Session 5: Academic Medical Center Revenue Cycles

1
Session 5 Academic Medical Center Revenue Cycles
2
Session 5 Academic Medical Center Revenue Cycles

• Part 1 Sponsored Research Revenue Cycle
• Part 2 Patient Care Revenue Cycle
• Part 3 Tuition Revenue Cycle

Session 4 - Financial Reporting
3
AGENDA
Introduction 15 Mins
Part 1 Sponsored Research Revenue Cycle 60 Mins
Break 15 Mins
Part 2 Patient Care Revenue Cycle Processes Controls A Closer Look 45 Mins
Break 15 Mins
Part 2 Patient Revenue Cycle at CU Case Studies 60 Mins
Part 3 Tuition Revenue Cycle 30 Mins
TOTAL 240 Mins
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GOALS AND OBJECTIVES

• Revenue Cycles
• Understand the key processes that make up these
  revenue cycles
• Understand the controls that can be instituted
  and monitored within the revenue cycle process
• Understand potential pitfalls associated with
  various key processes

5
CUMC 2003-2004 Source of Operating Funds
Total 1.2 Billion
Note Other includes gifts, endowment, patent
and miscellaneous revenues
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SPONSORED RESEARCH REVENUE CYCLE
Part 1

The sponsored research funding cycle begins with
a program announcement by a granting agency and
ends with the final progress report and financial
close-out. Investigators prepare applications
which are approved by their institution and the
granting agency performs peer review and scoring.
A notice of grant award is issued and the
principal investigator begins conducting
research. Post-award activities include
financial monitoring to ensure funds are spent in
accordance with program goals and objectives.
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CUMC SPONSORED RESEARCH FUNDING
8
SPONSORED RESEARCH REVENUE CYCLE

Program announcement
Final Reports Closeout
Application preparation
Progress Reports
Institutional review
Institution Request Reimbursement
Application submission
Post Award Functions
Pre Award Functions
Peer review and scoring
Award Adjustment
PI expends funds Institution Monitors
Notification of pending award
Cost center created
Award negotiation
Award issued
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SPONSORED RESEARCH REVENUE CYCLE

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SPONSORED RESEARCH REVENUE CYCLE

• Pre Award Process
• Finding the Money
• Senior Investigators
• Know about announcements
• Should need minimal support
• Junior Investigators
• Access to announcement databases (e.g. Community
  of Science)
• Need support

11
SPONSORED RESEARCH REVENUE CYCLE

• Pre Award Process
• Application Preparation
• Generally prepared by the PI
• Guidance from research administration office on
• Sponsor format and forms
• Necessary regulatory approvals
• Sponsor due dates
• Scientific content may be reviewed by senior
  investigator

12
SPONSORED RESEARCH REVENUE CYCLE

• Pre Award Process
• Application Preparation
• Some institutions provide grant writing support
  and mock peer review
• Effectiveness needs to be assessed
• Grant applications generally are reviewed
  differently than contract applications
• Best Effort vs. Procurement

13
SPONSORED RESEARCH REVENUE CYCLE

• Budgeting Considerations
• Institutional policies
• Program announcements
• PI effort
• NIH Grants Policy Statement
• Modular Grants policies
• Federal cost principles
• OMB Circular A-21
• Cost accounting standards
• Departmental budget

14
SPONSORED RESEARCH REVENUE CYCLE

• Award Budget
• Award Budget Direct Costs FA Costs

15
SPONSORED RESEARCH REVENUE CYCLE

• Criteria for Budgeting and Charging a Direct Cost
• Some simple maxims
• The budget should represent the best intentions
  of the investigator
• Direct costs charged should represent those costs
  necessary to meet the projects scientific and
  technical requirements
• The relationship between the charge and the
  science should
• Be clear and close
• Costs should support the projects purpose and
  activity
• To be charged to an award, a direct cost should
  be included in the awarded budget, or the cost
  must be permitted within rebudgeting authority
  granted by the sponsor
• The cost must not be restricted by the sponsor

16
SPONSORED RESEARCH REVENUE CYCLE

• Pre Award Process
• Institutional Reviews
• To ensure compliance requirements are met for
• Human / animal subject use
• Research safety and hazardous materials
  management
• Facilities
• That the budget is appropriate for research
  proposed
• That budgets costs are consistent with
  institutional practices
• To identify agency restrictions and cost share
• That the application is complete
• Provides assurance to the institutional official
  signing the application that the scientific and
  administrative requirements have been met

17
SPONSORED RESEARCH REVENUE CYCLE

• Pre Award Process
• Submission of the Application
• Submission can be
• Electronic
• Manual
• Institutional systems may have
• Common database
• Shared with
• Central Office of Research Administration
• Finance

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SPONSORED RESEARCH REVENUE CYCLE

