Each year the Federal government doles out millions to healthcare providers in improper payments for Medicare and Medicaid. To cut improper payments, the government stepped up efforts recently to root out risk, fraud, and compliance throughout the system. As part of the effort, the government closely audits healthcare providers for fraudulent and non-compliant billing practices. Where the government finds inconsistencies in a provider’s practices, it takes action by forging corporate integrity agreements (CIA) between with the providers.
Tenet Healthcare Corporation signed a CIA with the Department of Justice a few years ago. Tenet is an investor-owned health care services company created by the merger of National Medical Enterprise and American Medical International. Tenet’s subsidiaries and affiliates own and operate acute care hospitals and related ancillary healthcare businesses throughout the U.S. The Dallas-based publicly traded company (NYSE:THC) has operations in 12 states, from coast to coast to coast, including 50 hospitals, 55 outpatient centers, and 6 corporate and business offices. The majority of Tenet’s hospitals (60%) are in California, Florida, and Texas.
Under Tenet’s CIA, the company agreed to revamp specific operating policies and procedures. It also agreed to revamp specific billing practices and rebuild its governance, risk, and compliance (GRC) process. As part of the GRC rebuild, Tenet agreed to introduce technological capabilities substantiating compliance to outside auditors from a review team. Its job is to make sure Tenet operates under the provisions of the agreement.
Revamping Its GRC Program
Tenet’s original GRC program consisted of 14 stand-alone workflow/BPM applications that monitored, managed, and reported on Tenet’s compliance efforts. Todd Coffee, Tenet’s senior director of Enterprise Process Solutions, is responsible for the company’s BPM activities. He inherited seven of these applications after joining the firm in the fall of 2003. By 2006, that list had doubled to 14. All the applications were built on different platforms. “Basically, they pushed around electronic pieces of paper being routed for approval,” says Coffee. “The document flows were serial in nature, simple, and helpful to back-office operations. But the applications weren’t really BPM solutions.”
Over time, the number of stand-alone workflow applications began to constrain Tenet’s governance capabilities. As a result, Coffee and his IT team decided to re-visit the compliance process to see if they could derive a better solution. At issue was whether to replace the system or continue to invest in it. Coffee and his team engaged senior business people, project managers, and technical leaders. Everyone came to the same conclusion: Tenet needed a change. Thus, Tenet decided to re-platform the stand-alone applications into a single software solution.
After making the decision, Tenet’s challenge became finding a single platform that would do what the company wanted. It would need to incorporate key portions of the legacy applications, yet still let the company re-engineer the GRC functions needing improvement and expansion. “We had every system imaginable in our infrastructure, from mainframe and home grown systems to client server and .Net apps,” say Coffee. “Obviously, integration was a primary concern. Another concern was the completeness of the solution. We wanted a fully integrated BPM solution, not one with 20 components.”
IT Team Researches Solutions
Coffee and his team spent six months researching solutions. The effort unearthed eight candidates, including several major BPM software providers. Coffee and his team cut the eight candidates down to two. Both were asked to complete a proof of concept stage. Each POC lasted four and a half days. The vendors had to install their BPM solutions and complete a series of technical and functional use cases. “It was a rigorous test,” says Coffee. “We wanted to see how the applications did with a real use case. Although we were impressed with both solutions, we felt that Pegasystems’ SmartBPM solution was the right fit for us.”
Pegasystems’ SmartBPM suite provides a seamless and unified environment that streamlines application design and deployment. Process flow, integration, presentation, customer experience, case management, security, and governance are all unified within a single platform. The unified and seamless environment sets SmartBPM apart from other BPM solutions—many of which are a collection of loosely coupled components that must be integrated. This approach complicates and delays application design and deployment. It also makes it harder to achieve process improvements and slows return on investment. SmartBPM, on the other hand, simplifies the process. It lets organizations build applications using a common set of models and views.
