The Pulse: Driving Financial Success in Healthcare Facilities


In this episode of The Pulse, Lori Cox is joined by Lamon Willis, a seasoned expert with 20+ years of experience in healthcare auditing, billing, coding, and consulting, now serving as Solutions Director at AAPC Audit Services. Together, they dive into the challenges and opportunities facing healthcare institutions today, highlighting key areas to identify root causes for gaps in reimbursement. From navigating the complexities of hospital margins to leveraging price transparency regulations, this episode offers insights to empower you to make decisions that lead to financial success. 

Key Discussion Points: 

  • Hospital margins and financial challenges 

  • Price transparency and competitive dynamics 

  • Contract negotiation and management 

  • AI and technology in revenue optimization 

  • Identifying revenue drain areas 

  • Pre and post charge audit reviews

About the author

Lori Cox

Lori Cox has over 25 years of experience working in the business side of healthcare. She began her career in patient accounts and then moved into billing and coding for a multispecialty clinic. She was eventually promoted to billing supervisor and then to compliance officer, where she wrote, maintained, and trained employees and providers on fraud and abuse. Currently, Cox works for AAPC Services as Director of Client Engagement, performing audits and education for clients across the U.S. She has spoken at HEALTHCON and regional conferences and has traveled the country educating coders and physicians on complex coding topics such as hem/onc and E/M guidelines. Cox is the past member relations officer for AAPC’s National Advisory Board.

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Full Transcript

Lori Cox: Hello, everybody, and welcome it back to our latest podcast called the pulse. This is Laurie Cox with a Apc. We're here today to again continue our conversations on everything that has to do with the business side of healthcare cause. That's

Lamon Willis: Sure, thank you, Laurie. I'm glad to be here. I'm layman, Willis. I'm the business solutions director at Aapc.

Lamon Willis: and I've been working in health care for about 20 years.

Lamon Willis: Probably a little bit more than that. But we won't give it all away right away doing, auditing, billing, coding consulting for hospitals and physicians across the entire country.

Lori Cox: Yes, I know you have been around for quite some time, because I was repurposing a webinar once a while back, and it was one that you had written, probably even before the year 2,000. So you have been in this field for quite some time. Your expertise is very much appreciated.

Lori Cox: One of the things that layman works on that I have not a lot of knowledge of is when it comes to facilities. And it comes to all of those wonderful things that have to do with the revenue cycle on the facility side. So we're gonna kind of focus on that today because

Lori Cox: You and I had discussed a couple of times, but hospital margins run on a very small margin. Right? So can you talk to me about that a little bit?

Lamon Willis: Sure. So no hospital margins are not what people will usually think of when they think of something that they might consider a profitable area of business right? So the profit margins for many hospitals today, are running on average about 2.5

Lamon Willis: which is down from the past in the past, especially during the pandemic time. The profit margins were up likely, because you know, a lot of the costs were down, and the Federal Government were providing an offset of money to help to have cash, right? Things have kind of changed

Lamon Willis: labor, you know, has risen, and when a lot of costs rise, it's not often that hospitals meet the demand of the rising cost by raising their prices. And that's something that you know they're all scared to do. But it's something that eventually you have to do if you want to, you know. Stay ahead of the curve, so to speak.

Lori Cox: exactly, and we talked about the price transparency. Now hospitals are required to put their pricing for the whole world to see. And I think that raises some competitiveness.

Lamon Willis: Yeah, it does. It raises an area of not only competitiveness, but you know a a new area of.