• Pre Award Process
• Sponsor Peer Review and Scoring
• Applications are reviewed for scientific merit
  and the research goals of the agency
• Priority scores are often used, e.g., NIH, based
  on
• Significance
• Approach
• Innovation
• Investigator track record
• Environment and facilities
• Representation of population to be studied
• Reasonableness of the proposed budget
• Adequacy of proposed protection for humans,
  animals, and the environment

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SPONSORED RESEARCH REVENUE CYCLE

• Pre Award Process
• Award Negotiation
• Limited negotiation effort with federal sponsors
• Generally a unilateral cut Feds argue grants are
  assistance
• Contracts require extensive cost justification
• Greater negotiation effort with non-government
  sponsors
• Indirect costs
• Cost reimbursement
• Intangible costs
• Technology transfers, e.g., patent ownership,
  licensing
• Coordinate with Central Office of Research
  Administration

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SPONSORED RESEARCH REVENUE CYCLE

• Post Award Process
• Award Issued
• About 20-25 of applications are awarded
• Renewals generally higher
• Award is made to the institution, shared
  responsibility between Institution and PI for
  proper project administration
• Terms and conditions are specified on the notice
  of grant award

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SPONSORED RESEARCH REVENUE CYCLE

• Post Award Process
• Federal Awarding Mechanisms
• Research and Training Grant
• Federal assistance providing money, property, or
  both to an eligible entity to carry out an
  approved project or activity
• Cooperative Agreement
• Substantial federal programmatic involvement with
  the grantee, e.g., clinical trials or multiple
  site projects
• Contract
• Mutually binding legal relationship between the
  contractor and the government for procurement of
  goods and services
• Most restrictive of all award mechanisms
• Most often used by Department of Defense and NASA

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SPONSORED RESEARCH REVENUE CYCLE

• Post Award Process
• FAS Account Created
• Budgeted in accordance to expenditures of
  approved project
• Direct expenditures
• Salaries and wages of personnel
• Lab supplies and materials
• Equipment
• FA (Indirect) expenditures
• Assigned to the project through the government
  negotiated overhead rate
• Facilities and operations
• Other administrative support

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SPONSORED RESEARCH REVENUE CYCLE

• Post-Award Process
• Reimbursement Methods
• Letter of credit
• Used for federal agencies awarding grants and
  cooperative agreements
• Vouchers
• Used for federal agencies awarding contracts
• Billing
• Used with non-federal sponsors
• May be cost reimbursement or payment for
  completed clinical trial study participant
• Whatever mechanism is used, consideration has to
  be given to cash flow and monitoring receivable
  amounts

24
http//www.cumc.columbia.edu/research/

• CUMC Faculty and Research InformationResearch
  Administration, Electronic Res Admin (RASCAL),
  Office of Grants and Contracts, University
  Campus Profiles, Faculty Profiles, Shared
  Equipment/Core Facilities, Campus Research
  Activities, Research Courses and Seminars,
  Publications, Policies and ProceduresResearch
  FundingFunding Databases, Funding Information
  by e-mail, Award Programs, Grant-Related
  Publications, Sources of Funding
  InformationNational and International Research
  ResourcesLinks to Funding Agencies NIH,
  Private Agencies, and others Grant Writing Tips,
  Electronic Forms, Grants Management, Bio
  Medical Research Ethics, Clinical Trials, 
  Intellectual Property/Tech Transfer, Commercial
  Institutions, Professional Societies

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http//www.cumc.columbia.edu/research/faculty.htm

• Office of Research Administration/Office of
  Grants and Contracts CU's Electronic Research
  Administration System (RASCAL) Columbia
  University Health Sciences Campus Profile
  Faculty Profiles Shared Equipment Core
  Facilities Directory Research Activity and
  Sponsored Projects Courses and Seminars
  Publications University Research Policies and
  Procedures
• Office of Research Administration/Office of
  Grants Contracts
• Manual of Policies and Procedures
• Research Administration FormsOffice of Grants
  Contracts, IRB, IACUC, Environmental Health and
  Safety, Radiation Safety, Columbia Innovation
  Enterprise, Office of the Treasurer Controller,
  Purchasing Office
• Research and Grants JournalMonthly listing of
  funding opportunities in the biomedical and
  behavioral sciences including those from federal
  agencies, state and local governments, voluntary
  health organizations, and foundations. Available
  in web-based and hard-copy formats.

