Michael O'Rourke, SVP/CIO, Catholic Health Initiatives, Talks ICD-10

Michael O’Rourke, SVP/CIO, Catholic Health Initiatives

Think you’ve got a heavy workload as CIO of your one- or two-hospital health system? Try 76 on for size. Of course, it’s not an apples-to-apples comparison, as Michael O’Rourke does have a bevy of regional CIOs and other support staff reporting up to him, but that doesn’t mean his post is without its challenges. To learn more about what it takes to make one of the nation’s largest health systems run, healthsystemCIO.com recently caught up with the Colorado-based CIO.

Chapter 1

About CHI (76 hospitals in 19 states)
Weighing in on federal legislation
Thoughts on the ICD-10 postponement
Lessons of 5010
Dangers of disrupting the revenue cycle

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BOLD STATEMENTS

I think the federal government and the folks at CMS realize that we need some breathing room here.

… we were at certain points, $100-$120 million behind revenue because they couldn’t get the claims processed.

… when the revenue gets interrupted, panic strikes very quickly throughout the organization.

Guerra: Good morning, Michael. I’m looking forward to talking with you about your work at Catholic Health Initiatives.

O’Rourke: Great. Good morning, Anthony. It’s a pleasure.

Guerra: Thank you. All right. Big organization, as we all know – 76 hospitals, more than 2,000 employed physicians. Any other facts or things about Catholic Health you want people to know to set the stage for our discussion?

O’Rourke: If we’re just talking about scale, we are a very large organization. As you said, 76 hospitals. We also have about 350 clinics, 2,000 employed physicians, somewhere around 6,000 affiliated physicians, long-term care facilities, home health, so we have a pretty extensive integrated delivery network, and we’re in 19 states throughout the country. As scale goes and as complexity goes, I think we have both parts of the spectrum covered.

Guerra: I don’t know if you’ve ever thought about this, but do you know of a comparable organization in another industry, just to give a better idea of CHI’s size?

O’Rourke: When you go into other industries, there are organizations that really do dwarf our scale. There are IBM Global and others. We are pretty much based in the United States. In healthcare organizations, you have HCA as a for-profit organization that’s fairly large-scale… Kaiser.

I think when you look at 19 states and you look at the geographic distribution and the variability in the communities – the rural, the urban, it sort of makes for, one, a challenge, but it also makes it a very comprehensive community-based health organization.

Guerra: Do you find that government officials seek out your counsel when they’re considering doing things, just because of your scale?

O’Rourke: Yes. We have a pretty extensive advocacy program working with local, state, as well as federal officials. When there are public periods of notice, we usually get contacted, especially by CMS to give our opinion on things.

For example, recently you may have seen the announcement that ICD-10 was moved back another year. We had a lot of conversations with various individuals at CMS and other places in regards to what we thought was a necessity to move it back to give organizations some time to get through all of the healthcare reform before we launch another government program. So that’s an example.

I think that, in most industries, state and federal regulators will reach out to see what the opinions are of organizations that have a pretty large mass.

Guerra: I know you’d spoken out about ICD-10. Are you pleased with where it stands now, or were you hoping for another year?

O’Rourke: Well I will take anything I can get as far as a delay, so I was very pleased with the year. (laughing) To be honest with you, I think most organizations in the country are not ready for this – for ICD-10 to happen in October of 2013. People are preparing for it but, as you know, so many organizations – both acute care and ambulatory – are in the midst of rolling out and deploying their ambulatory or acute care electronic health records. We just finished putting in the most recent versions of the releases for our claims processing. So I think it’s being realized that you can only put so much on top of these organizations. ICD-10 is very, very big. It’s very complex. It’s going to change the way that we do our coding, it’s going to change the way physicians and providers interact with other care providers, in terms of the coding of information. And we all know if you make mistakes and you don’t do it right, it’s grounds for criminal action. So I think the federal government and the folks at CMS realize that we need some breathing room here. I mean, if they go out to October of 2015, I’ll be just as happy.

Guerra: Right. Do you think there could be another groundswell as we approach the 2014 deadline of a postponement?

