“Top Ten Questions” Robin Bradbury 800-355-0410 robin@ereso.com Time and Energy Revenue Cycle 101 When performance is measured, performance improves. Revenue Cycle 102 Objective measures are always better than subjective measures. Preview Metrics Sharing with Staff Cost to Collect Expectations Self Pay Charge Capture DNFB Contract payments Denials Meetings Question # 1 What are the “key” measures for the Revenue Cycle? Key Measures • • • • • • • • Days in Revenue Outstanding Cash Collections Cost to Collect 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 Benchmark Data • • • • • HARA report HFMA MAPS Zimmerman Regional Groups Your facility 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% Value Proposition Actual Example Hospital Peer Group Difference AR Days Reduction 82 43 39 Days over 90 Reduction 31.7% 24.4% 7.3% 24.2 7.2 17.04 DNFB Reduction Cost to Collect Reduction $ 0.027 $ 0.025 $ 0.002 Bad Debt Write off Reduction 8.9% 2.3% 6.6% Charity Write off Reduction 1.9% 6.9% -5.0% Cash Opportunity $1,476,815 $217,374 $652,439 $33,356 $855,290 NA Question #2 How do you document and share this information with the Revenue Cycle staff? Key Measures • • • • • Monthly Dashboard Posted key measures in Revenue Cycle areas Monthly team meetings Incentives End of Month flurry to meet goal Incentive Plans • • • 96% of other industries have incentive plans for employees Healthcare – less than 50% Be creative with incentives Question #3 What is our cost to collect a dollar? Benchmarks • • • • Good comparative measure (common definition) Important consideration when evaluating investment in resources – more cash intake may be worth it National average for hospitals is $.03 per dollar collected Smaller and Critical Access hospitals closer to $.05 to $.10 per dollar collected Question #4 Do we have expectations and performance standards for our Revenue Cycle staff and ….. Question #4 (continued) …do we monitor performance and provide incentives for excellence? Expectations and Performance Standards • • • • • • Measure metrics and behaviors Front end, middle and back office resources Raise performance level awareness Align goals Creates healthy competition Cream will rise to the top Expectations Changing the Paradigm • • • • • • How do we measure effective follow up? Touch as many accounts as possible? Dollars in the door? Cost to collect? Use technology to reduce touches, increase effectiveness and reduce costs. Example of large hospital versus small hospital and eligibility. re|discover Proprietary technology Focus on discovery quickly of outstanding issues Focus on dollars resolved not touches Paradigm shift Reduced human intervention Used in our cash acceleration, insource and wind down projects Wildly Important Goal1 • Teams need to be engaged in pursuit of the goal • Teams should be involved in goal setting based on higher level plan developed • Where do you want to go and what do you want to be and how do you want to perform and be recognized in the industry? 1 Drawn from text The 4 Disciplines of Execution by McChesney, Covey and Huling Lead & Lag Measures1 • Lead Measures – Those measures that are impacted and measured on a daily basis that impact the Lag Measures • Quantity of calls made, quantity of accounts or credits resolved, promises to pay, etc • Lag Measures – Measures that occur after the fact • Gross Days, Cash, Net Days, % of AR > 90 days, etc – Drawn from text The 4 Disciplines of Execution by McChesney, Covey and Huling 1 Question #5 How are we managing the patient-responsible dollar? The Process..… Registration Patient Data Charges Billing Payment Collection Payer Contract Claim Cash Adjustment s Other Payers Self-Pay Cash Bad Debt Institute for Health Care Revenue Cycle Research - A Division of Zimmerman, LLC. National Pledge to Reform Uncompensated Care Reform Underway: Adopting Best Practices to Reduce Uncompensated Care and Improve the Patient Experience. a special supplement to PATIENT PAYMENT BLUEPRINT™ 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. 63% 15% 10% 7% Before the treatment At the time of the treatment After the treatment Never 2% 3% Still in treatment/still having medical problems Not sure When did you learn what the total cost of the treatment would be, including the amount that the insurance company would pay? Source: Great-West Healthcare 2005 Consumer attitude toward healthcare survey 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 Cascading questions • Will you be paying cash, check or credit card? • Do you have a card on file with us? If, no…would you like to? • Do you want to take advantage of our multiple payment plan options including interest free payment arrangements? • Do you want us to help you qualify for Medicaid? • Do you want us to help you qualify for our charity care program? • Should we reschedule this procedure? 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 Technology Charge Estimators Multiple point of service collection points Eligibility Verification Stratification tools Payer Search tools Page 38 Self Pay Strategy Platform Deliverables Patient Demographic Data and Diagnosis Financial Data Financial Assessment Algorithm Estimated Charges Eligibility Verification Estimated Income Client Specific Payment History Charity Recommendation Maximum Payment Recommendation Payment Propensity Work-Flow Management Page 40 Results Measurable Results from Presumptive Charity Policy and Self Pay Stratification 1 Reduced placements of self pay accounts to collection agencies by nearly 50% within first six months 2 Increased cash receipts on self pay accounts by over 22% during first 90 days 3 Reduced FTE allocation for follow up on self pay accounts by 25% 4 Reallocated 60% of FTE staff previously assigned to charity application processing 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. Send the rest to collection. Question #6 Has a Chargemaster and charge capture review and assessment been performed recently? Inpatient Treatment Outpatient Treatment EKG EKG DRG Coding APC Coding EKG DRG Payment APC Charge Capture Review • • • • Outpatient revenues are significant particularly in rural/community hospitals CMS indicates a 50% underpayment Better performers have these common aspects: Dedicated ownership of process (75%) Supported by technology (47%) Independent reviews (46%) Marshalltown example Effective Charge Capture Review Program • • • • • Quarterly review of outpatient payments compared to charts Utilize a Nurse Auditor Change processes to capture all charges Retroactively re-bill when appropriate Improve reimbursement Question #7 What are our days in Discharge to Final Bill? Days from Discharge to Final Bill • • • • • 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 Potential Solutions • • • • Outsource some of the Coding Use Super Coders on an as needed basis – train staff Set goals and expectations Monitor top ten DNFB accounts Question #8 Are we getting paid what we should be paid for services performed? Reimbursement % by Payer • • • • • • EOB review – sampling Compare to net revenue calculation 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 Question #9 Do we have an unpaid claims tracking mechanism? Unpaid Claims Tracking • • • • • Monitoring Trends Improve the front end processes Unpaid claims versus denial tracking Should take a systemic view unbilled and denials Unpaid Claims Measurement Tool Dollars Worked By Reason Code - General Hospital 2/17/03 to 2/28/03 Balance is self pay Past Timely Filing Deadline Insurance never received - correct address Incorrect insurance information Never billed In process at insurance Reason Code Secondary insurance never billed Balance is 1500 Unknow n Invalid coding Insured information never received Pmt. or Adj. not posted, or posted incorrectly Insurance never received - incorrect address Insurance processed original claim incorrectly Contractual w rite-off Information from insured never received Additional request for information never returned 5 day prior IP/OP overlap In medical review at insurance company $0 $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 $140,000 $160,000 $180,000 $200,000 Dollars Question #10 Do revenue cycle stakeholders regularly engage in clearing open items and process improvement meetings? Regular Clearing Meetings • • • • • Collaboration between multiple functions, backgrounds, and skill sets Focus on large dollars – use a top ten concept Recurring errors Open communication and no finger pointing May require senior management involvement Next Steps • • • • 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 Same Services More Dollars “Learn from the mistakes of others – you can't make them all yourself.” Questions? Robin Bradbury 800-355-0410 robin@ereso.com