Robin Bradbury

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

When performance is measured, performance improves. Revenue Cycle 101

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

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

Time and Energy

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

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

Benchmark Data HARA report Geographic region Your facility

Free Benchmark Study 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%

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 $652,439 Cost to Collect Reduction $ $ $ $33,356 Bad Debt Write off Reduction8.9%2.3% 6.6% $855,290 Charity Write off Reduction1.9%6.9% -5.0% NA

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

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

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

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

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

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

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

Expectations

Key Revenue Cycle Metrics HFM toolbox HARA Zimmerman

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

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

Uncompensated Care by Type of Provider Source: Hadlye and Holahan analysis of data, 2004

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

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?

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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

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

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 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 Forty percent of the uninsured population is from ages – 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

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

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.

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

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

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

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

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

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

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

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

Same Services More Dollars

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

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

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

Unpaid Claims Measurement Tool

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

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

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

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

Questions?

Robin Bradbury