Latest / Becker’s Healthcare Podcast / Tracy Peffley, System Vice President of Revenue Cycle Management at Cleveland Clinic
Transcript
- 0:02- There's a small circle of people who truly
- 0:04- understand what it takes to lead a health
- 0:05- system right now. The decisions are enormous.
- 0:08- The variables are constantly shifting, and the stakes
- 0:11- of getting a call wrong don't stay contained.
- 0:14- That's not a complaint. It's a structural reality.
- 0:17- And it's why the most effective c suite
- 0:19- leaders are deliberate about where do they go
- 0:21- to pressure test their thinking.
- 0:22- Becker's fourteenth annual CEO and CFO roundtable
- 0:26- brings together more than 1,500
- 0:28- executive level attendees
- 0:30- and nearly 400 speakers for four days built
- 0:32- around growth, financial sustainability,
- 0:35- workforce strategy, and the leadership questions that don't
- 0:38- have easy answers.
- 0:39- Join us November second through the fifth in
- 0:41- Chicago.
- 0:42- For the agenda and event details,
- 0:45- visit beckershospitalreview.com
- 0:47- and click on the events tab in the
- 0:49- upper right.
- 0:52- This is Alan Condon back with another episode
- 0:54- of the Becker's Health Care Podcast. And today,
- 0:57- I'm thrilled to be joined by Tracy Peffley,
- 1:00- system vice president of revenue cycle management at
- 1:03- Cleveland Clinic. Tracy,
- 1:05- a real pleasure to have you make your
- 1:06- your debut Becker's podcast appearance with us today.
- 1:10- For those of our listeners who mightn't be
- 1:12- as familiar with some of the great work
- 1:13- that you, that your team does at Cleveland
- 1:15- Clinic, can you take a moment to share
- 1:17- a little bit about yourself and your role
- 1:19- at the health system?
- 1:21- Yeah. Thanks, Alan.
- 1:23- So I bring more than thirty years of
- 1:25- revenue cycle experience,
- 1:26- both in acute care and ambulatory,
- 1:29- with both from a facility and corporate level
- 1:31- perspective.
- 1:33- For most of my career, I've led clinical
- 1:34- revenue cycle, also known as mid the middle
- 1:37- rev cycle, as well as experience on the
- 1:39- back end as well.
- 1:41- I worked here at Cleveland Clinic for the
- 1:43- past twelve years, joined in 2013,
- 1:46- including the last two years serving as the
- 1:49- vice president of revenue cycle across the system.
- 1:52- Prior to the clinic,
- 1:54- I worked at Centura Health based in Denver,
- 1:56- Colorado,
- 1:57- which has since dissolved about two and a
- 1:59- half years ago.
- 2:00- While I was there, progressively advanced,
- 2:02- during my tenure there in my last role,
- 2:05- served as the senior director
- 2:07- of HIM across the enterprise.
- 2:10- You know, regarding my role today at Cleveland
- 2:12- Clinic, I'm blessed to lead the revenue cycle
- 2:16- team comprised of over 3,800
- 2:19- FTEs,
- 2:20- inclusive of
- 2:22- in seat or employed FTEs as well as
- 2:24- vendor FTEs. About 40% of our operations
- 2:27- is outsourced.
- 2:29- Additionally, I also support international,
- 2:33- locations, London and Abu Dhabi, in their rev
- 2:35- cycle operations.
- 2:37- So,
- 2:38- diverse,
- 2:39- very different reimbursement,
- 2:43- operations both in those global locations.
- 2:46- Now as I reflect on '25, the revenue
- 2:48- cycle team, the US team, we collected over
- 2:51- 15,000,000,000
- 2:52- in net patient revenue just to kinda put
- 2:54- size complexity
- 2:55- together,
- 2:56- coming in at 41.9,
- 2:59- net days receivable outstanding
- 3:01- and a cost to collect of 2.92%.
- 3:05- That's combined both hospital billing and professional billing.
