Robin Bradbury 800-355-0410 robin@ereso.com “Top Ten Questions”

Robin Bradbury800-355-0410robin@ereso.com

“Top Ten Questions”

Time and EnergyTime and Energy

When performance is measured, performance improves.

Revenue Cycle 101Revenue Cycle 101

Objective measures are always better than subjective measures.

Revenue Cycle 102Revenue Cycle 102

PreviewPreview

Metrics Sharing with Staff

Cost to Collect Expectations

Self Pay Charge Capture

DNFB Contract payments

Denials Meetings

What are the “key” measures for the Revenue Cycle?

Question # 1Question # 1

• 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

Key MeasuresKey Measures

Benchmark Data Benchmark Data

• HARA report

• HFMA MAPS

• Zimmerman

• Regional Groups

• Your facility

Free Benchmark StudyFree Benchmark Studyhttp://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 PropositionValue PropositionActual Example

  Hospital Peer Group DifferenceCash

Opportunity

AR Days Reduction 82 43 39 $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 Reduction 8.9% 2.3% 6.6%

$855,290

Charity Write off Reduction 1.9% 6.9% -5.0%

NA

How do you document and share this information with the

Revenue Cycle staff?

Question #2Question #2

• Monthly Dashboard

• Posted key measures in Revenue Cycle areas

• Monthly team meetings

• Incentives

• End of Month flurry to meet goal

Key MeasuresKey Measures

Incentive PlansIncentive Plans

• 96% of other industries have incentive plans for employees

• Healthcare – less than 50%

• Be creative with incentives

What is our cost to

collect a dollar?

Question #3Question #3

• 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

BenchmarksBenchmarks

Do we have expectations and performance standards for our

Revenue Cycle staff and …..

Question #4Question #4

…do we monitor performance and

provide incentives for excellence?

Question #4 Question #4 (continued)(continued)

• 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 and Expectations and Performance StandardsPerformance Standards

ExpectationsExpectations

Changing the ParadigmChanging 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|discoverre|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 GoalWildly Important Goal11

• 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 MeasuresLead & Lag Measures11

• 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

1 – Drawn from text The 4 Disciplines of Execution by McChesney, Covey and Huling

How are we managing the

patient-responsible dollar?

Question #5Question #5

The Process..…The Process..…

Payer Contract

Claim

Cash Self-PayAdjustments

Patient Data

Other Payers Cash Bad Debt

ChargesRegistration

Billing

Payment

Collection

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 When Respondents Who Had Received Recent Medical Care Learned the Recent Medical Care Learned the

Cost of their TreatmentCost 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

15%7%

63%

10%2% 3%

Before thetreatment

At the time ofthe treatment

After thetreatment

Never Still intreatment/still

having medicalproblems

Not sure

When did you learn what the total cost of the treatment would be, including the amount that the insurance company would pay?

Estimate, Validate, and Estimate, Validate, and AdvocateAdvocate

• 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 questionsCascading 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 RoomEmergency 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

TechnologyTechnology

Charge Estimators

Multiple point of service collection points

Eligibility Verification

Stratification tools

Payer Search tools

Page 38

Page 40

Self Pay StrategySelf 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

ResultsResults

Reduced placements of self pay accounts to collection agencies by nearly 50% within first six months

2

3

Increased cash receipts on self pay accounts by over 22% during first 90 days

4

1

Measurable Results from Presumptive Charity Policy and Self Pay Stratification

Reduced FTE allocation for follow up on self pay accounts by 25%

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.

Has a Chargemaster and charge capture review and assessment

been performed recently?

Question #6Question #6

DRGCoding

APCCoding

InpatientTreatment

OutpatientTreatment

APCAPCAPCDRG Payment

XRAY

XRAY L

abLab

EKG

EKG

XRAY

EKG

Lab

• 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

Charge Capture ReviewCharge Capture Review

Effective Charge Capture Effective Charge Capture Review Review ProgramProgram

• 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

What are our days in

Discharge to Final Bill?

Question #7Question #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 toDays from Discharge toFinal BillFinal Bill

Potential SolutionsPotential 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

Are we getting paid what we should be paid for services

performed?

Question #8Question #8

• 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

Reimbursement % by PayerReimbursement % by Payer

Do we have an unpaid claims tracking mechanism?

Question #9Question #9

• Monitoring

• Trends

• Improve the front end processes

• Unpaid claims versus denial tracking

• Should take a systemic view - unbilled and denials

Unpaid Claims TrackingUnpaid Claims Tracking

Unpaid Claims Measurement ToolUnpaid Claims Measurement Tool

Do revenue cycle stakeholders regularly engage in clearing

open items and process improvement meetings?

Question #10Question #10

• 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

Regular Clearing MeetingsRegular 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 StepsNext Steps

Same ServicesSame ServicesMore DollarsMore Dollars

“Learn from the mistakes of others – you can't make them

all yourself.”

Questions?Questions?

Robin Bradbury800-355-0410robin@ereso.com