Best Practices in Financial Management Presented by: Teri U. Guidi, MBA, FAAMA President Oncology Management Consulting Group

3-Part Best Practice Series Best practices in purchasing Best practices in operations Best practices in financial management

Why Is the Best Practice Series Important? To determine if we can reduce costs To determine if resources are used wisely To review and identify steps in the revenue cycle process where improvements can be made To improve financial stability in a complex healthcare market To improve patient care

Target Departments of Best Practice Series Finance and accounting Payer contracts Purchasing/procurement Pharmacy Oncology/infusion services

Program Overview Formulary controls Financial modeling Accounting and reporting Fiscal responsibility

Formulary Controls Adding new products, removing or replacing existing products – Clinical criteria  FDA, Compendia  Clinical acceptance (pharmacy, clinicians) – Financial criteria  Cost to acquire, handle  Reimbursement (drug and administration) – Operational considerations  Special handling  Impact on service volumes – Indirect impact considerations

Formulary Controls cont. Process –Therapeutics committee –Policy and procedure  Pharmacy  Use  Billing –Communication –“Fall out”

Financial Modeling Top volume products Top dollar products Bottom dollar products Regimen, not just units dispensed Administration services

Examples * *All dollar figures except Medicare reimbursement rates are fictitious

Examples * *All dollar figures except Medicare reimbursement rates are fictitious

Financial Modeling Cost and reimbursement Payer differences

Examples * *All dollar figures except Medicare reimbursement rates are fictitious

Examples * *All dollar figures except Medicare reimbursement rates are fictitious

Accounting and Reporting Distinct cost/revenue center Accounting for rebates and discounts Expense variances or “what your CFO needs to understand” Profit and Loss reports

Profit and Loss Reports

Fiscal Responsibility Charge master maintenance – Content – Pricing Auditing – Charge capture and entry – Coding and billing – Denials and appeals Charity Care PATIENT ACCESS

Fiscal Responsibility Meets Patient Access Financial Coordinators – Drug replacement – Preauthorizations – ABNs – Prospective documentation – Applications for assistance

Fiscal Responsibility Meets Patient Access