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Ralph J. Llewellyn, CPA, CHFP
Partner
Eide Bailly LLP
www.linkedin.com/in/ralphllewellyn
701-239-8594
Road to Value:
What’s Most Important to Know and Do to
Financially Position the Hospital for the Future
(Part 1)
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Positioning Agenda
• Monitor and Improve Financial Viability
• Increase revenues
• Decrease expenses
• Monitor and Improve Quality
• Improve Data Management Skills
• Access to Ongoing Education
• Enhance Value
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Top Priority
• Accountability must be assigned and accepted
• No excuses
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Increasing Revenues
• Attempts to increase (or at least maintain)
revenues is critical
• Physician relationships
• Volumes
• Revenue Cycle
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Physician Relationships
• The move to value based and population management will require providers to enhance their relationships with their primary care providers• Employed
• Contracted
• Visiting
• Other
• Physicians drive covered lives and ultimately what providers are involved in care
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Physician Relationships
• Improved relationships require an alignment of
vision
• Confidence and trust between physicians and
hospitals
• Physician input in change
• Physician champions
• Meaningful and timely feedback
• Shared levels of accountability
• Recognition and rewards
• Aligned vision
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Confidence and Trust
• Communication
• Key to develop strong positive relationships
• Failure to properly communicate leads to distrust
• Board involvement
• Board position
• Promotes discussion of physician issues
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Physician Input in Change
• Input on significant issues
• Creates or enhances shared partnership and
vision
• Creation of Decision Flow Charts
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Physician Champions
• Physician champions can assist garner support
on difficult issues
• Provide necessary documentation, vision, and
arguments to champion
• Champion promotes necessary positions
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Meaningful and Timely Feedback
• Physicians expect timely decisions and action
on issues
• Hospitals are frequently slow in acting on
issues
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Shared Levels of Accountability
• Establishment of expectations and
accountability
• Physician/Provider Compact
• Set expectations
• Financial
• Otherwise
• Hold accountability
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Shared Levels of Accountability
• Identification of tools and processes to enhance
productivity
• Streamline processes
• Improve productivity
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Recognition and Rewards
• More than just compensation
• Provide leadership development
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Volumes
• The focus on volumes is changing
• Past
• Surround patients with services and provide as many
services as possible to each patient
• Future
• Maintain the number of services rendered by facility by
increasing the number of lives covered and providing
minimum number of services and least costly services to
improve their health and address chronic issues
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Volumes
• Future
• Total cost of population health will be most important
• Focus on increasing market share
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Market Share
• Community Health Needs Assessment
• Understand current market share
• Understand future market needs
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Community Health Needs Assessment
(CHNA)
• CHNA provides vital information to determine
opportunities and risks to current market share
• Recommend completion of CHNA even if not
required
• View the CHNA as an opportunity and not just a
legal requirement
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Community Health Needs Assessment
(CHNA)
• Need to develop a strategic plan based on the
findings of the CHNA
• Focus on addressing issues identified in CHNA
through development of services or
collaboration with others to provide the
necessary services
• Send the message that you are an engaged
party in the provision of the healthcare needs in
the community18
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Community Health Needs Assessment
(CHNA)
• Monthly reporting on status of plan
• Increase the number of covered lives and retain
services locally when possible and appropriate
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Market Share
• Providers need to understand their market
share
• Percentage of market share captured
• Who is capturing the market share you are missing
• Cause for lost market share
• Quality
• Real
• Perceived
• Physician preference
• Location
• Hours
• Awareness
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Market Share
• Understand the future of your market
• Population trends
• Inpatient trends
• Outpatient trends
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Market Share
• Population trends
• Increases and decreases
• By subsections of the market
• Changes in the following:
• Age
• Sex
• Ethnicity
• Other
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Market Share
• Inpatient service trends
• By service line
• Data will show current volumes as well as anticipated
changes over a 5 and 10 year time period for service
area
• Volumes for total population
• Includes all providers
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Volumes – Inpatient Trends
Source : The Advisory Board
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Market Share
• Outpatient service trends
• By service line
• Data will show current volumes as well as anticipated
changes over a 5 and 10 year time period for service
area
• Volumes for total population
• Includes all providers
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Volume – Outpatient Trends
Source : The Advisory Board
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Revenue Cycle
• Changes in the industry have increased the
challenges in the revenue cycle
• Strategies
• Establishment and adherence of policies and
procedures
• Improve quality of documentation and coding
• Maximize use of technology
• Drive down days in accounts receivable
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Revenue Cycle – Patient Access
• Upfront processes are becoming more
important than ever
• Higher levels of patient coinsurance and deductibles
• Increasing mobility of patients
• Changes in health insurance carriers
• Significant variances in patient access
processes
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Revenue Cycle – Identity and
Responsibility
• Hard to collect if you don’t properly identify the
patient
• Photo identification
• Insurance cards
• Insurance verification
• Processes must be established
• Accountability must be assigned
• After hours included!!