- 3:08- And we've really tried to
- 3:10- focus on
- 3:12- sustainability,
- 3:13- revenue as well as cost savings, really
- 3:16- trying to strive for that top tier level
- 3:18- of performance, leveraging technology,
- 3:20- advancing our operating model,
- 3:23- and and today bringing us to present, you
- 3:25- know, really focusing in on top three strategic
- 3:28- initiatives,
- 3:30- building financial resilience,
- 3:32- you know, strengthening our our financial performance,
- 3:36- as well as the second one, enhancing our
- 3:38- patient financial experience. We're really working hard to
- 3:41- redesign the end to end patient financial journey,
- 3:45- through aligned workflows and integrated,
- 3:47- digital platforms.
- 3:49- And so
- 3:50- really trying to provide patients flexibility, meet them
- 3:53- where they're at.
- 3:54- We want them to pay, and we wanna
- 3:55- make it convenient for them. And we've recently
- 3:58- rolled out Apple Pay and Google Pay, so
- 3:59- we've seen some great success
- 4:02- along with other things that we're doing in
- 4:03- that space. And then third, really hyper focused
- 4:06- on advancing technology and AI, big buzzword in
- 4:09- the industry.
- 4:10- You know, we wanna be leaders in this
- 4:12- and,
- 4:14- really wanna optimize Epic as well as how
- 4:16- do we leverage other technology
- 4:18- platforms,
- 4:20- with AI, Gen AI,
- 4:22- to streamline our operations. It is the future,
- 4:25- and we've gotta take out cost,
- 4:27- current revenue cycle operations,
- 4:29- our model, our cost structure, it's not sustainable.
- 4:32- And so how do we leverage technology in
- 4:34- the future
- 4:35- to, look differently, operate differently?
- 4:39- And part of our strategy in doing so,
- 4:41- we recently created a dedicated
- 4:44- technology and innovation domain
- 4:47- within our operating model,
- 4:49- that's really going to be hyper focused on
- 4:51- driving those advancements
- 4:53- now and in the foreseeable future. And so
- 4:55- that is an investment we've made here at
- 4:57- the organization
- 4:59- in partnership working lockstep with our information technology
- 5:02- department as well.
- 5:04- Mhmm. Yeah. Fantastic. I mean,
- 5:07- love to kinda break down. And there's there's
- 5:08- obviously so many key areas. You touched on
- 5:11- quite a lot of the trends there, the
- 5:12- kinda core focuses in terms of areas you're
- 5:14- focused on the revenue cycle.
- 5:16- 3,800
- 5:17- FTEs and your revenue cycle team alone, 40%
- 5:20- of operations, I believe you said, outsourced.
- 5:22- Yeah.
- 5:23- Would love to hear,
- 5:25- you touched on kind of some of the
- 5:26- trends that you're kinda focused on really there
- 5:28- in terms of,
- 5:29- AI, kind of automation, kind of some of
- 5:32- your your initiatives in the patient experience and
- 5:34- whatnot.
- 5:35- There's so much you can go down. But
- 5:36- in terms of, like, your one or two
- 5:38- core focuses through the end of twenty twenty
- 5:40- six, when you look at two or three
- 5:41- trends they're really focusing on to to make
- 5:44- a difference in your revenue cycle,
- 5:46- what might that be?
- 5:49- I would say one of the biggest opportunities
- 5:51- we're focusing in on is reducing denials.
- 5:54- Mhmm.
- 5:55- Rising denial rates,
- 5:57- just creates unnecessary cost, administrative burden,
- 6:00- creates friction for providers,
- 6:03- payers, our clinicians,
- 6:06- and most importantly, our patients. They're right in
- 6:08- the middle.
- 6:09- And so, you know, as we look at
- 6:12- the impact denials have, it delay can delay
- 6:15- patient care,
- 6:16- creates confusion and financial complexity for our patients,
- 6:20- contributes to burnout
- 6:23- for our revenue cycle team who are constantly
- 6:25- chasing a problem, trying to fix a problem
- 6:28- while reacting to ongoing, payer requirements.
