Your Training Budget Approved—Really?

When evaluating budget items, chief financial officers (CFOs) are primarily concerned about three things—revenues, expenses, and return on investment (ROI). When presenting a training budget for approval, it makes sense to link your request to the following six factors:

- Cost of Travel. $4 gasoline? $5 gasoline? $6 gasoline? All around us we see prices increasing and the increased cost of travel. Airlines are cutting and canceling numerous flights while charging more for available tickets and additional fees for checked baggage. The cost and hassle of air travel is increasing, rapidly making traveling for education more expensive and less likely to be approved. As travel and conference budgets are cut due to cost, staff will be looking to their organizations to provide the education they once received on the outside. More education will need to be brought in-house. With limited staff and no slowdown in the pace of mandated initiatives that every healthcare facility must comply with, it is imperative that facilities find methods to educate staff efficiently and effectively. Many organizations are looking to e-learning as one method to address these issues. Healthcare is following the lead of the Fortune 500 in adopting learning management systems (LMSs) to better manage their human resources and staff development. These systems present one solution to bring more training in-house while providing access to outside learning and content experts in a cost effective manner.

- RAC Audits. Recovery audit contractors (RAC) is a Medicare auditing program that utilizes private firms to examine physician, hospital, nursing home, and other claims to find instances in which the government has overpaid providers. The RAC program's mission is to reduce improper Medicare payments through the efficient detection and collection of overpayments, the identification of underpayments, and the implementation of actions that will prevent future improper payments. The RAC audit program was launched as a pilot in California, Florida, and New York, states where Medicare utilization rates are among the highest per capita. In 2006, the RAC program was expanded to extend it from the three pilot states to a nationwide program. It will be expanded to all 50 states no later than 2010. RAC fees are mainly based on a percentage of the overpayments that are collected.

There is an expectation that the RACs will be extremely aggressive in their pursuit of overpayments. RACs corrected more than $1.03 billion in improper Medicare payments, according to a Centers for Medicare & Medicaid Services (CMS) evaluation of the RAC pilot program. Approximately 96 percent ($992.7 million) of the improper payments were overpayments collected from providers.

Improper payments on claims can occur for the following reasons:

- Payments are made for services that do not meet Medicare's "medical necessity" criteria.

- Payments are made for services that are incorrectly coded.

- Providers fail to submit documentation when requested, or fail to submit enough documentation to support the claim.

- Improper Medicare Secondary Payer (MSP) payments can occur when Medicare pays a claim that should have been paid by a different health insurance company.

- Other reasons for improper payments include basing claim payments on outdated fee schedules, or when the provider is paid twice because duplicate claims were submitted.

Educating physicians and staff in documentation, medical necessity, billing, coding, and other reimbursement issues will show a very real ROI as a measure of prevention against these aggressive RAC audits.

- Never Events. Never events, also called "serious reportable events," are adverse occurrences that should never happen in a hospital and can be prevented. They include surgical events, such as performing the wrong surgical procedure or surgery on the wrong site; product or device events, such as contaminated drugs or devices; and hospital acquired conditions.

In 2007, Medicare announced it would not pay for certain medical errors and conditions acquired in hospitals. There are eight conditions for which hospitals will not get paid from Medicare as of October 1, 2008 unless the conditions are documented as present on admission:

- Stage III and IV pressure ulcers
- Falls or trauma resulting in fractures, burns, or other serious injuries.
- Foreign object accidentally left behind after surgery
- Air embolism
- Blood incompatibility
- Vascular catheter-associated infections
- Catheter-associated urinary tract infections
- Mediastinitis after coronary artery bypass graft, a surgical site infection

In April 2008, the agency proposed adding nine more conditions to the list. Now, private and other public payers are taking their cues from Medicare and enforcing no-payment rules for a variety of "preventable" conditions. Facilities need to be diligent in their education of staff regarding these conditions to ensure proper patient care and to prevent a financial strain on a facility. As the list of "no-pay" events increase, a healthcare LMS can be used to verify competencies and certifications, to quickly disseminate information, and to keep staff apprised of life saving procedural changes.

- Hospital Quality Initiative.The goal of the CMS Hospital Quality Initiative (HQI) is to improve the care provided by the nation’s hospitals and to provide quality information to consumers and others through public reporting. To improve quality, CMS is using direct financial incentives to reward the delivery of superior patient care. Quality measures are a key component of the HQI and are used to gauge how well an entity provides care to its patients. A quality measure converts medical information from patient records into a rate or percentage that allows facilities to assess their performance and to be COMPARED to other facilities. Thousands of healthcare facilities currently report a variety of quality measures. The Premier Hospital Quality Incentive Demonstration is a CMS program that uses these quality measures to recognize and provide financial rewards to hospitals that demonstrate high quality performance in a number of areas of acute care. Currently there are about 250 hospitals participating.