Lamon Willis: I guess opportunity in some sense, and that, you know, people will see what you charge for something but everyone doesn't. I shop for healthcare that way? Right? I mean, you might have a

Lamon Willis: a particular service that you know. You know you have to have done. It's something you could schedule, maybe 6 months out. It's not an emergency thing. But you're gonna have it done. So yeah, you might shop around for that. You might see where you might be able to, you know. Get the most bang for your buck, so to speak. But most of the time, you know, in healthcare, we don't really do that. We we have providers that are close by. We have people, we trust

Lamon Willis: we have people that we have to do business with, maybe because of our insurance plan. So you know, that's one of the things that you know will remain to keep people in a certain area, or at least in loyalty. The only thing that offsets that really has to do with high deductibles and or copays and things like that

Lori Cox: right? And you make a good point about being in network, or even in rural areas where we don't really like, I'm in a rural area. So I have very few options. Unless I want to travel a couple of hours to St. Louis. You know, I'm gonna go to my hospital

Lamon Willis: for my procedure, and maybe they do charge more than I would get in St. Louis. It's probably vice versa, but still you know a lot of people that you don't think about it. You just, you know you go see your doctor. He says you need to have you know your gallbladder removed, and he gives you the name of a surgeon, and you go to the surgeon, and it's just kind of streamlines from there.

Lamon Willis: You you've got that huge deductible, maybe, that you've got to overcome. And and then you begin to like, think, Okay.

Lamon Willis: where? Where can I get this service done? And how much is gonna cost. And do I even need to report it then to insurance? I mean, those are all questions that people start thinking about. And so, yeah, I mean, you know, being locked in a certain area really kind of sets the tone. And I think it's why

Lamon Willis: organizations try to take advantage of that and or insurers as well, you know, an insure will try to lock up a a certain collective of either organizations or areas of a Tri state. Let's say, area they'll try to lock that up for a contract and and keep things rolling with their plans.

Lori Cox: Oh, well, and that brings up a good point, too. Hospitals will contract with their payers that are prominent in their area to try to stay competitive with other hospitals in the area. And I wonder if that's

Lamon Willis: leading to somewhat of the margin. Decrease right? If they're not really paying attention to their contracts with their payers, they could be short changing themselves. Savvy contract management staff, who know what the landscape looks like, what it might change to.

Lamon Willis: You know who your big employers are in the area. You know, if you have a if you're let's say you're right on the outskirts of a large urban sprawl. And you know there's a tech sector, let's say, in your neck of the woods. Then, you know, you can kind of see in the future that that's gonna continue. That's gonna be that way. But if you had a

Lamon Willis: a a different type of employer who has, let's say, electric vehicle manufacturing, you know, then then, you know, that's that's still a area that is fluctuating right? And so we don't yet know how

Lamon Willis: that will all shake out in the future, and and what the main type of Ev tech will will be the proponent in the United States, whether it's going to be a battery powered or hydro power, or you know. So you know, that's that's not so. That that will overturn some of those contracts, and you know it will change the landscape of your population of health that you need to depend on as your organization moves forward.

Lori Cox: What kind of skills does a person need you think to become a contract negotiator? I mean, they've got to have some legalese right? But they maybe not necessarily have to be attorneys.

Lamon Willis: Right? Yeah, I guess they have to know they have to be kind of like a jack of all trades in in that instance, like you're saying, they don't have to be one thing or another, but they have to be really good at team reading between the lines. I guess you'd say I worked with a guy at an organization. He

Lamon Willis: was a very successful contract negotiator. He was able to. You know, it gets millions and millions of dollars back from a insurance plan

Lamon Willis: that had not paid properly to a group of physicians we did business with, and of course everyone was happy when he had done that, and most of that he had done over the phone, you know. And so, you know, my first thought was, I want to take him to the next car by an experience deal on a car that I've ever had, you know, but you know he was. He was a skilled

Lamon Willis: really compromise, or in a sense, and that he was able to bring both sides to the table and say, well, you know.

Lamon Willis: we know that we're right. But we know we're not gonna get everything we want. So you know. How do we? How do we come to the middle and and

Lamon Willis: benefit each other? You know we want to continue the plan, but we need to be paid for what we're doing. So

Lamon Willis: he was very successful at making that happen

Lori Cox: interesting. That's that's funny. I like that car salesman analogy. That's totally the truth.