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Revenue Cycle – Identity and
Responsibility
• Identification of coinsurance, deductibles, and
copays
• Identify estimates prior to scheduled services
• Estimate amounts for non-scheduled services
• Collect estimated balances
• Identify loan sources
• Establish payment plans if necessary/appropriate
• Includes Emergency Room for non-emergent patients
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Revenue Cycle – Identity and
Responsibility
• Identification of coinsurance, deductibles, and
copays
• Identify charity care recipients
• Application
• Presumptive methods
• Reschedule services or redirect place of service is
appropriate
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Revenue Cycle – Identity and
Responsibility
• Back-end
• Establish policies
• Payment plans
• Collection agencies
• Follow policies as identified
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Revenue Cycle – Charge Capture/Coding
• Best practice facilities capture the revenues for
services they are rendering
• Significant area of opportunity for most facilities
• Common areas of confusion/lost revenues
• Outpatient Nursing Procedures
• Pharmacy
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Outpatient Nursing Procedures
• Outpatient nursing procedures
• Facilities miss these opportunities
• CAH
• PPS
• IV therapy, injections, Foley catheter insertions, etc.
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Outpatient Nursing Procedures
• Outpatient nursing procedures
• Lost charges occur due to a lack of understanding of
what is actually separately reportable
• Nursing documentation can affect ability to capture charges
• Start times
• Stop times
• Site
• Drugs
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Outpatient Nursing Procedures
• Outpatient nursing procedures
• Recommend a team from nursing and HIM meet
frequently to discuss documentation and charge
capture opportunities
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Charge Capture/Coding
• Pharmacy
• Pharmacy charges are often missing from claims
• Totally missing
• Errors in proper reporting of units
• Overreliance on systems
• Dispensing units
• Unit conversion factors
• Need to develop processes to review and update
processes
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Documentation/Coding
• Documentation and coding are importance for
all providers
• CAHs included
• Documentation and coding tell payors how
complicated of patients are being cared for
• Failure to properly capture information tells payors
we are caring for less complex patients at a higher
cost
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Pricing
• Charges for rural services frequently is well below that of larger counterparts for the exact same services• Often 20-40% below competitors
• Sometimes consistently below cost
• Lack of appropriate pricing strategy may caused by numerous issues• Restraints placed on Management by Board
• Lack of understanding of reimbursement impact
• Inability to access market based data
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Pricing
• Successful providers have strong pricing
strategies
• Use of market based data
• Commercial sources
• MedPar
• 50th - 75th percentile pricing
• Do not need to high price provider
• Annual updates to pricing
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Timely Filing
• Why capture the charges and then not file them
timely?
• All Medicare claims must be filed within 1 year
of service
• Other payors may vary
• 90 days
• 30 days?
• Many facilities still missing the deadlines!
• Monitor write-off’s
• Separate account for tracking
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Denials Management
• Advanced Beneficiary Notices / Medical
Necessity
• Need to manage denials
• ABNs are not an option
• This is an issue of liability not a determination of proper care
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Denials Management
• Advanced Beneficiary Notices / Medical
Necessity
• Track denials
• Service
• Physician
• Staff performing service
• Etc.
• Emergency Room services are not exempt
• Increased frequency of denials
• Monitor
• Follow up with providers
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This presentation is presented with the understanding that the information contained does not constitute legal, accounting
or other professional advice. It is not intended to be responsive to any individual situation or concerns, as the contents of
this presentation are intended for general informational purposes only. Viewers are urged not to act upon the information
contained in this presentation without first consulting competent legal, accounting or other professional advice regarding
implications of a particular factual situation. Questions and additional information can be submitted to your Eide Bailly
representative, or to the presenter of this session.
Questions?
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