Productivity, revenue and patient satisfaction are critical elements in a physician practice's success, and all can be undermined by cumbersome or inadequate practice management (PM) technology. When a practice fails to adopt a reliable system that captures comprehensive charges, that scrubs to ensure that claims are payable, that generates accurate and timely reports, and that streamlines accounts-receivable management, it sets the stage for losing revenue, patients - and even physicians.

At Piedmont Medical Care Corporation (PMCC), we learned this lesson firsthand. Part of Piedmont Healthcare (PHC), PMCC is the administrative arm of the non-cardiology physician practice entities of PHC. Our group is currently thriving, with 95+ primary care physicians, and 62 hospitalists and specialists in more than 35 offices throughout metro Atlanta. However, as the 1990s drew to a close, PMCC was best described as a dying practice, due to our reliance on under-performing revenue cycle and practice management systems.

Financial, patient and provider losses

With about 50 physicians in 12 locations at that time, we found we were operating at a substantial loss and patient satisfaction had plummeted. Our existing balance-forward system was complicated and typically involved a six-month learning curve for users. Even worse, its capabilities were notably insufficient. The system limited the ability of front-end users to determine proper coding or answer simple patient questions at the time of service. Inquiries had to be routed through our information technology (IT) department. As a result, front-end staff assumed little ownership of the revenue process, relying upon their colleagues in the back office to clean up mistakes.

Furthermore, we found it difficult to correct rejected claims and, on average, charges languished in accounts receivable (A/R) for 75 days. So cumbersome was the system that we were compelled to devote one full-time equivalent (FTE) solely to generating reports, while completing itemized patient billing by hand. On two occasions, the system crashed for a week at a time, rendering it unusable for practice management activities.

Two parallel events spurred leadership to take action and initiate change. First, one physician abandoned his affiliation with us in frustration over the poor revenue cycle performance, as well low patient satisfaction related to the billing process. He had concluded that we were causing him to lose money and patients. The second wake-up call came from the hospital system itself, which was considering whether it should abandon our physician-employee group model altogether.

Exceeding budget and losing money, we were facing the possibility that the whole organization could go under if we didn't make changes to fix the revenue cycle. Leadership recognized that we needed to improve collections (which would in turn increase physician incomes), cut overhead costs associated with billing and improve patient satisfaction. It was determined that optimal organization and efficiency could best be achieved through adoption of a more advanced PM system.

The Year 2000: New millennium, new system

In 2000, practice managers, IT and central billing office (CBO) staff were selected to pinpoint the specific functionality they would like to have in a new PM solution. Our internally-driven process began with team members outlining everything they didn't like about the current system. From this information, they created a list of features that that were most important:

• User-friendliness (easy to learn, easy to use, supported with training);
• Windows-based;
• Scalable, enterprise platform to accommodate additional practices over time;
• Robust and customizable reporting capabilities;
• Input and editing functionality for front-end users;
• Platform stability.

Based on this priority list, the team generated a request for proposals and submitted it to nearly a half-dozen vendors. We invited practice managers, IT and billing staff to vendor product demonstrations and site visits to ensure each department's needs would be met by the PM system we ultimately selected. While some vendors offered implementation via a distributor and others provided clear technological upgrades, the ability to deal directly with the vendor and be assigned an on-site project manager solidified our decision to select the NextGen Enterprise Practice Management (EPM) system.

Designing, testing and training

Led by the Director of Operations, we formed a project team, assigned our own "super user" and front-desk site coordinators, and entered into a six-month design-and-build process. The biggest change, and challenge, was adapting our workflow to correct existing problems. Rather than leaving problems for the back-end staff or IT, our goal was to place greater responsibility with front-end staff so they would be more attentive to capturing accurate data and assume greater ownership of A/R. One strategy we adopted to achieve this workflow adjustment was assigning different facets of the building process to practice managers and end-users. In determining how the system should be set up and structured, these individuals were engaged with their new responsibilities early on.

The team met frequently and, for the most part, the process went smoothly. Resistance came primarily in regards to restructuring of the workflow. When decisions were uncomfortable internally, our on-site project manager was effective in being firm and pushing the team in the right direction to ensure that we would successfully utilize the many advantages of the system. After the design-and-build process was complete, extensive testing ensued. We tested numerous scenarios to ensure that the PM system would meet our needs, and ultimately each member of the project team signed off on a readiness assessment.

While the old and new systems ran parallel for a six-month period, staff members were trained during two-month induction and one-month follow-up rotations, intermingled with five-day super user training. The user-friendliness of the Windows-based system made it significantly easier for our staff to learn than the old system. Nevertheless, we emphasized the importance of training. We weren't willing to sacrifice thorough training in order to meet an arbitrary implementation date. As a result, our staff was well-equipped to use the new system when it was launched. This was fortunate, as the previous system "broke" during the transition, effectively forcing us to go live with the new PM system.

Crossing the finish line and reaping the rewards

Deployment began in 2001 and benefits were immediate. With the emphasis on front-end input, coding now takes place before the patient is out the door. The PM system also enables an image of the insurance card to be scanned and for subscriber identifiers to be created based on the insurance company and patient plan, thus helping to eliminate incorrect data entry. As a result, 90 percent of our claims get paid on the first pass. With the old system, the CBO was compelled to review half of the claims. That has been reduced to approximately 10 percent thanks to the up-front editing and greater staff ownership.

In short, the PM system has had a huge impact on our bottom line, and has resulted in multiple advantages and improvements:

• Increased physician income and gross collection rates;
• Elimination of errors and reduction in affiliated costs;
• Improved patient satisfaction with virtually no complaints about billing;
• Real-time management of information and data, thanks to advanced reporting and editing tools;
• Work force auditing, task assignment and access to activity status;
• Efficiency in the back office, with IT fulfilling its traditional role;
• 75 percent reduction in patient calls to the CBO;
• Decrease of 70 percent in claim denials; and
• Dramatic 66 percent reduction in average days in A/R.

In 2001 alone, our financial turnaround reached $1.6 million. Reduction in CBO staff fueled a $600,000 improvement in operations, aided by a 50 percent reduction in the cost of billing and collections. These enhancements have led to practice growth. Today, PMCC employs 157 physicians, while CBO full-time equivalency ratios remain well below MGMA standards. Improved operations has helped us capture MGMA "Better Performing Practice" recognition each of the last six years, beginning in 2003, and patient satisfaction scores have climbed significantly.

A final attestation to the turnaround: The physician who left at the end of the last decade returned in the winter of 2008.

Our decision makers, when faced with the organization's probable demise in 2000, didn't necessarily think that changing the PM system alone would save the day. In hindsight, however, it has become clear that if we had not done so, PMCC would probably no longer exist. Our current success demonstrates that the combination of technology and teamwork are an effective formula for physician practice success.

Berney Crane and Leyton Braud of Piedmont Medical Care Corporation (PMCC). Berney Crane is CEO and Leyton Braud is Administrative Director of the Central Business Office.