Lori Cox: We need that, I think, in a lot of aspects. But I agree with you that that person that's doing these contract negotiations does need to be able to read between the lines, have those different skill sets, and then it needs to be

Lori Cox: well known throughout the organization, right? Because facilities like like coders could get a denial on their desk, and it says something to do with the the pricing or the contract right, and some of them are like, well, we have no idea what's in the contract. And to me, that's a problem

Lamon Willis: that's and it's not only a problem for them, but it's like, it's a problem all the way up the food chain to people who may be in a senior level of management. Let's say the person who's the revenue integrity or revenue cycle director, both of those. If there's 2 different roles running that or if it's just one role that's combined.

Lamon Willis: you know, that person probably has some knowledge, you know, based on how again, savvy they are. They have some knowledge of what some of those contracts may look like. What's in there

Lamon Willis: but to the degrees that they share that information. And what value that will be to people down in the front line trenches, you know, doing the busy work. How how will that benefit them? And what would they need to know with that information? So, you know, being able to properly not only share that, but make it relevant to what they do is also necessary

Lamon Willis: myself, like in a role that I previously had. Like as a charge master person at a hospital, you know, knowing that we had carve outs for different service lines, if you will, we did it by revenue code, but knowing we had different carveouts that you know we were paid appropriately.

Lamon Willis: A different mechanism, a different price for something for some payer versus another meant that we had to ensure that whatever went out on the plane for that payer. That revenue code was this, you know, so that we got paid, and you know, for for what we extended

Lamon Willis: for different surgical procedures. And so you know, that type of information is is just. It's it's either

Lori Cox: profitable or it's detrimental. It's there's nothing in its way right? That was gonna be. My thought was that this leads directly to the profit margin that we were talking about, because if someone on the front lines doesn't understand Copays and deductibles even. We're wasting time on the back end trying to make those collections when it could have been done upfront

Lamon Willis: right? And and so, you know, using that as an example, how long does it take for an organization to then, let's say, discover that information

Lamon Willis: share the information, provide training that actually benefits everyone and then see it turn it all around and, you know, begin to see a increase in your revenue as a result of it. Well, that could take, you know, months and months and months it could take even years, possibly depending on what's going on in your organization. How many times staff are in different areas?

Lori Cox: Well, and that's a good point, too. The staff turnover. We talk about that quite a bit as being a direct impact on profit.

Lamon Willis: Right? Right? The staff turnover and the the staff who are actually

Lamon Willis: trained and know what they're doing. Right? So it's it's fine to bring in people and and to to train them. But but then, you know, sometimes we end up training people for another job and another organization. It's a terrible feeling that you know you like, I got this new person, and they're just an open book, you know, and II teach them all these things. And then one day they realize you know the grass is greener, so decide to fly away.

Lamon Willis: So

Lamon Willis: it's it's it's important that we have some type of mechanism in place to help retain good talent when we find it when we develop it. And it's important that you know, we take advantage of that where we can.

Lori Cox: I agree. I agree completely.

Lori Cox: Well, let's take a quick break here and we're gonna come back and continue our discussion on facility and revenue

Lori Cox: alright! Welcome back to the polls. We are having an interesting conversation with my coworker layman. We're talking about facilities. We're talking about revenue cause. Revenue is, of course, the hot topic, I think, in all areas, not just on the facility side, but the pro fee side too, as well. And so we were talking about the facility side we were talking about. Here

Lori Cox: So one of the things I think you and I were kind of doing with a couple of the clients that had called us. As we were looking at their service lines or or their revenue lines. However, they defined them, and trying to find some deficiencies. Let's talk about that a little bit. Where are some things that you've seen?

Lamon Willis: So you know, one of the things in the hospital setting that is usually

Lamon Willis: if a thing that you focus on is your inpatient coding. It's one of the biggest ticket items that you will have

Lamon Willis: money that you're expecting to come in right. So you've got a person who has admitted to the hospital.

