1. Robin Bradbury 800.355.0410 robin@ereso.com

2. Keystone and Philadelphia Regional AAHAM Chapter Meeting “ Top Ten Questions ” September 21, 2010

3. When performance is measured, performance improves. Revenue Cycle 101

4. Objective measures are always better than subjective measures. Revenue Cycle 102

5. The Process..… Payer Contracts Claim CashSelf-PayAdjustments Patient Data Other PayersCashBad Debt Charges Registration Billing Payment Collection

6. Time and Energy

8. What are the “key” measures for the Revenue Cycle? Question # 1

9. Days in Revenue Outstanding Cash Collections Cash as a % of Net Revenue Write-offs as a % of Revenue Aged AR Greater than 90 Days Days in Discharge to Final Bill Up-front Cash Collections Key Measures

10. Benchmark Data HARA report Geographic region Your facility

11. Free Benchmark Study http://www.ereso.com Sample Information: Facility Bed Size:122 Average Daily Census:38 Total Accounts Receivable:$8,000,000 Cash Receipts per Month$900,000 Gross Revenue per Month:$2,000,000 A/R Over 90 Days:$3,500,000 Monthly Cost of BO:$45,000 Write Offs per Month:$150,000 Number of Open Accounts:19,000 Number of FTE's in BO:12 Percent A/R in Self Pay:40%

13. Value Proposition Actual Example HospitalPeer GroupDifference Cash Opportunity AR Days Reduction824339$1,476,815 Days over 90 Reduction31.7%24.4% 7.3% $217,374 DNFB Reduction 24.2 7.2 17.04 $652,439 Cost to Collect Reduction $ 0.027 $ 0.025 $ 0.002 $33,356 Bad Debt Write off Reduction8.9%2.3% 6.6% $855,290 Charity Write off Reduction1.9%6.9% -5.0% NA

14. How do you document and share this information with the Revenue Cycle staff? Question #2

15. Monthly Dashboard Posted key measures in Revenue Cycle areas Monthly team meetings Teach the staff what “Days” are Key Measures

16. What is our cost to collect a dollar? Question #3

17. Good comparative measure (common definition) Important consideration when evaluating investment in resources – more cash intake may be worth it Outsourcing consideration National average for hospitals is $.03 per dollar collected Smaller Critical Access hospitals closer to $.05 per dollar collected Benchmarks

18. Do we have expectations and performance standards for our Revenue Cycle staff and ….. Question #4

19. …do we monitor performance and provide incentives for excellence? Question #4 (continued)

22. Front end, middle and back office resources Raise performance level awareness Align goals Creates healthy competition Cream will rise to the top Expectations and Performance Standards

23. Expectations

24. Key Revenue Cycle Metrics HFM toolbox HARA Zimmerman

25. Incentive Plans 96% of other industries have incentive plans for employees Healthcare – less than 50% Be creative with incentives

26. How are we managing the patient-responsible dollar? Question #5

27. Uncompensated Care by Type of Provider Source: Hadlye and Holahan analysis of 1998 -2000 data, 2004

28. Emergency Room 1/3 of ER patients have no insurance 29% national average collect in ER Discharge collection process –Need centralized exit point –Keep license –Train staff to bring back to discharge

29. When Respondents Who Had Received Recent Medical Care learned the Cost of their Treatment 63% don’t know the treatment costs until the medical bill arrives; 10% never know the cost. Source: Great-West Healthcare 2005 Consumer attitude toward healthcare survey When did you learn what the total cost of the treatment would be, including the amount that the insurance company would pay?

30. Page  30

31. Page  31 Self Pay Strategy Platform Deliverables Estimated Charges Eligibility Verification Estimated Income Charity Recommendation Maximum Payment Recommendation Payment Propensity Work-Flow Management Patient Demographic Data and Diagnosis Financial Data Financial Assessment Algorithm Client Specific Payment History

32. Estimate, Validate, and Advocate Estimate Charges, insurance coverage and patient portion Validate the information Advocate for the patient to deal with the obligation –Cash, Check or Credit Card –Payment plan –Medicaid Eligibility –Charity Care –Reschedule? Software is available to do this

33. Work status of uninsured head of household Nearly 85% of the uninsured are in working families. “Uninsured does not mean indigent and definitely not uncollectible.” The largest group of newly uninsured – some 811,000 people in 2001 - had annual incomes in excess of $75,000. In contrast, the number of uninsured with annual incomes of less than $25,000 fell 25% from 1995-2001. Forty percent of the uninsured population is from ages 18-34 – a group that is typically in good health and presumably considers their money better spent elsewhere. Many large insurance companies recognize these statistics and as a result are starting to offer customized programs for these groups – especially the young and healthy. Source: Employee Benefit Research Institute estimates from 2001 Census Data

34. GDRO by Payer Averages Self pay175 Medicare 34 Commercial 65 Medicaid 70

35. Capture all of the charges for the services that your providers perform. Insure that you are billing all parties that are responsible for payment Collect all cash up front for all scheduled surgeries and all co pays from non scheduled services Segregate self pay into charity, other payers and accounts with a propensity to pay. Sell or send the rest to collection.

36. Has a Chargemaster and APC review and assessment been performed recently? Question #6

37. DRG Coding APC Coding Inpatient Treatment Outpatient Treatment APC DRG Payment XRAY Lab EKG XRAY EKG Lab

38. Outpatient revenues are significant in rural/community hospitals CMS indicates a 47% underpayment APC Index of 3.0 Better performers have these common aspects :  Dedicated ownership of process (75%)  Supported by technology (47%)  Independent reviews (46%) APC/CDM Assessment

39. Effective APC Program Quarterly review of APC payments compared to charts Change processes to capture all charges Retroactively re-bill when appropriate Improve APC reimbursement

40. What are our days in Discharge to Final Bill? Question #7

41. Indicator of effective front end, charge capture and coding process Clients have wide range from 3–25 days Break into parts Sample accounts Determine where the bottlenecks are  Doctors sign-off  Coding  Daily billing Days from Discharge to Final Bill

42. Potential Solutions Outsource Coding Department Use Super Coders on an as needed basis – train staff Set goals and expectations Monitor top ten

43. Are we getting paid what we should be paid for services performed? Question #8

44. Same Services More Dollars

45. EOB review – sampling Use of software to monitor payment Outside review on contingency fee Payer report cards and payer meetings Most hospitals are leaving 2% to 5% on the table of non-government reimbursement if not using a contract management service Reimbursement % by Payer

46. Do we have an unpaid claims tracking mechanism? Question #9

47. Monitoring Trends Improve the front end processes Unpaid claims versus denial tracking Should take a systemic view - unbilled and denials Unpaid Claims Tracking

48. Unpaid Claims Measurement Tool

49. Do revenue cycle stakeholders regularly engage in clearing open items and process improvement meetings? Question #10

50. Collaboration between multiple functions, backgrounds, and skill sets Focus on large dollars Recurring errors Open communication and no finger pointing May require senior management involvement Regular Clearing Meetings

51. Discuss these questions with Revenue Cycle leader or key stakeholders Perform Benchmark Indicator Analysis (BIA) As a Revenue Cycle team, review the results Set realistic goals and expectations and achieve them Next Steps

52. “Learn from the mistakes of others – you can't make them all yourself.”

53. Questions?

54. Robin Bradbury 800-355-0410 robin@ereso.com