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Manual ofPolicies and Procedureshttp//www.cumc.
columbia.edu/research/manual/ogcm2598.htm

• Columbia UniversityHealth Sciences
  DivisionOffice of Grants and Contracts
• Manual ofPolicies and Procedures
• TABLE OF CONTENTS
• 1. Introduction 2. General Information 3.
  Preparing the Application 4. Application
  Submission Procedures 5. Post-Award
  Administration 6. Close-Out
• 1. Introduction
• 2. General Information
• 2.1 Types of Sponsored Projects
• 2.1.1 Grants
• 2.1.2 Contracts
• 2.1.3 Research Subcontracts or Consortium
  Agreements
• 2.1.4 Fee for Service Contracts
• 2.1.5 Cooperative Agreements
• 2.2 How is a Sponsored Project different From a
  Gift?
• 3. Preparing the Application

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Research Funding http//www.cumc.columbia.edu/res
earch/funding.htm

• Research FundingResearch and Grants
  Journal Research Funding Databases
• Research Funding Information by e-mail Award
  Programs with a Limited No. of Allowed
  Applications
• Award Programs Reviewed and Funded
  Internally Award Programs Specifically for
  Equipment
• Honorific Awards Grant-Related Publications
  and Other Sources of Funding Information
• Links to Funding Agencies Writing a Grant
  Proposal
• Research and Grants JournalMonthly listing of
  funding opportunities for research, training, and
  service activities in the biomedical and
  behavioral sciences including those from federal
  agencies, state and local governments, voluntary
  health organizations, and foundations. Funding
  opportunities are listed chronologically by
  deadline, then alphabetically by funding agency.
• Word and PDF (Adobe) VersionsThese Word (PC) and
  PDF (Adobe) Versions of the Research and Grants
  Journal contain active e-mail and web links.
• January 2004 Deadlines Word (PC) PDF Listing
  of Funding AgenciesFebruary 2004 Deadlines Word
  (PC) PDF Listing of Funding AgenciesMarch 2004
  Deadlines Word (PC) PDF Listing of Funding
  AgenciesApril 2004 Deadlines Word (PC) PDF
  Listing of Funding AgenciesMay 2004 Deadlines
  Word (PC) PDF Listing of Funding AgenciesJune
  2004 Deadlines Word (PC) PDF Listing of
  Funding AgenciesJuly 2004 Deadlines Word (PC)
  PDF Listing of Funding AgenciesAugust 2004
  Deadlines Word (PC) PDF Listing of Funding
  AgenciesSeptember 2004 Deadlines Word (PC)
  PDF Listing of Funding AgenciesOctober 2004
  Deadlines Word (PC) PDF Listing of Funding
  AgenciesNovember 2004 Deadlines Word (PC) PDF
  Listing of Funding AgenciesDecember 2004
  Deadlines Word (PC) PDF Listing of Funding
  Agencies
• Web VersionTo access Login to Rascal, Columbia
  University's web-based research administration
  system, with your University network ID (UNI) and
  Password. Select Finding Funding, then View
  Research and Grants Journals.

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Faculty ResearchGrants Management
http//www.cumc.columbia.edu/research/grants.htm

• Faculty ResearchGrants Management
• Columbia University
• Columbia University Medical Center's Manual of
  Policies and Procedures
• Research Administration Forms Office of Grants
  Contracts, IACUC, Environmental Health and
  Safety, Radiation Safety, Columbia Innovation
  Enterprise, Office of the Treasurer
  Controller, Purshasing Office
• Administrative Information for Grants Contracts
  Applications
• Information on NIH's Modular Grant Program
• Information on NIH's Non-Competing (Type 5) Grant
  Progress Reports
• Support of Graduate Research Assistants on
  research grants
• Subcontracts Slide presentation on Subcontracts
  and Subawards
• Training Grants Slide presentation on Pre-award
  and Post-Award Management of Training Grants
• Support of Graduate Research Assistants (GRAs) on
  Research Grants
• Slide Presentation
• PDF version of slides
• University Research Policies and Procedures
• Comprehensive Research Funding Information
• Federal Policies and Regulations
• Code of Federal Regulations
• Travel

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BREAK
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COLUMBIA UNIVERSITY PATIENT CARE REVENUE CYCLE
Part 2A

The patient care revenue cycle involves preparing
for a patient encounter, interacting with
patients during a patient encounter, capturing
and recording services rendered and processing
claims and managing a patients financial account
to zero balance resolution.
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COLUMBIA UNIVERSITYPATIENT CARE REVENUE CYCLE
COMPLIANCE BILLING/CODING REVIEW
ENCOUNTER CHARGE CAPTURE/ CODING
FINANCIAL COUNSELING
CLAIM DEVELOPMENT SUBMISSION
CHECK IN / REGISTRATION
PAYMENT POSTING
SCHEDULING/ REFERRAL MANAGEMENT
FOLLOW-UP
32
PATIENT CARE REVENUEINTERSECTION OF PATIENT
CARE AND TEACHING

• Medicare Program
• Began in 1967
• Two trust funds
• Part A for hospital and other facility services
  (eg, nursing home)
• Part B for provider and other outpatient services
• Intermediary Letter (I.L.) 372 Federal
  guidance for teaching providers establishing
  conditions under which providers can teach
  residents (reimbursed under Part A) and provide
  patient care (reimbursed under Part B) at the
  same time.