Lamon Willis: let's say they stay in for 25 days. You know, and so that that Drg. Or the you know, payment for the length of stay that therefore, is going to be something, you know, possibly very huge. It could be several $100,000. Right? So you know, depending on your population. And how many of those applications that you have

Lamon Willis: flowing through your organization? You know, you've got a lot of coding that's taking place for hundreds and hundreds of thousands of dollars a patient. And so that could be extra millions of dollars a month over the course of that year. You've got billions

Lamon Willis: of dollars that you know, you're expecting a return for the services that you're providing right? And so this is an area of focus that the internal staff members are are

Lamon Willis: tuned to. It's an area that you're seeing. Your leadership are looking at, and you know, for many, many different reasons, not just for the revenue, but for quality, right for efficiency and for patient satisfaction all those different things. But it all comes back to. Well, we've got to have money in order to provide the service right? And so one of the things that happens is

Lamon Willis: you don't get paid sometimes what you thought you should have been right. You get something less. You get something different than that full drg that you're expecting. And that's because someone's doing audits. And they're saying.

Lamon Willis: you know, you didn't code it right? You you or maybe you missed out on something that you were supposed to take advantage of as an organization, and reporting something appropriately to to get that extra on top of the Drg. That transitional payments. That's something uniquely tied to either new techniques or new

Lamon Willis: hardware and devices and things like that that are tied to extra revenue. And so there are companies out there doing business in the software support arena in which they are trying to help hospital organizations make sure that they don't miss out on anything like that. And so a a hospitals will contract with them to help with that.

Lamon Willis: And and it's and it's good that they do. Unless you have like, I said. You know you've got plenty of staff, and you've got well trained staff. Who can do that for you. But that's that's an area of extreme focus that's been going on. And I think nothing really will change with that in the future. It's gonna continue.

Lori Cox: I agree. And I think that. And we don't wanna focus on AI because I feel like we be AI to death these days. But that's coming right. And that's one of the things I think that it's leading to is that AI can help

Lori Cox: especially on the facility side, where ABC has partnered with semantic health recently, and semantic health has a program that can kinda do the Drg. However, somebody still has to oversee the AI. Somebody has to teach AI right what to look for and what not to look for. So there are good and bad points to all software. And you and I kinda discuss that, too, where

Lamon Willis: you can have software, you can have a vendor that promises you the world, and they give you nothing.

Lamon Willis: Who, you know, kick off. Meeting was great. You know, all the staff seem really nice. Their their software that they're going to be using. Maybe it's their own internal proprietary software. Seems like it. It's you know the bees needs, you know, as you say.

Lamon Willis: and and then in the wake of some type of delays or or the stretch of of you know what's gonna happen during the process. Something changes, something ends up being not what we thought. And it's different from what the contract is. And

Lamon Willis: something just happens. And so you you find out in the long run you didn't benefit from that experience and you know, something took place and something changed, and it didn't work out quite the way you thought. And that's always why it's important not to just know. Well, you know this. This organization is their claim to fame as this, and we know who they are

Lamon Willis: or they've got this great tool. But to have a return on investment guarantee right some type of some type of offset, some type of mechanism to say, Okay, you show us this return, or else. You know, the contract is this, it's not the full amount, but it's this amount. It's a some lesser amount of something like that. I think that. You know.

Lamon Willis: organizations are starting to see the light on the need to do things like that. Yeah, I agree. And I think that kind of ties into what we were talking about before the break, where you've got to have that person that understands contracts and can read those fine lines and the fine print that says, you know, what is my roi on this and what happens if I don't get an roi on this right? So I think that ties in as well.

Lamon Willis: That's exactly right. You know those many of those organizations that are trying to find you money that way. They're they're either going to get paid a percentage

Lamon Willis: of, you know, either the individual claim or maybe the revenue for the month, that they generate the extra revenue, or something like that something that failed. Maybe it was denied and they got it paid. They're gonna say, you know. Well, we we were able to successfully get it paid where you weren't, and so we deserve this amount of money. Well, that that's all fine and good. But.

