New Approaches to Automating the Accounts Receivable Cycle

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New Approaches to Automating the Accounts
Receivable Cycle

• Presented to the HFMA Conference
• San Antonio, Texas

This presentation is available on line at
www.HLSC.com
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Presenters

• Davis Watts, Tenet Healthcare
• George Floyd, HealthLogic Systems Corporation
• Angela Maher, PNC Bank

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Tenet Healthcare

• For profit hospital company listed on the NYSE
• Operates 113 Acute Care Facilities located in 14
  states
• Goals of the Company
• Leading Healthcare Provider
• Provide best patient care in markets that Tenet
  operates in
• Employer of choice
• Company operates on six different Hospital
  Information Systems
• Proponent of ANSI Standard Transactions Sets

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HealthLogic Systems Corporation

• Clearinghouse Operations in Atlanta, GA
• Field offices in Florida, Texas California
• Approximately 600 provider clients
• Approximately 250 employees
• Servicing all components of Payor and Provider
  Electronic Data Interchange
• Integrated Web based Document Imaging
• Implementing Expert Systems Technologies
• First to implement ANSI 837 standard
• Co-engineered/first to implement ANSI 835
• Member HCFA Interoperability Pilot for Internet
  Applications
• Expert systems and logic controlled applications
• HLLAPI applications for DDE and Internet

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PNC Bank

• PNC Bank is dedicated to and recognized within
  the healthcare industry
• Dedicated sales and product staff (healthcare
  expertise)
• Representation on X12N (Insurance) Subcommittee
• Active in healthcare industry conferences and
  associations
• First bank to implement comprehensive 835
  programs.
• Servicing a broad spectrum of organizations
  within the healthcare industry (payors,
  providers, Medicare FI, government agencies)
• Unique combination of products to effectively
  serve payor and provider needs

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Topics of Discussion

• Transaction processing trends
• Payor claims and payment methods mix
• Standardization of EDI formats
• Documentation and Attachment Issues
• Managed Care Collections Processes
• CWF settlement through the PSR

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Administrative Expense Vs. Volume
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Administrative Expense Vs. Volume
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Healthcare Industry Spending Trends and Statistics

• Spending is growing at an accelerated pace
• According to HCFA, national healthcare
  expenditures amounted to 1.1 trillion in 1997
  (13.5 of GDP)
• HCFA projects national healthcare expenditures to
  double to 2.2 trillion by 2008 (16.2 of GDP)
• Approximately 25 of all expenditures are related
  to administrative functions (HCFA)
• Finance, Billing and Collections
• Purchasing and Materials Management
• Admissions/Medical Records

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Classes of Administrative Expenses

• Providers
• Registration document capture and benefit
  determination
• Charge Capture and Procedural Encoding
• Diagnosis Encoding and Medical Records management
• Bill preparation, presentment, adjustment,
  logging collections
• Regulatory Compliance and final settlement
• Payors
• Claims capture, adjudication and payment
• Coordination of Benefits with other payors
• Managing plan enrollment
• Eligibility

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The Payment Methods Mix
Payment Method
East S. Central
West S. Central
Pacific
All Hospital
Middle Atlanta
- Full Charges
22.9
31.9
35.1
10.6
27.1
- Discounted Charge
11.5
1.1
25.8
15.9
25.0
27.9
9.5
13.4
23.7
16.3
- Per diem rates
- Multiple per diem
7.7
23.8
15.5
31.3
13.8
- Fixed rate per diem
20.8
4.8
3.1
5.9
7.8
- Capitation fee
1.1
1.3
1.0
8.1
4.1
4.1
3.1
2.5
2.8
- Retrospective formula
2.2
0.0
- Leased bed
2.3
0.0
0.6
0.8
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Technology Solutions

• HIPAA Mandated ANSI standards for EDI
• Connectivity access improvements. IP networks
  replace modems at lower cost
• Document Imaging Standards
• Public Key Infrastructure Security Standards
• HCFA standards for Web based HealthCare data
  exchange
• E-mail with attachments

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ANSI X12 Transaction Sets

• HIPAA Mandated in ANSI version 4010
• 270/271 - Health Care Eligibility/benefit Inquiry
  and Information Response
• 276/277 - Health Care Claim Status Request and
  Response
• 835 - Health Care Claim Payment/Advice
• 837 - Health Care Claim
• Others in development
• 275 - Patient Information to Support a Health
  Care Claim or Encounter (includes HL7 portion and
  LOINC encoding)
• 278 - Health Care Services Review
• 811 - Enrollment Invoice

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New ANSI 837 Electronic Claims Optional Data
Elements

• Claim Delay Reason Code
• Supplemental Information
• Paper EOB request Indicator
• Contract Information
• Adjusted Repriced Claim
• Claim Serial Number for Clearing Houses
• Line Item Supplemental Information
• Others requiring maps and feeds

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A Solutions Model

• Revenue Cycle Focus
• Integration of Standards
• Payor / Provider cooperation for full scope
  implementation of standards
• Virtual Business Office
• Leveraging of new technologies
• Standardization and Centralization

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The Revenue Cycle Playing Field
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Registration Admissions
Case Study A
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Registration Admissions
Case Study B
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Inpatient Continuing Stay Activities Admissions
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Inpatient Continuing Stay Activities Admissions
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Bill Production, Editing Submission
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Bill Production, Editing Submission
Case Study F
Case Study F
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Closed Cycle Payor Settings
Case Study G
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Closed Cycle Payor Settings
Case Study H
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Payments and EOB Processing
Case Study I
Matrix
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Payments and EOB Processing
Case Study J
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Payor Settlement Reconciliation
Case Study L
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The Big Picture
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Payor Settlement Reconciliation
Remit 1
Primary
Remit 2
Patient xxx
Secondary
Tertiary
Patient yyy
Primary

• Payer specific codes
• Expected payment schedule
• Summary actual
• Differences

• Full remit detail
• Rejection codes
• Remit/Check number
• EOB information

• Patient demographics
• Clinical data
• Stay dates
• Cost Profit
• Ad hoc/User data

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Payment Variance Analysis
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In Closing

• Begin Planning NOW for new standards
• Develop Provider / Payor working relationships
• Upgrade Internet Intranet connectivity
• Upgrade work stations and Operating System
  Software
• Implement automation