33
WHO BILLS FOR WHAT?HOSPITAL vs. PROVIDER SERVICES

• Hospital Services (billed by NYPH)
• Inpatient hospitalizations
• Ambulatory surgeries
• Outpatient diagnostic testing (facility,
  supplies, equipment and support staff costs)
• Outpatient physical, occupational and speech
  therapy
• Outpatient clinics (facility, supplies, equipment
  and support staff costs)
• Emergency room services (facility
• Skilled nursing and home health services

• Provider Services (billed by CUMC)
• Daily provider visits and consults to
  hospitalized patients
• Surgeries and administration of anesthesia
• Office visits and office consults
• Office-based diagnostic testing (eg, EKGs)
• Provider interpretation of diagnostic tests
  performed in a hospital
• Provider diagnostic and treatment services for
  patients seen in the hospital outpatient clinic,
  emergency room or skilled nursing facility

Hospital Claim
Provider Claim
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CONTRACT MANAGEMENT

• Objectives
• Provider establishes contracts with their
  significant payers to determine claims
  processing, payment and rejection terms and
  conditions
• This often requires the establishment of rates
  for particular services
• Providers must regularly evaluate the
  reimbursement rates to ensure that they are being
  reimbursed appropriately

35
PROVIDER CREDENTIALING AND RECREDENTIALING

• Objectives
• Evaluate credentials of potential or existing
  providers to ensure that appropriate licenses and
  certifications are accurate and up to date
• Valid state license to practice and prior
  sanctions against licensure
• Education and Training Board Certification
• Drug Enforcement Agency (DEA) Certification
• Verification of clinical privileges
• Malpractice coverage and malpractice history
• National Practitioner Database Query
• Medicare/Medicaid Sanctions
• Application processing for Medicare, Medicaid,
  Blue Cross/Blue Shield, and other insurance
  companies
• Re-credentialing typically occurs ever 2 years at
  CU

36
SCHEDULING/REFERRAL MANAGEMENT

• Objectives of Scheduling/Referral Management
• Appropriately identifying the service to be
  rendered
• Determining a provider who can provide the
  service (based on that persons treatment
  schedule, insurance enrollment status, and
  qualifications)
• Initiating a pre-registration process by
  obtaining a minimum data set of patient
  demographic information
• Communication with patients regarding payment
  expectations and referral requirements
• Columbia Best Practice
• Use IDXtend (institutional billing system) for
  scheduling of appointments
• Collect minimum data set of demographic and
  insurance information for pre-visit insurance
  verification

37
INSURANCE VERIFICATIONA CRITICAL PRACTICE

• Objectives
• Obtaining and verifying coverage prior to
  rendering services
• Minimizing bad debt by contacting the patient
  prior to service to address any problems or
  limitations with coverage
• Improving patient satisfaction by
• Minimizing the amount of time spent registering
  patients on the spot, therefore reducing
  patient wait times and increasing patient
  satisfaction
• Managing patient expectations regarding their
  out-of-pocket obligations

38
INSURANCE VERIFICATION

• Verification of coverage
• Effective date of coverage
• Types of benefits available
• Coverage Limits Yearly/lifetime
• Authorization requirements
• Provider participation status
• Billing address
• Patient responsibility (deductible and/or
  co-payments)
• Types of verification procedures
• Phone call
• Internet
• Electronic system eligibility check (Medicaid)
• Columbia Best Practice Centralized Insurance
  Verification Unit

39
CHECK IN

• Objectives
• Beginning or completing registering of a patient
• Identifying missing information
• Obtaining provider referrals from patient
• Collecting co-payments and deductibles
• Administering Advance Beneficiary Notices (ABNs)
• Administering assignment of benefits
• Provide patient privacy notice

40
FINANCIAL COUNSELING

• Objectives
• Discussing, in advance, how patients will pay for
  their out-of-pocket responsibilities.
• Payment plans
• Discounts based on financial need
• Helping patients work through some
  eligibility/coverage issues in order to ensure
  that the services to be provided are covered
• Pre-existing conditions issues
• COBRA
• Lack of authorization
• Out of network services

41
ENCOUNTER CHARGE CAPTURE/CODING

• Objectives
• Provider must complete charge capture forms for
  each service rendered which includes the
  patients name, medical record number, billing
  account number, identification of procedure codes
  that should describe services rendered and
  diagnosis information that should describe the
  patients diagnosis
• Staff enters charges accurately, timely and to
  the correct account so that services are billed
  and reimbursed appropriately
• Columbia University Best Practice
• 24-48 hours within date of service