- 6:32- So we gotta be agile. And so really
- 6:35- trying to lean in here and leverage data
- 6:37- analytics to, one, prevent the denials. How can
- 6:41- we predict the denials?
- 6:43- And so
- 6:44- as an industry, I think we have an
- 6:46- opportunity really to move away from a reactive
- 6:49- model, which is what exists today,
- 6:51- to more collaborative one, bringing the provider and
- 6:54- payer community together
- 6:56- to simplify the processes,
- 6:58- improve the alignment, reduce the friction,
- 7:01- reduce the cost, the waste that's all associated
- 7:04- with the denials,
- 7:05- and work towards a closer near real time,
- 7:08- claim adjudication.
- 7:10- Mhmm. Yeah. It's so interesting. I had the
- 7:12- pleasure speaking with, your CFO, Dennis Tharaway, on
- 7:15- a podcast recently and also around your meeting.
- 7:17- Unsurprisingly,
- 7:18- denials is something that he brought up as
- 7:20- well. And I think something that really stuck
- 7:22- out to me, maybe you can elaborate on
- 7:24- this, is he he said that with Cleveland
- 7:25- Clinic, I believe still facing denial rates of
- 7:28- around about fifteen percent or more, and that
- 7:31- starts this cascade of rework in terms of
- 7:34- resubmissions,
- 7:35- medical director reviews, appeals, and so on and
- 7:37- so forth. This process full of friction often
- 7:40- drags on the provider, the physician,
- 7:42- even sometimes the patient, consumes so much time,
- 7:45- energy, and resources. And then from that fifteen
- 7:47- percent, eventually gets down to a sub two
- 7:50- percent denial rate, I believe.
- 7:52- But all that cost and energy and time
- 7:54- consumed to get down to that two percent,
- 7:57- excuse me, seems simply unsustainable.
- 7:59- I'd be curious to just kinda hear your
- 8:01- thoughts and kind of
- 8:03- the the the energy that it takes to
- 8:04- get down to that and what that ultimately
- 8:06- says about the system.
- 8:08- Yeah. So when you when you say the
- 8:10- 15%, just for clarity, that is incoming denials.
- 8:13- So that's inclusive of initial denials
- 8:16- and subsequent denials.
- 8:18- Mhmm. And so,
- 8:20- we have in 2025,
- 8:22- we successfully overturned 92%
- 8:24- of our denials.
- 8:26- So think about the waste
- 8:28- in advocating for the patient,
- 8:32- as well as our clinicians, the medical necessity,
- 8:35- the care that was provided.
- 8:37- And so there's resources built by us as
- 8:40- a provider as well as the payer. And
- 8:43- you got the patient right in the middle
- 8:44- as as I mentioned. And they're seeing the
- 8:46- back and forth that's going on, and and
- 8:48- that's just constant.
- 8:49- You know? And and when we look at
- 8:51- the final denial rate,
- 8:54- it's definitely less than two percent.
- 8:57- As I mentioned,
- 8:58- the the ninety two percent overall success rate,
- 9:01- but it just stems from,
- 9:03- really, are there things that we can do
- 9:05- better? Absolutely. Some of that self inflicted.
- 9:07- We're not perfect. And learning from those mistakes
- 9:10- to really hone in on
- 9:13- standard work,
- 9:14- leveraging technology, make sure we're optimizing it,
- 9:18- ensuring,
- 9:19- our we're giving feedback back to the clinicians.
- 9:22- You know, we're blessed. We have two,
- 9:24- medical directors embedded, integrated into revenue cycle here
- 9:27- at Cleveland Clinic,
- 9:29- here most recently over the last, couple years
- 9:31- as part of our new operating model. We
- 9:33- have a medical director of documentation excellence
- 9:37- as well as the, physician advisory program. And
- 9:40- so they have been pivotal in
- 9:42- really closing the gap, bringing together the financial
- 9:46- and the clinical operations together
- 9:48- to help drive
- 9:50- and,
- 9:52- the better understanding
- 9:54- as well as how do we leverage the
- 9:56- data to do better as well as be
- 9:58- proactive sitting down with the payers and, this
- 10:01- is what we're seeing. What are you seeing?