“We wanted a robust single point solution that didn’t require ‘bolting’ components together,” says Coffee. “That was critical, especially when we considered installation, support, and development activities. Eventually, it became the deciding factor in our selection. Other selection factors,” says Coffee, “were SmartBPM’s development platform and its comprehensive business rules engine. That combination gave SmartBPM something the other BPMS couldn’t match.”
Installation Goes Smoothly
The solution’s installation went smoothly, sys Coffee. “It took us longer to install the system than normal, even for a solution as powerful as SmartBPM,” says Coffee. “But that had nothing to do with the BPMS. We outsource our IT services to a third party, which has a rigorous baseline best practices program it follows for projects like this. As a result, we spent a lot of time on enterprise components that had nothing to do with the BPMS, but were necessary. Otherwise, installation went quickly”
After installing the suite, Tenet focused on developing the GRC application. To speed development, Pegasystems professional services team helped with the initiative. “Pegasystems was a big help in creating the application,” says Coffee. “We got them involved because of the project’s importance. Among other things, the team served as a sounding board on how to work best with their solution. With their help, we went from enterprise components to first release in only six months, saving us about six months worth of work,” adds Coffee.
Tenet leveraged Pegasystems’ Control and Compliance Framework in rebuilding its GRC application. The framework provided turnkey functionality specific to GRC-related activities. It also provided 4,000 established rules—about half of what the application would eventually require. Using the framework let Tenet familiarize itself with the SmartBPM solution before trying to develop its own application. After creating Compliance Central, Tenet migrated the core of its original GRC solution to the new application with no hassle. It also broadened the scope of the application’s functionality and eliminated any auditing deficiencies.
Operating Without Problems
The GRC application went live in early 2009. After debuting Compliance Central, Tenet leveraged SmartBPM’s capabilities to develop additional applications beyond risk, fraud, and compliance. One noteworthy success was its CARDS application, which tests coding accuracy in real-time and checks on patient invoices before creating a claim. As Tenet’s staff abstracts appropriate procedures and diagnoses, and codes from medical records, CARDS gives instant feedback concerning the decisions, preventing denied or unpaid claims from occurring.
Tenet also built a Billing Editor Studio solution with SmartBPM, which helps maintain Tenet-specific data held within third-party clearinghouses, and a Conflict of Interest solution, which identifies and reports on potential conflicts, codes of conduct, and human resource policies and procedures. Tenet plans to develop a Capital Expenditure Request application, which will support management and approval processes associated with complex multi-year capital requests, and a Contract System of Management application, which will help manage requisitions through contract approval for all Tenet facilities.
“Our average time to build an application has improved substantially with the SmartBPM suite. That includes the time spent gathering information, which is a longer process here than perhaps at most companies. But actual application development time is far less than before. These are enterprise-wide applications. We roll out an application in a region, but it eventually goes live throughout the enterprise.”
Providing Tangible Benefits
Tenet is seeing tangible business benefits from its new GRC business process. Its South Carolina-based Hilton Head Regional Hospital leveraged Compliance Central to win 29 of 31 recovery audit contractor Medicare appeals. When audited, the hospital had all of its documentation already in place and quickly satisfied the auditor’s need for more details. In addition, the hospital used the CARDS application to significantly increase its coding accuracy rate. The system automatically alerts appropriate staff to make corrections and resolve errors before they can result in unpaid claims and increasing expenses.
“With SmartBPM, we can get an application request, create a model for the application, and deliver real functionality quickly, sometimes within 30 days,” states Coffee. “That includes going from information gathering through to development and testing. Our ability to deliver what’s needed has earned our IT team a lot of political capital. Our people trust us because they know we can come through. We’ll upgrade to the latest version of the Smart BPM suite as soon as we’re able.”
Thanks to Pegasystems, Tenet has increased its adaptability and flexibility, enabling its people to better communicate with each other. Tenet also enhanced process optimization, thanks to its ability to automate manual processes, absorb information from the processes, and communicate this information to key departments via email, triggering approval processes along the way. Tenet now has a solid foundation for achieving future process improvements. These improvements will provide the company with the added agility and adaptability it will need to meet future business challenges and stay one step ahead of the competition.
