Success story: Faced with closure five years ago, Florida hospital now in the black

Image removed.Five years ago, Boca Raton Regional Hospital in Florida was in financial ruin.

It faced a $124 million loss--in part because it had to give more money back to the Recovery Audit demonstration program than any other hospital in the United States. It had to go through three rounds of layoffs and was close to shutting its doors for good.

Today, the 400-bed, not-for-profit hospital can boast about a complete financial turnaround. The most recent financial statements, which have yet to undergo an audit, show the hospital has a profit of $1.2 million from operations and net income of $5.2 million for fiscal year 2014.

The rags-to-riches story centers on a new leadership team committed to change and staff that embraced a team approach and were willing to try new initiatives, including piloting electronic transmission of medical documents to Medicare, which had never been successful before 2010, says Rudy Braccili Jr., executive director of revenue cycle services, (pictured) in an exclusive interview with FierceHealthFinance.

Boca Raton Regional Hospital is unique because 65 percent to 70 percent of its patient population is on Medicare--higher than the national average of 30 percent to 35 percent, Braccili explains.

"The community in which we live is largely a retirement community with snowbirds who live six months a year in South Florida. It's primarily a senior population," he says.

Braccili, who joined the hospital in 2008, says mismanagement and failed leadership that left the 40-year-old hospital in financial ruin five years ago. The hospital cleaned the senior leadership house and replaced it on an interim basis with FTI Consulting, which literally occupied the C-suite. The following year, the hospital had an $11 million loss. In 2010 it broke even.

Now, with new leadership at the helm--most of whom didn't work at the facility six years ago, the hospital finally is in the black. Last year the hospital had a net income of $13.5 million. "We don't believe in saying 'don't change, that's not the way we do it here,' because ... we need to change. The old way brought us to our knees," he says.

Cost-saver: Electronic transmission of documents

One major reason for the financial turnaround was the hospital's successful participation of electronic submission of medical documents (esMD) to the Centers for Medicare & Medicaid Services. Braccili says the hospital became involved in the esMD pilot program after one of the 12 designated vendors approached him and asked to partner with the organization.

Although 88 percent of the hospital's clinical records were already automated in its electronic health record system, Medicare couldn't accept electronic submissions back then. It relied on hospitals to send paper documents to verify that physician documentation was signed, legible and included a date.

Paper documentation was a burden for all healthcare organizations but especially so for Boca Raton Regional because of its high Medicare mix, Braccili says.

The hospital's vendor partner--which previously only had experience with reimbursement in the dental setting--worked with revenue cycle staff to document the department's existing paper submission process. Even Braccili didn't realize how much time and paper the hospital used as part of the process.

A year later, the hospital successfully transmitted its first batch of records to Medicare. The savings in both cost and time were immediate--an estimated savings of a half million dollars. The solution also reduced rejected claims, from a claim denial rate of 40 percent to zero.

"It was revolutionary," Braccili says. The hospital no longer has to deal with the costs associated with paper, including toner cartridges and printing copies. "Our processes were so disjoined. We had to print the record from our existing electronic record system to scan it back in and send it back to Medicare and then shred the pieces we scanned so we also had the shredding costs. It's embarrassing, except everyone was doing it that way too," he says.

"Literally," Braccili says, "we would ship or send via mail reams and reams and cartons and cartons of documents to Medicare to represent a record of a patient. If a patient stay was as little as seven days, the clinical records would fill up a Xerox carton of copy paper. It was cost- and labor-intensive. And, overnight, it all disappeared."

 
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