- 10:03- And working together to try to improve it.
- 10:06- This is like a mountain,
- 10:08- and we are not unique in that situation.
- 10:10- It is gonna take really the,
- 10:13- entire community coming together to really change this
- 10:17- paradigm.
- 10:18- It's not right to the patient,
- 10:20- and
- 10:21- it's not sustainable
- 10:22- for the payer or the provider. And so
- 10:24- how do we work smarter, not harder to
- 10:27- streamline this and drive greater efficiencies?
- 10:30- Yeah. No. I really appreciate the kinda level
- 10:32- of specificity in terms of what exactly you're
- 10:34- doing, the kind of setup there, and kind
- 10:36- of some of your core areas of focus.
- 10:39- Tracy, you'd mentioned in,
- 10:41- your opening remarks kind of AI being a
- 10:43- core unsurprisingly, I imagine it's not a day
- 10:45- goes by where I'm sure you don't hear
- 10:46- about AI and automation, the revenue cycle, but,
- 10:50- no doubt there's some big opportunities there on
- 10:52- the provider side to kinda play catch up
- 10:54- in terms of,
- 10:55- what the payers have been leveraged for quite
- 10:57- some time. I'm so curious in terms of
- 10:59- how you see this, for lack of a
- 11:01- better term, quote, unquote, AI arms race
- 11:04- evolving in the coming years as we see
- 11:07- AI become more sophisticated,
- 11:09- really more deeply integrated in the revenue cycle
- 11:12- of both the payers and the providers. I've
- 11:15- heard some some optimists, some pessimists, some realists
- 11:17- on this side of the equation, but I'm
- 11:19- curious to kinda hear your thoughts. Granted, no
- 11:22- no silver bullet here, but, how are you
- 11:24- kinda how are you thinking about this for
- 11:26- the future? Yeah. Great question.
- 11:29- You know, I I think the AI arms
- 11:31- race in health care is moving beyond
- 11:35- who has the best model, but to who
- 11:38- has an embedded
- 11:40- AI most effectively into real and integrated clinical
- 11:43- and revenue cycle workflows.
- 11:45- As AI matures, the biggest opportunity is the
- 11:48- intersection of clinical integration and financial performance.
- 11:52- For example,
- 11:53- ambient listening and AI assisted documentation coding solutions,
- 11:57- bringing those together, you've right now, you have
- 12:00- AI, point solutions out there available that are
- 12:03- functioning independently.
- 12:05- I envision that they will likely,
- 12:08- of all, come together and integrate,
- 12:11- which will help make make
- 12:14- excellence more visible through documentation,
- 12:17- more accurate coding,
- 12:19- stronger quality capture,
- 12:21- as well as better risk adjustment.
- 12:24- And at the same time, AI will also
- 12:27- help us
- 12:28- prioritize and automate prior authorization,
- 12:31- help reduce the friction.
- 12:33- And going back to our earlier conversation,
- 12:36- also help with predicting and preventing denials.
- 12:39- So it identifies the gap earlier in the
- 12:41- process, move it further upstream
- 12:44- so we can fix it before it goes
- 12:45- out the door.
- 12:46- I know who oh, go ahead. Alright, Tracy.
- 12:49- Is there, specifically in terms of what you've
- 12:51- mentioned there in terms of more proactively predicting
- 12:53- some of these denials upstream, is there a
- 12:55- specific example or a specific specialty or subset
- 12:58- where you're really implementing this now and seeing
- 13:01- results? Just out of curiosity.
- 13:02- Yes. I will say right now, we are
- 13:04- really hyper focused and have seen some set
- 13:06- success on the inpatient coding side.