Lamon Willis: you know you've you've got it even in at that level. You've got to ensure that. That's actually the case. Right? It's it's not something to do with. You didn't dock your eyes and cross. So you need to have something where people have looked at and say, Yeah, you're right. We did not know that we needed to do that, and you were absolutely right, you were able to do that, so they would deserve their money for that.

Lori Cox: Are there any service lines in the facility setting? Like. I know I do a lot of pro fee, and so I can speak to that side. I know that infusions, for example, are a revenue drain, and and that they're never documented correctly. The drugs aren't documented correctly. But is there anything on the facility side that you see? Focus? That is a big, miss.

Lamon Willis: Yeah. So I guess it changes at different times. But the the infusion therapy services with the drug products is still one that usually an organization has to be well maintained and managed. You know. High cost radio pharmaceuticals

Lamon Willis: or biologics have to be, you know, reviewed routinely with in conjunction with pharmacy, personnel and or other clinicians in the organization and the radiation therapy oncology settings. To ensure that you know those particular products that

Lamon Willis: ha! Have have a high dollar and short shelf life are maintained appropriately right? And that you have all the proper mechanisms to report them and get reimbursed for them, so that continues to always remain

Lamon Willis: a functional issue with a lot of different staff overseeing it, or

Lamon Willis: a couple of brainiacs that might oversee it. And then that becomes something where? Okay, that person can never leave the organization. That's right. So you need to. You need to think about things like that, you know. But yeah, it that still remains an issue. II guess some of the other areas, though that would.

Lamon Willis: you know, really come to mind are just areas where you need

Lamon Willis: a repetitive good workflow like in the emergency room and that the emergency services are you know, running smoothly, that you know you're accounting for all of your levels of care

Lamon Willis: and and any critical care. And then, in conjunction with that your or suite and your Obg end. Those are a couple of other areas where the focus can always be.

Lamon Willis: Take a look at and and finally tune it right to ensure that. You're you're getting the most for what you do there. And how you set up your charges, how you account for your supplies. So that you know there's not expenditure after expenditure that you don't get reimbursed, for

Lori Cox: I agree. So wrapping up here what are some

Lori Cox: steps that organizations should take, especially in this day and age. We know that financially, many of them are struggling. So what are some steps you would recommend to them.

Lamon Willis: But one of the things that you know an organization could do is, you know, have a pre and post

Lamon Willis: charge audit review on their service lines like, if they're outpatient services they would pick, you know, some surgery settings Ed Clinic some of those things that we've been kind of talking about the obgyn area,

Lamon Willis: you know, same day, surgery areas. So infusion therapy can take a look at those to see. You know what's going on, what your payers are paying you, if your contracts are are good or bad. If there's any tweaking to be done in those particular places and then, you know, also in the area of

Lamon Willis: denials it relates things that you're being denied on, and that payers are, you know, using third parties to

Lamon Willis: to do these little charge audit denials where they're just gonna they're just gonna tell them, probably, you know, we don't want to pay 10, so decrease these bills by 10 or 15.

Lamon Willis: However, we have to do that, you know. You send them a note and tell them. You know. 1010 of these charges are no good, you know, and so, you know you, you need to be doing the same thing when you get those denials you need to be thinking.

Lamon Willis: This is what they've done. And and how can I overcome that? What, what does that look like for me to go back to them and say, no, we did all these things. We need to be paid for them -

Lamon Willis: and refute that information.

Lamon Willis: So those are all areas where hospitals are already doing these things. But do they have, or they should be doing? And do they have the staff to them? Is question. And then let's say that they do have a couple of staff that, you know are able to look at some of those things. Can they look at them all, because, you know, I can assure you that many times these things are occurring

Lamon Willis: on such a routine basis that it's stacking up, and people are not be able to get to all of those

Lori Cox: I agree.

Lori Cox: Well, this has been very interesting. Thank you so much for joining me today. I appreciate it absolutely. Thank you. Everybody for listening to another episode of the polls, and we will see you next time.


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