42
COMPLIANCE BILLING/CODING REVIEW

• Objectives
• Control mechanism to ensure that billing
  information is supported by documentation in the
  medical record
• Comparing clinician documentation in the medical
  record to the procedure and diagnosis codes
  assigned by the clinicians/coders
• Performed prospectively and retrospectively
• Random selection of certain areas, 100 review in
  other areas

43
CLAIM DEVELOPMENT SUBMISSION

• Objectives
• Scanning data through a series of pre-defined
  edits to identify coding and billing
  discrepancies or missing information that would
  prevent a claim from passing claim edits
• Reviewing and resolving edit reports of claims
  that contain errors.
• Review the lists and resolving any errors.
• Submitting clean claims to third party payers
  for processing
• Reviewing and reconciling clearinghouse reports
  which then forwards electronic claims to
  appropriate third party payers
• Reviewing electronic acknowledgements that claims
  were received
• Columbia Best Practice Department responsibility
  for the weekly evaluation of claim edit reports
  and working claims to get them to pass claim
  edits.

44
PAYMENT POSTING

• Objectives
• Posting of payments to patient accounts after
  payment has been made is vital to ensuring an
  accurate accounts receivable
• Payment is posted timely, accurately, to the
  correct account to reduce A/R follow up
• Payments may include zero payments and the
  posting of a rejection/denial code
• Payments may include self-pay as well as
  insurance payments
• Electronic as well as manual payment posting
  processes
• Posting contractual allowances in concert with
  payments
• Ensure that allowance codes are utilized
  appropriately
• Columbia University Best Practice
• 1-2 days of receipt of payment

45
FOLLOW UP

• Objectives
• In person, phone, and written communication with
  patient, the responsible party", or insurance
  companies regarding unpaid patient account
  balances
• Determination that claim was sent to correct
  insurance company and that it is being processed
• Each claim may have multiple payors - primary and
  secondary insurance companies, patient
• If internal collection efforts fail, the account
  may be outsourced to a collection agency
• Credit balances are resolved by issuing refunds
  to patients and insurance companies

46
REJECTION DENIAL PROCESSING

• Objectives
• Evaluating claims that have been rejected or
  denied.
• Discussions with the clinician that rendered the
  service
• Reviewing billing system claim information to
  determine whether incorrect information was
  entered (either demographic, insurance, procedure
  code or diagnosis information)
• Determining whether appropriate pre-authorization
  was obtained prior to the service being rendered.
  If the service was authorized, was the
  authorization number submitted with the claim
• Rebilling the claim with corrected information or
  contacting the insurance company to resolve or
  appeal the claim.
• Evaluating accounts for potential administrative
  write-offs (e.g. late filing, unauthorized
  service)

47
QUANTIFYING THE OPPORTUNITYEXAMPLE OF DENIAL
DISTRIBUTION BY REASON
Total Denials 1.6M
4
13
20
5
2
By Volume
11
36
9
Registration
Data Collection
Benefit Verification
Related/Included
Coding Related
Provider Enrollment
Claim Issue
Other
Hypothetical example
48
BREAK
49

• Part 2B
• COLUMBIA UNIVERSITY PATIENT CARE REVENUE CYCLE

50
HISTORICAL INFORMATION ABOUT COLUMBIA FACULTY
PRACTICE REVENUE CYCLE

• 575,000 Annual Faculty Practice Outpatient
  Visits 55,000 Inpatient Admissions
• 30 years ago, most CUMC physicians managed
  patient revenue independently and owned the
  economics
• Over time CU departments developed faculty
  practice plans with their own full-time faculty
• Practice plans promoted program collaboration
  across departments
• Clinical revenue generated supports academic
  mission research initiatives
• Up until 1993 departments billed and collected
  on a multitude of billing systems
• In 1993, IDX was installed as the
  enterprise-wide billing system that became a
  common platform for faculty across CU clinical
  departments
• Common billing system more efficiently manages
  revenue cycle in ways such as
• Interfacing with other CUMC information
  technology systems
• Providing shared information for better
  monitoring of managed care contract compliance
• Scrubbing and submitting cleaner claims for
  faster payment turnaround and lower percentage of
  claim denials
• Future IDX enhancements also being developed,
  such as
• Electronic patient eligibility
• Payor contract module
• Web based software version

51
COLUMBIA UNIVERSITYPATIENT CARE REVENUE CYCLE

• Training Internal Control Priorities
• Cash Management
• Credit Balances
• Write -offs
• Charge Capture

52
COLUMBIA UNIVERSITYPATIENT CARE REVENUE CYCLE

• Cash Management
• Use of Lockbox and Electronic Funds Transfer
• Secure Time of Service Cash Receipts
• Timely Deposits and Payment Posting
• Cash Reconciliation Procedures

