Revenue Cycle Performance Eric Burgmaier, CPA 505-299-8383
www.myabqcpa.com
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Eric Burgmaier, CPA Managing Partner of Burgmaier & Helton,
CPAs Named to New Mexico Business Weekly top 25 CPA firms in the
state Previously the CFO for UNM SOM Physician Group VP Finance
& Revenue Cycle for ABQ Health Partners Regional Executive
Elect for HFMA Region 10 I am NOT a coder, I am not a biller, I do
enter charges, and I do not post payments
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the current unrestrained [fee for service] payment system has
created a rate of volume growth that is unsustainable -The Medicare
Payment Advisory Commission, June 16, 2009, Letter to Congressional
Budget Office
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Bending the Cost Curve Affordable Care Act aka Obama care
Massachusetts Reform aka Romney Care Be prepared for: Global
Payments, Bundled payments, Risk sharing or Gain sharing,
Capitation Payments
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Are one of these in your future? ACOs IPAs MSOs Clinically
Integrated IPAs PCMH
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Top ten most challenging issues 1.Dealing with rising operating
costs 2.Managing finances with the uncertainty of Medicare
reimbursement 3.Maintaining physician compensation levels
4.Collecting from self-pay, high deductible plans 5.Negotiating
contracts with payers 6.Modifying physician compensation plans MGMA
Connexion, Medical Practice Today July 2010
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The Medical Group Management Association (MGMA) estimates that
payers underpay practices in the U.S. by an average of 7%-11%.
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Increasing Revenue Not always about better contract terms
Improving revenue cycle performance Measuring Key Performance
Indicators Reducing denials Improving collection efforts with self
pay accounts
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Carrier contracts Review contract terms annually, renegotiate
when it makes sense, How are your fees determined? Who pays GRT,
who doesnt? Do they comply? Lots of reasons insurance companies
screw up claim adjudication
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Know how you are reimbursed Contracts with carriers are usually
negotiated based on a percentage of New Mexico Medicare Sometimes
there is only a single multiple Sometimes the multiple is
separately negotiated for E&M, Surgical, radiology, pathology
Sometimes you might have a contract with a carrier that uses an
internally developed RBRVS model Could also see a fee schedule that
spans multiple years, i.e., surgical on a 2001 NM Fee Schedule and
all other services on the current NM Fee Schedule RBRVS could be
held constant on a given year but the conversion factor is
negotiated
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What is RBRVS? Resource based relative value scale (RBRVS) is a
schema used to determine how much money medical providers should be
paid. It is currently used by Medicare in the United States and by
nearly all Health maintenance organizations (HMOs).schema
MedicareUnited StatesHealth maintenance organizations RBRVS is the
source for RVUs
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What are RVUs? Work RVUs: Physician component to value salary
and benefits Practice RVUs: Office expenses including depreciation,
rent, office supplies, support staff and benefits Malpractice RVUs:
Both practice and physician insurance
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Seven components to reimbursement Conversion factor RVUs Work
Practice Malpractice Geographic Practice Cost Index Work Practice
Malpractice
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99213 Fee Development
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Contract Summary
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Pay attention to rates
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How much Free Service? According to a recent study by CMS Only
70% of claims are paid correctly the first time they are submitted
The remaining 30% are denied, lost, or ignored Of those a full 60%
are never resubmitted or appealed In summary 18% of medical claims
simply go unpaid, Free Service of about $125 billion annually
provided by medical practices
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Accounts Receivable KPIs If you cant measure it, you cant
manage it Most common Key Performance Indicators Gross Collection
Rate Days in Accounts Receivables Accounts Receivable Aging Cash in
the door Build goals, compare to best practices
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Gross Collection Rate GCR-on average what is collected against
the billed amount, By payer, by month, year to date, Compared to
prior yearto an expectation? Consistently measure overtime to
develop trends
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Reasons for changes in GCR Staff and system performance New
staff, untrained/undertrained staff, inefficient and poor
communication, lack of guidance and leadership Payer performance
Sudden increase in denials Decrease in reimbursement No pay or slow
pay
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Gross Collection Rate
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Days in Accounts Receivable How long on average does is take
for a claim to turn into cash? High performing practices take on
average 35 to 38 days to collect Objective is to drive this number
down, the longer and older the A/R is the less likely it is to be
collected
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A/R Aging Review and understand the system generated aging
report, Aged from date of service or date of claim submission?
Summarize to A/R less than 90 days and A/R greater than 90 days
old. Best performer practices have less than 20% of A/R greater
than 90 days old
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Aged AR by month
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AR Aging
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Plain old cash
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Monthly Cash Do you know what your total monthly collections
are by source? Do you trend collections? Is there an expectation?
Based on payer mix Based on Accounts Receivables Based on
Production
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It becomes immediately obvious that the Master Mind principle
holds the secret of the powers wielded by men who surround
themselves with other men of brains. When a group of individual
brains are coordinated and function in harmony, the increased
energy created through that alliance becomes available to every
individual brain in the group. Think and Grow Rich Every Day by
Napoleon Hill
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Best practices for Self Pay Develop written financial polices,
post them and educate patients Verify insurance coverage ahead of
scheduled appointments When reminder calls are made, if there is an
outstanding balance collect over the phone Collect co-pays and o/s
balances at time of registration
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Best Pract Denials Management Three reasons why denials are not
appealed 1.The denial is correct 2.No staff time to available to
appeal 3.Responsible staff does not know what to do Understand why
they occur and to the extent possible correct P&Ps to mitigate
Get claims out clean, high pass rate of 95% to 98% Staff can then
work claims in the 30 to 60 day bucket
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Examine your EOBs closely! When reviewing EOBs First, get your
contracts together, make sure you have your current amendments Are
individual line items, if denied, followed up on? What is the
process to follow up? Is the practice ever getting paid 100% of the
billed amount?
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Podiatry Facts
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Upcoming speaking events Feb 9 th, Improving Net Income in
Turbulent Times May, Effectively Using QuickBooks June, Using RVUs
To Measure and Manage Costs July, Year end Tax Planning, Session
One August, Year end Tax Planning, Session Two September, Year end
Tax Planning, Session Three October, Physician Compensation
Planning Dates and times will be posted on my web page
www.myabqcpa.com