O’Rourke: You know, I don’t think that will happen. I think you get a pass one time, and I think that’s fair and I’ll accept that. But after that, it’s sort of just delaying the inevitable.

Guerra: Yes.

O’Rourke: Giving organization until 2014 allows them to get much of their electronic health records in place and gives them a little breathing room to be able to take on ICD-10. At that point, the timing is really good because if you put ICD-10 in before you put your new electronic health records in, you virtually have to go back and reconstruct it when you do your electronic health records. So I think many organizations will have their EHRs in, and then ICD-10 can be done once, and hopefully not for another 10 years.

Guerra: You’ve said that the 5010 experience didn’t give you much confidence in terms of this whole thing.

O’Rourke: No, it did not. And 5010 is just miniscule compared to what ICD-10 is going to be. We took the position of moving forward with it. It was planned to go on January 1, and it was given a little bit of a hiatus to March 1, but we were very much cued up with many of our vendors and third-party intermediaries. We decided we were just going to move forward. So almost by default, we became, to some degree, early adopters on this. Third-party intermediates really weren’t ready, payers weren’t ready, so there were lots of challenges. I mean, we were at certain points, $100-$120 million behind revenue because they couldn’t get the claims processed.

Guerra: Right.

O’Rourke: It was not a good experience. We work with RelayHealth and we sort of held hands through it. Instead of eating each other’s lunch, we just said, ‘Let’s do everything we can to get all of the payers and everyone else to get the e-filters and things fixed,’ and we made it through and we caught up on the revenue. But when the revenue gets interrupted, panic strikes very quickly throughout the organization. It was not a great experience. Coming off that, going into electronic health records – it’s just a pleasure to know we have a little breathing room.

Guerra: You don’t want to mess with the old cash flow, right? Because the bills keep coming in and you have to keep paying your vendors.

O’Rourke: Oh, that’s right. You have to keep paying. And of course every CFO – we have quite a few of them in 19 states, their hair is on fire immediately. Not only that, but then as you get to a certain point, if it gets too deep into that, you’ve got to move into your cash reserves. Auditors don’t like that.

It was a little tricky for a while there, but there were some lessons learned. That’s why we were very supportive of the fact of moving back ICD-10.

Guerra: What we’re talking about here makes me think of how when I speak to a lot of CIOs and we talk about changes in the clinical application environment, I find that a lot of them are leaving their revenue cycle systems alone, even if they’ve upgraded the clinical systems. We usually come around to laughing about how they just don’t want to mess with the revenue cycle if they don’t have to because it makes the Meaningful Use incentive money look like peanuts, in terms of what you can lose if you screw up your revenue cycle. It sounds like that resonates with you.

O’Rourke: Absolutely. I tell people if you walk past finance and you sneeze hard, the AR days go down. (laughing) It’s so sensitive to any changes. You get a construct in place and you have your cash flow working and folks in accounting and such know how this works. They close it out and they close out their month. You make the slightest change, even for the better, and you start to see negative effects, you see that sort of trough effect on it and especially where you’re doing any kind of major implementation or upgrade, that could change the revenue cycle.

I was talking to a vendor yesterday, and he said to me, “You’ve been with us for a long time but you don’t use our revenue cycle system. We don’t understand why you don’t do that. We can make you a great deal. It only makes sense to do that, it’s all integrated.” I said, “There’s no way I will shut down my revenue cycle for 19 states and 77 hospitals to flip it over to a revenue cycle system that does basically the same thing, just because I might have better integration.”

Guerra: Right.

O’Rourke: But you’re absolutely right, we are doing a little bit of work on our revenue cycle because we have business offices, and we are continuing to consolidate the business offices around an episode or an instance of our revenue cycle in a geographic area. We call it Next Gen – not to be confused with the ambulatory product – but we’re trying to create a new generation in the way we process revenue, without doing anything dramatic or crazy on the revenue cycle.

Guerra: It’s almost like there has to be no choice but to change, right?

O’Rourke: That’s right. (laughing) I mean, if you go up and you try to sell a revenue cycle change solution to whatever particular executive team you have to sell it to to get your funding, you can just see in their faces they cringe, the sphincter muscles tighten… it’s pretty bad (laughing). It’s really hard to sell that one.

Chapter 2

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