53
COLUMBIA UNIVERSITYPATIENT CARE REVENUE CYCLE

• Credit Balances
• Work all credit balances within 60 days of
  identification
• (30 Days Best Practice)
• PREVENTION!
• Identify and correct root causes of credit
  balances

54
COLUMBIA UNIVERSITYPATIENT CARE REVENUE CYCLE

• Write-off Policies
• Use standard set of transaction codes for
  administrative, bad debt, small balance
  write-offs
• Ensure that appropriate approval mechanisms are
  in place for management review of account write
  offs

55
COLUMBIA UNIVERSITYPATIENT CARE REVENUE CYCLE

• Charge Capture/Charge Entry
• Ensure timely capture of charges into billing
  system.
• Ensure accurate recording of charges into billing
  system

56
COLUMBIA UNIVERSITYPATIENT CARE REVENUE CYCLE

• Faculty Practice Revenue Management
• Faculty Practice Revenue Management Policies
  Procedures issued Fall 2004
• Website http//www.cumc.columbia.edu/facultypract
  ice/policies/

57
COLUMBIA UNIVERSITYPATIENT CARE REVENUE CYCLE
Charge Payment Payor Mix of Columbia Faculty
Practice Groups on IDX
58
COLUMBIA UNIVERSITYPATIENT CARE REVENUE CYCLE

• Clinical Revenue Improvement Project
• Introduction and Background
• Timeline
• Participants
• Stockamp Consultants

59
COLUMBIA UNIVERSITYPATIENT CARE REVENUE CYCLE

• Clinical Revenue Improvement Project
• Goals
• Create Hub Spoke Responsibility/
  Accountability Model (Culture Change)
• Establish Faculty Oversight Leadership
• Implement a Consistent Set of Efficient Business
  Practices Across All Units
• Maximize Revenue
• Improve Internal Controls
• Improve Employee Satisfaction
• Improve Patient Satisfaction.
• Improve Provider Satisfaction
• Data Driven Management Weekly Monthly

60
COLUMBIA UNIVERSITYPATIENT CARE REVENUE CYCLE

• Clinical Revenue Improvement Project
• Clinical Revenue Office
• Accounts receivable follow-up New approach , New
  Tools Training
• Coordination with CPPN
• Insurance Verification
• Patient Call Center
• Coordination with Departments

61
COLUMBIA UNIVERSITYPATIENT CARE REVENUE CYCLE

• Clinical Revenue Improvement Project
• Department Practice Access Sites Front-End
  Re-Engineering
• Process Redesign
• New Approach New Tools Training
• Securing Patient Visits Before they occur

62
PATIENT REVENUE CYCLE PROCESSESFRONT END
Revenue Cycle Process Process Owner Work Driver / Process Control Job Aids Management Reporting
1 Appointment Scheduling /Registration Department Patient / Physician Phone Call Minimum Data Set Criteria FSC Selection Reference Sheet ONTRAC Exception Report Staff Performance Reviews
2 Insurance Verification CRO ONTRAC Worklist Situation Response Guidelines FSC Selection Reference Sheet Passport ONTRAC Securing Sponsorship Summary IV Ineligible Report Staff Performance Reviews IV Productivity Report
3 Authorization/Pre-Certification/ Referral Department ONTRAC Worklist Situation Response Guidelines FSC Selection Reference Sheet Passport ONTRAC Securing Sponsorship Summary Auth Productivity Report Staff Performance Reviews
4 At Risk Decision Department ONTRAC Worklist Situation Response Guidelines ONTRAC At Risk Decision Report
5 Point of Service Check-in Department ONTRAC Worklist Situation Response Guidelines FSC Selection Reference Sheet Passport ONTRAC Securing Sponsorship Summary Rejection Report Staff Performance Reviews
63
PATIENT REVENUE CYCLE PROCESSESBACK END
Revenue Cycle Process Process Owner Work Driver / Process Control Job Aids Management Reporting
6 Coding and Charge Capture Department Charge Tickets Encounter Forms Charge Lag Reports Staff Performance Reviews
7 Billing Department Charge Tickets IDX Edit List QUIC List TRAC Summary TRAC Billing WIP Report
8 Denial Processing Department and CRO QUIC List, TRAC Worklist, Correspondence Situation Response Guidelines, WebCis, Passport, NeuroNet TRAC Summary TRAC Follow-up WIP Reports Staff Performance Reviews
9 A/R Follow-up CRO TRAC Worklist Situation Response Guidelines, WebCis, Passport, NeuroNet TRAC Summary TRAC Follow-up WIP Reports Staff Performance Reviews
10 Cash Posting Department Remittance Advice Cash Report TRAC Summary Staff Performance Reviews
64
COLUMBIA UNIVERSITYPATIENT CARE REVENUE CYCLE

