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The problem with the "consultant model" for revamping a hospital’s operation, says Jack Duffy, FHFMA, director and founder of Integrated Revenue Management (IRM), Carlsbad, CA, is that the consultant comes in and solves the immediate problem, but doesn’t systematically correct the underlying errors. His company, Duffy adds, "is founded on the principle that the way we can make a significant principle is to train the internal staff to do the sophisticated work that often has been purchased through a consultant."
The training emphasis is on revenue management, he says, and focuses on "the intersection between the bill and the [patient’s] chart." That includes registration and coding, charge choosing, contracting, and billing and collections, Duffy notes. The IRM package, he explains, includes a two-week curriculum at the corporate office in Carlsbad for a team of employees. Those employees return to their home hospital — with an advance practice trainer from IRM — for an additional week of training, Duffy says. (See "Company out to fill gap in chargemaster training," in this issue.)
After three weeks, the team is highly motivated and productive, he adds, but it takes two to three years to get it to the optimum level. For that reason, Duffy says, the IRM trainer — who is recruited from the hospital’s own community — is assigned to the hospital virtually full time. In the case of smaller facilities, he notes, one person may travel between two clients. "We start with the most sophisticated person we can find," Duffy says, "and that person receives weeks of training with the [IRM] core group."
Since IRM doesn’t charge contingency fees, he explains, it negotiates a "master fee" with the hospital and enters into a three-year contract. "We tell them honestly it takes five years to develop skill [at discovering revenue opportunities], and what they’re considering buying from us is the ability to accelerate their business to a five-year level," Duffy says.
IRM’s first client, he notes, discovered $1 million in additional revenue within 10 days of returning from the Carlsbad training session. That hospital’s investment with IRM is around $600,000 a year for three years, Duffy adds, "and their improved performance should be in excess of $36 million."
Consultants with fee-based or contingency services, he says, typically do a project in which they discover the high-dollar, incorrect payments. "They bill [the hospital] $300,000, and save it $1 million," Duffy adds. "For that same $300,000, we train [internal staff] to find the errors, and they find them every day, every year. It’s a dramatic difference in mission and approach." This approach, he says, "celebrates the hospital staff instead of them having a persistent feeling of inadequacy, a feeling that the real brains come from the outside."