3 Tuality OverviewTuality Healthcare is a community based not for profit healthcare organization based in Hillsboro, Oregon (18 miles west of Portland)We have two hospitals - Tuality Community Hospital (Hillsboro campus), Tuality Forest Grove Hospital (Forest Grove campus).Medical clinics (Physical Therapy, Physician Offices, Urgent Care) throughout western Washington County.Beds – 215 Licensed/ 125 Staffed, 42 Employed Physicians.Annual Net Revenues are about $190 million.DRO (Days Revenue Outstanding) – 51.2 net3
4 Revenue Cycle Overview There are many areas of opportunities in healthcare to improve and sustain a financially vibrant organizationdebt management, expense management, utilization control or revenue cycle functionalityGiven the number of people, software systems and companies involved in the revenue cycle for a hospital – Estimates are many organizations loose between 1% - 3% of the net revenue in the processWith operating margins in the state of Oregon averaging well less than 5%, doing it right the first time, can be anywhere from a 20%–80% improvement in operating margin.4
5 Revenue Cycle Opportunity Our focus on Tuality’s Revenue Cycle opportunity really started after we went through the process of converting from a paper medical record to an electronic medical record (EMR)July 2008 – Turned on the new EMR – Cerner. Net AR - $27,500,00012/08 DRO 70 - $32,800,0003/09 DRO 60 - $27,600,000Summer of 2009 Multicare Consulting Services did an assessment:They found our costs/structure (FTE) was pretty reasonable given claims volumeThe real opportunity was in collecting more on our accounts mostly using new outside vendors and new software products.5
6 Revenue Cycle Improvement Project Project Timeline - January 1st 2010 to December 31st 2010Project focused on six major areasSelf-Pay (Mostly Patient Responsibility after insurance) Collection StrategyVendor Expense ReductionGovernment Eligibility ScreeningThird Party Liability (TPL) Process ImprovementTransfer DRG OptimizationImproving our charge capture process6
7 Revenue Cycle Improvement Project Self-Pay Strategy Self-Pay Collection Strategy Goal:Increase Self-Pay cash (Patient Responsibility after Insurance Pays) and while maintaining a high level of patient satisfactionAction:Engaged an outside firm (TOG) to work accounts from day after insurance pays.We do the first pass on contacting the patient either by statement or phone (all accounts > than $500).Their “auto dialer/predictive software technology allow them to touch more accounts than we could at the hospital.The cost of this technology is generally prohibitive at Tuality’s size.Results:Self-Pay collection yield increased 15% - $1,475,0007
8 Revenue Cycle Improvement Project Vendor Expense Reduction Vendor Expense Reduction Goal:Reduce expenses associated with third party assistance for revenue cycle processesAction:Benchmarked our current claim scrubber/editor activity (placement amount / utilization rate) with current industry rates in order to obtain a better rate structure.Reduced use of statements as outsource vendor absorbed as part of their fee through the implementation of the enhanced Self-Pay process.Consultant facilitated all contract negotiations with each third party vendorResults:Total Annual Expense Reduction: $108,000Total Life of Contracts Expense Reduction: $432,0008
9 Revenue Cycle Improvement Project Government Eligibility Screening Government Eligibility Screening Goal:Identify missed Medicare and Medicaid coverage for un-insured account populationAction:Identified an additional software to assist with post-discharge (5 days) Medicare/Medicaid coverage.We actually have a different software vendor do a screening during the admitting process.Increased the number of areas for Provider Advantage in ancillary areas to ensure coverage is secured at the point of registrationResults:We now have a new feedback loop to the front end to enhance the current registration processIncreased Medicare and Medicaid cash by about $235,000 in YEAR 1Decreased Bad Debt expenseWe are currently finding about 30 accounts a month were coverage wasn’t obtained at admission.
10 Revenue Cycle Improvement Project Third Party Liability (TPL) Third Party Liability Goal:Enhance internal billing and follow up processes for qualifying TPL account population.Action:Developed a new report to find specific Occurrence Codes in ER accounts.Falls, Accidents, etc.Follow-up with the patient to insure all appropriate insurance is obtained as we start the billing process.Results:Increased Net to Gross for qualifying account population from 60.6% to 82.5%First year benefit about $300,000
11 Revenue Cycle Improvement Project Transfer DRG Transfer DRG Goal:Implement a comprehensive Transfer DRG process to ensure correct Medicare reimbursement.Action:When a patient is transfer to another level of care (Home Health, SNF etc) we indicate that on the claim to Medicare and receive only a partial DRG payment.Implemented software to automated Transfer DRG scrubbing (software vendor has access to the Medicare data file system) so if a patient did not actually receive the level of care (family member cared for them at home and they didn’t receive the home health services) we re-bill with the discharge code.Results:Increased Medicare cash by about $172,000
12 Revenue Cycle Improvement Project Charge Capture Charge Capture Goal:Implement a comprehensive charge capture solutionAction:Engaged an outside vendor with software for charge capture improvementDeveloped a comprehensive workflow for charge correction that fully utilizes the available technology.Results:Year 1 improvement net about $60,000Enhanced charging practices throughout the hospital based on a new feedback loop.Detailed reporting available to share at the department level.
13 Revenue Cycle Improvement Project Results Overall Project ResultsProject generated $2,350,000 in recurring net revenue benefitAbout 1.2% of net revenue.Most of these efforts will produce the same level of benefit year after year.Keys to SuccessSupport from Executive TeamStrong support from the IT departmentDay to day leadership from the Patient Accounting management teamEffective internal collaboration to achieve a common goal
14 Revenue Cycle Improvement Project Next opportunities for review in the revenue cycle for Tuality:Physician Documentation Assessment for coding opportunitiesPossible Clinical Documentation Specialists Staff RoleLEAN Process Improvement projects across all areas of charging/coding/billing.Improving our denial management systems