• Clinical Revenue Improvement Project
• Data Driven Management
• Weekly management meetings
• Faculty Oversight Committee
• Performance standards, metrics and benchmarks

65
Columbia University Revenue Cycle
Key Performance Indicator Dashboard Dec 2004
Feb 2005 CRO (6 Departments)
Indicator Baseline December January February February Goal Goal Variance
Cash Receipts 10,846,767 12,637,130 12,975,524 11,976,046 11,936,309 39,737
A/R Days 112.9 85.4 85.0 85.1 70.0 -15.1
A/R gt 365 Days 31.4 15.1 13.8 14.0 15.0 1.0
Billing WIP 13,340,683 7,202,456 7,300,560 6,623,850 5,878,854 -744,996
Charge Lag Days 18 18 22 20 5 -15
Pre-registration (Min Data Set) N/A 74 80 80 90 -10
Pre-service Secured N/A 78 89 86 92 -6
66
COLUMBIA UNIVERSITYORTHOPAEDIC SURGERY Case
Study

• BEFORE July 2000
• 12 independent physicians, average staff of 3 per
  office, 5 major locations
• Each maintained their own charts, appointment
  protocols, billing fees and office policies
• SINCE July 2000
• Major initiative to centralize all work flow
  processes

67
COLUMBIA UNIVERSITYORTHOPAEDIC SURGERY Case
Study

• Created teams
• Medical records
• Appointment scheduling
• Surgical scheduling
• Secretaries
• Billing and collections
• Front desk reception

68
COLUMBIA UNIVERSITYORTHOPAEDIC SURGERY Case
Study

Physicians were polled as to their preferences and templates were created as to the needs of each physician - how long should a new patient be scheduled for, are x-rays needed first, what types of patients will they see, what insurance plans do they participate in, what equipment is needed in the OR for a surgery. All charts were centralized and a standard chart format established (what is included and where in the chart). There is one chart per patient seen by the group. Secretaries are shared one for each 2 physicians. There is one appointment scheduling phone number created for all physicians. Front Desk Teams (including a front desk biller) are set up at the 5 major locations, where they are trained to collect demographic info, referral forms, HIPPA forms, research questionnaires Billers, upon check-out, collect copays and past due balances and post charges and payments at time of service.






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COLUMBIA UNIVERSITYORTHOPAEDIC SURGERY Case
Study

• Today
• 17 physicians with a centralized staff of 67.
• Higher expenses but revenues increasing even
  faster
• Reduced charge delays and billing rejections
  because of attention to front desk
• Ability to add physicians without adding staff
• Better referrals, no missed phone calls, filing
  up to date
• Maximized use of the operating room

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COLUMBIA UNIVERSITYORTHOPAEDIC SURGERY Case
Study

• TODAY
• A/R is 67 days (vs. CU goal of 70 and actual of
  88 days in September 2004)
• 3 day charge lag (vs. CU goal of 5 days and
  actual of 17 days in September 2004)
• 90 of patients have secured billing information
  before they arrive (vs. CU goal of 92 and actual
  of 73 in September 2004)

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COLUMBIA UNIVERSITY TUITION REVENUE CYCLE
Part 3

The tuition revenue cycle involves a continuum of
activity from student recruitment to
matriculation, including billing and collection.
This includes the student application, interview
and screening process. Tuition rate setting and
financial aid considerations are also key
components.
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COLUMBIA UNIVERSITY TUITION REVENUE CYCLE

Recruitment
Cash
FAS
Inquiry
Application
Collection Cash Financial Aid
Interview
Applications Acceptances Yield
Acceptance Financial Aid
Registration / Billing
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CUMC ADMISSIONS
College of Physicians Surgeons
Mailman School of Public Health
School of Nursing
School of Dental Oral Surgery
Admit Rate (left axis)
Applications (right axis)
LEGEND
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COLUMBIA UNIVERSITY TUITION REVENUE CYCLE

• Tuition Setting Metrics
• Demand / yield
• Student retention
• Economic trends
• Socioeconomic mix of applicant pool
• Availability of financial aid
• Affordability of competition
• Public opinion of quality of education
• Track record of graduates

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COLUMBIA UNIVERSITY TUITION REVENUE CYCLE

• Net Tuition Revenue Example
• Gross Tuition 10,000,000
• Less Institutionally Funded Financial Aid
  3,000,000
• Net Tuition Revenue 7,000,000
• Tuition Discount 30

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COLUMBIA UNIVERSITY TUITION REVENUE CYCLE

• Financial Aid Considerations
• Tuition / Aid
• Low / Low
• High / High
• Need based
• Merit based
• Family / student contribution
• Employer reimbursed tuition
• Competition
• Loan availability
• Net Tuition Revenue