CMS identifies hospitals in the demonstration with the highest clinical quality performance for each of five clinical areas. Hospitals in the top 20 percent of quality for those clinical areas are given a financial payment as a reward for the quality of their care. There are additional financial incentives for high performing facilities. Facilities with sub-par performance see payment reductions. CMS has awarded more than $24.5 million during the first three years of the project. CMS is working on proposals to expand the pay-for-performance concept to all hospitals, and to other types of providers.

Improving quality requires more than just focusing on the specific quality measures listed by CMS. It requires a cultural shift in the organization. This can be facilitated by full staff-wide implementation of training where each individual understands their role and responsibility and is empowered to speak up about concerns and make suggestions for improvements. Quality improvement (QI) training shows staff members how to uncover the root cause of quality gaps. In addition, QI requires policies and procedures be put in place by administrators and effectively communicated to staff. As pay-for-performance takes hold, QI training will increasingly separate the quality (and financial) winners from the lower performing facilities.

- HCAHPS. In a hospital, even one bad encounter can leave a patient or family member with a negative impression of their entire experience—including the medical care they received. The care, and the perception of care, that customers receive have very real consequences for the financial success of the institution and quality of life for employees.

Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) is the first national, standardized, publicly reported survey of patients' perspectives of hospital care. The HCAHPS survey asks patients 27 questions about their hospital experience, including items about communication with nurses and doctors, responsiveness of hospital staff, cleanliness and quietness of hospital environment, pain management, communication about medicines, discharge information, overall rating of hospital, and recommendation of hospital.

The HCAHPS data is already appearing on public reporting sites such as Hospital Compare (www.hospitalcompare.hhs.gov), and it's likely that more will appear soon. Transparency of operations is becoming widespread and will begin to affect the bottom line as more patients become aware of the available data. Patient satisfaction scores will become a determining factor in where to seek care.

Since July 2007, there has been an additional incentive for acute care hospitals to participate in HCAHPS. As part of CMS' Reporting Hospital Quality Data Annual Payment Update (RHQDAPU) program, hospitals subject to Inpatient Prospective Payment System (IPPS) provisions are asked to collect and submit HCAHPS data. IPPS hospitals that fail to report data from the HCAHPS survey, may receive an annual payment update that is reduced by 2.0 percentage points.

New, engaging, interactive healthcare "customer service" and patient satisfaction online training courses help every staff member to understand the impact of their actions on patient care and the perception of care for patients and family members. Research has shown these courses can lead to a significant improvement in patient satisfaction scores. Now more than ever, quality patient interactions make both medical and fiscal sense.

- Staff Retention. The nursing shortage has worsened at many hospitals despite focused recruitment efforts and continued increases in compensation. Nursing shortages (rightly) get all the attention, but there are shortages developing in a number of important healthcare staffing positions. A recent CFO roundtable demonstrated that most of the executives are not yet addressing the issues that will result from staff shortages. They see the trends but don’t have many good strategies for dealing with staffing issues.

Study after study shows that staff retention increases in organizations that provide training and professional development opportunities for staff. Most people work for more than just money. Assuming an organization is paying a competitive wage, staff members will look for a good work environment and advancement opportunities. Both of these issues can be impacted by training.

We've already discussed QI and the impact it will have both on patients and the financial bottom line of your facility. In addition, training and involving your staff in QI will have a substantial positive impact on the work environment that will lead to higher staff retention. Staff members want to work at a quality organization where their suggestions for improvement are solicited, good ideas are implemented, and individual contributions are recognized. QI training can guide staff in how to select areas for improvement and how to make changes that will have the greatest impact on organizational efficiency.

Healthcare facilities will need to do more with less and this can only be achieved through better, smarter, more productive workers. LMSs and high quality training can be used to develop staff, enhance careers, and help place existing staff in positions that require additional skills and competencies. This leads to greater job satisfaction and higher pay, but also less turnover and the ability to develop—internally—the staff needed to fill positions.

Tying training initiatives to financial outcomes is the surest way to get a training budget approved. The six reasons presented in this article should put training, operational, and finance departments in alignment.


David Rosenthal is vice president, marketing and strategy for HCCS Inc., specialists in healthcare learning. For more information, visit www.hccs.com.