- 13:09- And so,
- 13:11- we have, a partner here and,
- 13:13- we've been leaning in here really looking at,
- 13:18- how to ensure that we're accurately coding
- 13:22- and properly being reimbursed.
- 13:24- And how do we streamline that to ensure
- 13:27- that we're capturing everything that we need to
- 13:30- so we've got that accurate quality capture
- 13:33- as well as fostering that accurate reimbursement.
- 13:36- So we've not reduced headcount. That's not our
- 13:40- intent
- 13:42- really it's augmenting the inpatient
- 13:45- coder and the work that they're doing
- 13:47- and leveraging a large language model to bring
- 13:50- forth those potential opportunities.
- 13:52- There's a human in the loop 100% of
- 13:55- the time right now validating those opportunities
- 13:57- being presented,
- 13:59- and then it goes out the door. And
- 14:01- so we've really seen some great success,
- 14:03- of that in our outcomes data, our our
- 14:05- quality outcomes,
- 14:07- as well as our caregivers really leaning in
- 14:10- and being part of the solution. You know,
- 14:11- when you're,
- 14:13- moving someone's cheese and we solve this, with
- 14:16- computer assisted coding with coders, fearful, hey, I'm
- 14:19- gonna lose my job.
- 14:21- We saw it with RPA. We've got 200
- 14:23- digital RPA bots within revenue cycle. I'm gonna
- 14:27- lose my job. People aren't losing their jobs
- 14:29- relative to this. I'm not envisioning that in
- 14:31- the media with AI. Within patient coding, it
- 14:33- really is
- 14:34- augmenting the great work that they're doing, leveraging
- 14:37- them top of license, that critical thinking skills
- 14:40- that are so necessary.
- 14:42- Mhmm. Yeah. We often hear about kind of
- 14:44- leveraging positions, clinicians at the top of their
- 14:46- license. What does leveraging revenue cycle leaders in
- 14:49- the workforce at the top of their license?
- 14:51- What does it kinda free them up more
- 14:52- so they do?
- 14:54- Yeah. Great question. You know, I I would
- 14:56- say really having them focus on the more
- 14:59- complex,
- 15:01- work that's involved,
- 15:03- higher dollar cases. You know, here at Cleveland
- 15:05- Clinic, we have one of the highest case
- 15:08- mix
- 15:09- in the country.
- 15:10- And so, you know, when we look at
- 15:12- our incoming denials going back to that, you
- 15:14- know, really peeling the onion away,
- 15:18- why are we receiving these secondary and tertiary
- 15:21- denials? How do we look at this a
- 15:23- more integrated clinical revenue cycle approach
- 15:26- and leaning in here with our clinical providers
- 15:29- so we can be better thought partners
- 15:32- in preventing those denials
- 15:34- and a better experience for clinicians as they're
- 15:37- taking care of the patient, and they're staying
- 15:39- focused on that and not having to worry
- 15:41- about the prior authorizations
- 15:43- or helping with peer to peer reviews.
- 15:45- It's really
- 15:47- leveraging one another's expertise
- 15:50- from a financial perspective, us, the clinicians, the
- 15:53- clinical side of the house, and bringing that
- 15:55- together,
- 15:56- in that delivery model to the patient.
- 15:59- Yeah. It is fascinating to kinda hear where
- 16:01- where we've gone in the last couple of
- 16:02- years with AI and just how fast it's
- 16:04- been quickly implemented and integrated across, not just
- 16:07- health care, but across the board.
- 16:09- Last question. It kinda ties nicely onto what
- 16:11- we just talked about there, Tracy, in terms
- 16:13- of expecting these revenue cycle teams evolving with
- 16:16- AI as it becomes more deeply embedded in
- 16:18- their workflows. You touched on it just a
- 16:19- little bit there, but what skills do you
- 16:21- see will really define that next generation of
- 16:24- revenue cycle leaders like yourself? I'm so curious
- 16:27- to hear maybe how your actual role as
- 16:29- system vice president of revenue cycle has actually
- 16:30- evolved perhaps relatively quickly over the last couple
- 16:33- years with the advent of this technology as
- 16:35- well.
