Optimizing the Revenue Cycle in Uncertain Financial Times

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Optimizing the Revenue Cycle inUncertain
Financial Times

• Valerie Barckhoff
• Vice President, Revenue Cycle

7th Annual Oklahoma Rural Hospital Conference
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Sign of the Times
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Hospital Challenges

• Shrinking Reimbursement Dollars
• Tightening Regulatory Environment
• Increasing Workforce Challenges
• Growing Under- and Un-Insured Patient Populations
• Increasing Public Scrutiny

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How have Hospitals Responded?

• Reductions in Force (RIF)
• Expense Reduction Initiatives
• Education
• Consulting
• Purchased Services
• Elimination of Services
• Bankruptcy Filings
• Hospital Closings

In ShortHospitals are No Longer Recession Proof
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Now What?
Every Hospital has Revenue Cycle Opportunities
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What is the Revenue Cycle

• Defining the Revenue Cycle

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Most Hospitals

• Focus on the Back-end

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But

• The Majority of Your Net Revenue Opportunity
  Resides in the Front-End

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First, Form a Steering Committee

• Forming a Revenue Cycle Steering Committee
• Representation from Revenue Cycle Departments
• Patient Access
• Case Management
• HIM
• Reimbursement (Charge Master)
• PFS
• Representation from Non-Revenue Cycle Departments
• Emergency Department
• Outpatient Surgery
• Nursing Leadership
• Compliance
• Finance

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Next, Define a Successful Revenue Cycle

• Patient Access
• Registration Accuracy QA
• Registration Accuracy Billing Systems
• Point of Service Collections
• Pre-Registration
• Case Management
• Concurrent Denial
• Retrospective Denial
• Health Information Management
• DNFC
• Average Turnaround Time for Record Requests
• Coding Related Write-Offs

• Patient Financial Services
• Denials as of Gross Revenue
• of Overturned Clinical Denials
• Net days Receivable Outstanding
• Cash Receipts as of Net Revenue
• Medicaid Pending as a of Self-Pay Receivables
• Credit Balance A/R
• Bill Hold Days
• First Pass
• Bad Debt as of Net Revenue
• Charity Write Offs as of Gross Revenue
• Late Charges as of Gross Revenue

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Focus Your Efforts

• Identify High Priority/High Impact Opportunities

Impact
MED
LOW
HIGH

• DNFC
• AR Days
• Late Charges

• Registration QA
• First Pass

HIGH

• Pre-reg
• Bill Holds

• Point of Service
• Bad Debt

• Charity Write Offs
• Cash as Net

MED
Priority
EXAMPLE

• Write Offs

• Information TAT

LOW
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Now That You Know Where To Focus
Some Ideas on Process Improvement
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Patient Access

• High Impact Area
• Pre-Registration and Financial Counseling
• Issue
• Growing number of under insured and uninsured
  patients.
• Increased co-pays Co-insurance High
  Deductibles Self-Pay out of pocket
• Likelihood of Collections1
• Pre-access 100
• Admission 75-80
• In-house 65-75
• Upon Discharge 60-70
• After Discharge - lt40
• Over 75 of Hospitals have limited or no
  collections efforts prior to or at time of service

1. Source Passport Market Trends
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Patient Access, contd

• Pre-registration and Financial Counseling Best
  Practices
• For scheduled patients
• Patients pre-registered 2-5 days prior to service
• Includes eligibility, insurance verification, and
  pre-certification
• Patients financial responsibility calculated and
  communicated prior to visit
• Credit cards accepted at pre-registration
• Patient portions collected prior to visit
• Financial counseling arrangements in place prior
  to visit
• Payment plans Health care loans Self pay
  discounts and prompt pay discounts
• Elective procedures postponed until accounts
  passes financial clearance
• Should have 100 secured financial arrangements
  for elective, scheduled patients

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Clinical Departments

• High Impact Area
• Charge Entry and Late Charges
• Issue
• On Average, 4-5 of gross revenue is lost
• Focus has been on clean charge master and billing
• Engaging the clinical department has not been
  focus for many facilities
• Charge Entry and Late Charges Best Practices
• Track late charges monthly and calculate of
  departments monthly gross revenue
• Nurse Audit function that focuses primarily on
  outpatient claims auditing
• Monthly review by clinical departments on late
  charges data and lost charge audits
• Process Improvement plans implemented

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Patient Financial Services

• High Impact Area
• Bill Hold Days and First Pass Rate
• Issue
• Growing number of edits based upon payor rules or
  provider established rules
• Approximately 75 of your business office staff
  is dedicated to rework
• Typically, billers correct and process the
  claims. Production shop mentality
• Manual intervention of claims can result in
• Incorrect payments
• Inaccurate units
• Compliance concerns
• Delays in cash (time value of money)

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Patient Financial Services, contd

• Bill Hold Days and First Pass Rate Best Practices
• Claims scrubber edits are categorized by
  responsible department
• e.g., address errors assigned to Patient Access
• Data is tracked by error by department weekly
• Weekly team meetings to identify top bill hold
  (by dollars) edits
• Process Improvement Projects are implemented and
  tracked
• Team members are rotated as improvements are made
  and sustained

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Questions Answers

• Valerie F. Barckhoff
• VP, Revenue Cycle QHR
• Valerie_Barckhoff_at_QHR.com
• 1-800-233-1470 ext. 2046