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COLUMBIA UNIVERSITY TUITION REVENUE CYCLE

• CUMC Sources of Student Support
• Total Cost (Tuition, Living, Fees)

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GLOSSARY
Appendix

79
GLOSSARY

• Bad debts Bad debts are amounts considered to be
  uncollectible from accounts and notes receivable
  which were created or acquired in providing
  services. "Accounts receivable" and "notes
  receivable" are designations for claims arising
  from the rendering of services, and are
  collectible in money in the relatively near
  future.
• Charity allowances Charity allowances are
  reductions in charges made by the provider of
  services because of the indigence or medical
  indigence of the patient. Cost of free care
  (uncompensated services) furnished under a
  Hill-Burton obligation are considered as charity
  allowances.
• Coinsurance The amount a patient is required to
  pay for medical care in a fee-for-service plan
  after the patient has met the deductible. The
  coinsurance rate is usually expressed as a
  percentage. For example, if the insurance company
  pays 80 percent of the claim, the patient pays 20
  percent.

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GLOSSARY

• Co-payments are payment sharing amounts that the
  patient is responsible for as a result of the
  coverage the patient has with the insurance
  company. Patient co-payment amount usually are
  applied to each visit and range from 5-20 per
  visit. Patients may also have co-payment amounts
  may also represent a percentage of allowed
  charges
• Courtesy allowances Courtesy allowances indicate
  a reduction in charges in the form of an
  allowance to providers, clergy, members of
  religious orders, and other as approved by the
  governing body of the provider, for services
  received from the provider. Employee fringe
  benefits, such as hospitalization and personnel
  health programs, are not considered to be
  courtesy allowances.
• Covered Expenses Most insurance plans, whether
  they are fee-for-service, HMOs, or PPOs, do not
  pay for all services. Some may not pay for
  prescription drugs. Others may not pay for mental
  health care. Covered services are those medical
  procedures the insurer agrees to pay for. They
  are listed in the policy.

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GLOSSARY

• Deductibles are payment sharing amounts that the
  patient is responsible for. A deductible is
  usually the first X dollars per a specified
  period (usually per year) which the patient is
  responsible for.
• Normal accounting treatment reduction in revenue
  Bad debts, charity, and courtesy allowances
  represent reductions in revenue. The failure to
  collect charges for services rendered does not
  add to the cost of providing the services. Such
  costs have already been incurred in the
  production of the services.
• Preexisting Condition A health problem that
  existed before the date your insurance became
  effective.
• Reasonable and Customary Charges Most insurance
  plans will pay only what they call a reasonable
  and customary fee for a particular service. If
  your doctor charges 1,000 for a hernia repair
  while most doctors in your area charge only 600,
  you will be billed for the 400 difference. This
  is in addition to the deductible and coinsurance
  you would be expected to pay.

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GLOSSARY

• Types of Insurance Coverage
• Indemnity Fee-for Service - This is the
  traditional kind of health care policy. Insurance
  companies pay fees for the services provided to
  the insured people covered by the policy. This
  type of health insurance offers the most choices
  of doctors and hospitals. You can choose any
  doctor you wish and change doctors any time. You
  can go to any hospital in any part of the
  country.
• HMO (Health Maintenance Organization) Prepaid
  health plans. You pay a monthly premium and the
  HMO covers your doctors' visits, hospital stays,
  emergency care, surgery, checkups, lab tests,
  x-rays, and therapy. You must use the doctors and
  hospitals designated by the HMO.
• PPO (Preferred Provider Organization) A
  combination of traditional fee-for-service and an
  HMO. When you use the doctors and hospitals that
  are part of the PPO, you can have a larger part
  of your medical bills covered. You can use other
  doctors, but at a higher cost.

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GLOSSARY

• Medicare
• Medicare is the Federal health insurance program
  for Americans age 65 and older and for certain
  disabled Americans. If you are eligible for
  Social Security or Railroad Retirement benefits
  and are age 65, you and your spouse automatically
  qualify for Medicare.
• Medicare has two parts hospital insurance, known
  as Part A, and supplementary medical insurance,
  known as Part B, which provides payments for
  doctors and related services and supplies ordered
  by the doctor. If you are eligible for Medicare,
  Part A is free, but you must pay a premium for
  Part B.
• Medicaid
• Medicaid provides health care coverage for some
  low-income people who cannot afford it. This
  includes people who are eligible because they are
  aged, blind, or disabled or certain people in
  families with dependent children. Medicaid is a
  Federal program that is operated by the States,
  and each State decides who is eligible and the
  scope of health services offered

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QUESTIONS?
Session 5 Revenue Cycle
85
COURSE EVALUATION

• Please complete course evaluation form.

Session 5
Session 5 Revenue Cycle