- 16:36- Yeah. I would say this the key skills
- 16:39- really are gonna be centered around data literacy.
- 16:42- Digital fluency, having that foundational knowledge of what
- 16:45- AI is and can and empowering our caregivers
- 16:49- to be able to build and understand how
- 16:52- to leverage the automation
- 16:54- and apply those critical thinking skills in a
- 16:56- more cross functional collaboration.
- 16:59- You know, while
- 17:00- AI may improve efficiency and provide valuable insights,
- 17:03- we have to keep in mind it doesn't
- 17:05- take the human out of the process,
- 17:08- and especially where empathy and understanding and human
- 17:11- judgment are essential
- 17:13- in health care. At the end of the
- 17:15- day, a patient is behind every claim. We
- 17:17- need to make sure that we're taking care
- 17:19- of that patient. We don't lose sight of
- 17:20- that.
- 17:21- Yeah. Fantastic.
- 17:23- Tracy,
- 17:23- last last question before I let you go.
- 17:26- I've been fascinated to kinda pick your brains
- 17:27- a little bit in here. Just just how
- 17:28- much fascinating work is going on. Within your
- 17:31- team across the board at Cleveland Clinic,
- 17:34- what are you most about when you kinda
- 17:36- think about the future, whether it's out outside
- 17:38- of AI or beyond? When it comes to
- 17:40- the revenue cycle and the things that you're
- 17:41- focusing on at Cleveland Clinic, is there one
- 17:43- or two things you'd really like to highlight
- 17:45- before we wrap up?
- 17:47- The first thing I would like to say
- 17:49- is the value revenue cycle brings to the
- 17:51- organization.
- 17:52- I am really excited to see
- 17:55- that our executives are really seeing the value
- 17:57- we bring to the organization
- 18:00- and the impact
- 18:01- positively
- 18:02- that we have
- 18:04- and garnering the support all the way up
- 18:06- to our CEO, Doctor Tom Mihalovich.
- 18:08- What do you need, Tracy?
- 18:10- And really understanding,
- 18:12- the return on investment and the strategic initiatives
- 18:15- we have underway and getting his support.
- 18:18- You know, real and and then the second
- 18:19- thing is really
- 18:21- redesigning that patient financial experience.
- 18:24- You know, we want patients to pay. We
- 18:26- want to make it easy for them to
- 18:27- pay.
- 18:28- Our healthcare industry is so complicated.
- 18:31- We have a lot of patients that don't
- 18:32- understand their benefits.
- 18:33- You have a greater shift of,
- 18:36- employer shifting more expenses to the our patients.
- 18:40- You have higher,
- 18:42- rise in high deductible plans. And
- 18:45- so we've gotta figure out how to make
- 18:47- it a better experience, more seamless,
- 18:49- simplified,
- 18:53- and the ability to pay making it easy
- 18:55- and customize it. You know? Those self serve
- 18:57- models are making it easy.
- 19:00- They have choices, and we wanna make sure
- 19:02- that they clearly understand that transparency is really
- 19:05- important. So we're really leaning in here and
- 19:07- redesigning to have a much more effective
- 19:10- and positive financial experience for the patients so
- 19:12- they understand we're transparent
- 19:14- and giving them tools to self serve and,
- 19:17- pay in a way that meets them where
- 19:19- their needs are.
- 19:21- Fantastic.
- 19:22- Tracy, I think, such a pleasure to have
- 19:23- you make, your debut appearance on the Becker's
- 19:25- podcast with us today. So greatly appreciate your
- 19:27- time. So greatly respect a lot of great
- 19:29- work that you and your teams are doing,
- 19:30- and really look forward to catching up with
- 19:32- you again down the line. Thank you. Thanks,
- 19:34- Alan.