Mountainside Hospital utilizes strategic revenue cycle services and solutions to take a “better on the basics” approach to improve financial health

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For more than 120 years, Mountainside Hospital has provided quality, innovative care for the residents of northern New Jersey. Merit Health Systems, a leading private hospital management company, acquired the 365-bed facility in June, 2007*.

From the outset, Mountainside recognized it needed to standardize revenue cycle operations, boost cash flow and improve performance on basic issues such as reducing unbilled claims and producing “clean” claims for its payors. The hospital wanted an integrated, collaborative partner to help meet those challenges – a relationship that extended beyond the usual client/vendor mindset.

When an interim agreement expired under which the previous owner continued to manage billing and collections, Mountainside faced the choice of building and running its own patient financial services (PFS), or outsourcing the operations.

In 2008, the hospital opted to outsource, and after a rigorous RFP process, selected MedAssets. Merit and Mountainside had an existing relationship with the company as its group purchasing organization of choice and as a provider of both decision support and denials management services. “We had been very satisfied with the work from MedAssets on those fronts. They had personnel and resources in a nearby centralized operations office and we were confident they could run our PFS area,” says Hal Clark, Mountainside’s interim chief financial officer.

To reinforce a collaborative process, Mountainside and MedAssets began weekly face-to-face meetings from the start of the relationship. In attendance were Mountainside’s executive leadership and representatives from medical records, patient access, information technology, admitting and patient accounts. All issues from across the revenue cycle were on the table.

“We thought of the MedAssets team as an offsite department of the hospital,” says Nadinia Davis, Mountainside’s executive director for revenue cycle. “We didn’t glossover things; instead, we looked at all sides of issues and solved them together,” she adds.

“We’ve been diligent about getting down in the weeds to look at problems, getting in front of them and not just being reactionary when cash starts to dip. Cash that’s not of service and local involvement. MedAssets was an important partner in that endeavor.”

Using a wide range of MedAssets revenue cycle and spend management solutions, Mountainside Hospital:

• Improved its statewide ranking for operating margin, according to the New Jersey Hospital Association, from 32nd prior to beginning work with MedAssets, to the top ranking in the third quarter of 2011
• Increased cash collections from more than $170 million in 2008 to nearly $190 million in 2011
• Identified and resolved more than $2.5 million in backlogged held claims, using the MedAssets Claims Management solution that automates, standardizes and manages the claims process
• Recovered more than $1 million annually through Denials Management Services, while cutting the denials rate in half
• Raised its rate for processing “clean” claims to more than 80 percent
• Reduced supply expense, even as its Case Mix Index increased
• Lowered average length of stay, including a reduction from more than five days to less than four days for Medicare acute cases, through greater case management coverage and a shift in managed care contracts from a per-diem to DRG-based payment methodology
• Implemented government-mandated 5010 billing format edits, coordinating conversion of three different billing systems that flow into the revenue cycle, each requiring its own testing and transition on different timelines
• Used performance analytics from Decision Support Services to evaluate service line performance, creating customized multilevel reports to identify trends leading to increased margins or stop losses in specialty services