am grateful. What I have to share is not necessarily a failure of the people who were displaced, but rather a failure of the processes, leadership and, at times, technology being used. We tried internally for approximately 18 months to correct billing process problems, without success. I take responsibility for the decision to outsource to a third-party.
Since 2013, MRH has "written-off" from the hospital $2,250,623.78 in a combination of untimely filing and administrative write-offs. These are claims that were either not billed, not billed correctly the first time, not rebilled when rejected or that missed the window for timely filing per insurance company rules. As an organization, we knew we could not continue to do it the same way; continuing along this path would be irresponsible to our community that we serve and our employees.
Prior to this decision, MRH had already partially "outsourced" billing functions to four different companies. After approximately 30 days, we sent accounts to two different extended business offices; then, in approximately 90 days following that effort, accounts were sent to two different collection agencies. The result for the customer was confusion, because if you called here for help, you likely were referred to one of these four entities. These agency contracts have been eliminated, and the processes will start to be streamlined. To provide you with a little insight, we have 5,740 accounts with dates for services from 2004-2017 from just one of the single collection agencies. The total balance of those collection accounts equals $6,670,353.
Unfortunately, we also have documented cases of sending our own staff and community members to collections having never first received a bill. We have anecdotal stories of people trying to obtain financing whose credit reports were lowered because their medical services accounts were submitted to collections prior to insurance review and payment determination. While the impact for MRH is not being paid timely or at all, the impact to some people in the community has been much more significant in terms of denied credit and higher interest rates on loans.
I would like to also address "cutting staff." At the beginning of 2016, we employed 248 individuals. As of today, the MRH workforce equals 374 employees. MRH has added 116 positions, excluding the 10 employees who came to us from Moffat Family Clinic and Centennial Home Care, LLC. MRH currently is recruiting for 46 new open positions, and we are committed to growing the organization and providing well-paying community jobs. Our ability to accurately code, bill, invoice and collect for our services is critical to our sustained operations, as well as to continue this employment trend.
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Employee turnover in the billing department has historically been a specific challenge for MRH. In 2016, the turnover rate in our clinic billing staff was 17 percent; in 2017 the turnover rate was 43 percent, and currently, in 2018, it equals 10 percent. It is difficult to recruit, train and retain staff in this important finance area. Significantly, 17 of the 24 staff members who were let go were employed with MRH fewer than two years.
Our core mission is "To improve the quality of life for the communities we serve through patient-centered health care and service excellence." We reaffirm our commitment to this mission and our community daily by striving to excel in health care service delivery. Coding, billing and collections are not a core health care services activity. Our ability to provide quality health care efficiently, though, is increasingly impacted by these finance functions. As such, to fulfill our health care mission, these financial services form the "core function" for our business model. I personally intend to minimize the impacts to the individuals or families involved in this reduction in the workforce. It is important to acknowledge that health care organizations, both smaller and much larger than MRH, regularly outsource billing functions to experts in this area. The reason for the reliance on outsourcing throughout the industry is very simple: We are just not good at it.
I am sensitive to the comments on social media and by others who have stated that "we're never using MRH again." My best answer that I learned from a lifelong resident of Craig who is also our chief nursing officer is the following: "We respect your decision, however, when you need us, we will be here."
I realize that this may not fully answer community questions. If you would like to talk directly with me, let's talk. I have cleared my schedule on May 11. I am here and open to addressing any ongoing questions or concerns. While we may not agree at the end of the conversation, hopefully, I can assist by listening to your concerns. Together, we can engage in a mutually respectful conversation to gain greater understanding and help improve health care for all members of our community.
If you would like to schedule time to sit and discuss these issues, please call 970-826-3100, and Julie Hanna will be happy to set up an appointment.
Andy Daniels is chief executive officer of Memorial Regional Health.