“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
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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
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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
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Monthly Dashboard
Posted key measures in Revenue Cycle
areas
Monthly team meetings
Incentives
End of Month flurry to meet goal
Incentive Plans
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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