Revenue Enhancement and Cost-Saving at the Palo Alto Medical Foundation

The Palo Alto Medical Foundation

 

The Palo Alto Medical Clinic, was founded in 1930 as one of the nation's first group medical practices. Operating as the Health Care Division of the Palo Alto Medical Foundation, since 1980, the Foundation and its satellite facilities affiliated with Sutter/CHS in Sacramento, California, joining one of the largest integrated health care providers in California.

 

Along with many other health care providers, the 200 physician, multi-specialty Palo Alto Medical Foundation* is experiencing both a planned and a market driven shift from a fee for service to a managed care reimbursement base. The majority of its patient population is seen under capitated HMO contracts.

 

"The emergence of industry coalitions is driving down contractual reimbursements by 10 to 15 percent below prior years," states David Druker, M.D., the Foundation's Chief Operating Officer. "Palo Alto Medical Foundation has plans not only to survive these changes but to grow strong and continue to provide high quality care for which it has been known for two-thirds of a century. The driving forces are cost, quality and competition - of which cost is the most powerful right now."

 

Among the costs targeted for reduction were the costs associated with processing, editing and entering the charge and visit data generated by approximately 1,000,000 annual patient visits to the Foundation and its satellite facilities. This task required a 12 full time employee data entry staff working a variety of double sided, specialty and site specific documents designed to capture charge, diagnosis, procedure, patient demographic, materials, provider work RVUs, and HEDIS information. A single form contains over 400 discreet data fields.

 

Physicians hand write descriptions of diagnoses on five percent of the charge documents, rather than selecting a pre-printed ICD-9 code. Consequently, one full time employee is required to screen and assign the appropriate code prior to keying the document. Following charge entry, a questioned charge, that is, items which do not match to rule-sets, would be researched by retrieving the document from a paper archive. This process requires the service of an additional employee.

 

The desire for cost effective, high technology work process improvements drove the Foundation's search for technology that would provide reductions in both the costs and processing time involved in this data entry task. The Foundation also wanted to increase its daily throughput of 2,500 charge documents to 5,000 charge documents, and to improve the accuracy of data entered. Other IS priorities and staffing restrictions mandated a system that could be implemented with limited impact to the existing IS project schedule.

 

 

The Palo Alto Medical Foundation selected MCCS, the medical forms recognition and database system from MediScan, of Sunnyvale, California to achieve their financial goals.

 

MCCS reads charge entry applications with a combination of Optical Character Recognition and Intelligent Character Recognition, depending on the type of data expected in each field--hand printed, machine print, barcodes or mark sense--all in one pass. MCCS can process thousands of medical forms per day with an accuracy rate above 95%. The recognition engines are based on the latest neural network technology, recording confidence levels for automated editing by an operator.

 

MCCS processes data entirely without operator intervention and has integrated intelligence to verify data for medical forms automatically. MCCS has built-in medical intelligence to validate the data fields for customized standards relative to CPT procedure codes and ICD-9 diagnosis codes. The system is integrated with Ingenics Claim Manager, a nationally acclaimed coding system which applies over 3.5 million rule sets to the data being read. MCCS can provide additional data entry solutions; it provided Palo Alto Medical Foundation with the ability to automatically post co-payments made at the time of service.

 

MCCS is a complete solution with scanner, software, servers and workstations. All equipment, with the exception of high-speed scanners, is Hewlett-Packard. MCCS has a processing workflow operating in Windows and Windows NT environments, with advanced data transfer and statistics reporting features.

 

MCCS is easily integrated into networks using TCP/IP, which simplifies the connectivity to mainframe systems. For Palo Alto, data from scanned documents were reformatted and batched for input into a customized import editor, thereby requiring only nominal IS interface. MCCS also has the capability to input validated data directly into a mainframe data entry screen, which permits real time editing, again with only minimal local IS interface.

 

Using the MediScan system, Palo Alto Medical Foundation has reduced the number of full time employees in its data entry department from 12 to 5 members. Today these 5 staff members handle the targeted 5,000 charge documents daily. Researching previously scanned charge documents from the images archived saves time and frees personnel to perform other tasks. Increased accuracy will allow the Foundation to archive charge documents for a shorter period of time and discard the paper document immediately.

 

Palo Alto Medical Foundation currently estimates that the MediScan System has increased revenue data entry by at least $1 million to $1.5 million per month. representing approximately 12% of its annual revenue.