Best Practices in HME: FINANCIAL BENCHMARKING - PowerPoint PPT Presentation

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Best Practices in HME: FINANCIAL BENCHMARKING

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... Co-insurance collection Collection aggression DENIAL RATES INDUSTRY AVERAGE = 26% Rehab +15% = 41% O2 -8% = 18% DME +2% = 28% SAME CONTRIBUTING ... – PowerPoint PPT presentation

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Title: Best Practices in HME: FINANCIAL BENCHMARKING


1
Best Practices in HME FINANCIALBENCHMARKING
2
DSO (Days Sales Outstanding)
  • Net revenue for period / days in period daily
    net revenue
  • Net A/R balance last day of period / daily net
    revenue DSO
  • XYX Supply Co. 1/1/08-6/30/08
  • Net Revenue 7,525,000
  • Net A/R Balance 6/30/08 2,135,000

3
DSO (Days Sales Outstanding)
  • 1/1/08 thru 6/30/08 182 days
  • 7,525,000 / 182 41,346.15 (daily net revenue)
  • 2,135,000 / 41,346.15 51.64 DSO
  • INDUSTRY AVERAGE MID - HIGH 80s
  • TARGET MID 40S MID 50S

4
A/R AGING AVERAGES
  • A/R reporting buckets
  • Typical Current, 30-60, 60-90, 90-120 and over
    120 days
  • Target averages
  • Current 35-40 30-60 25-30
  • 60-90 15-20 90-120 10-15
  • Over 120 days 5-10

5
A/R AGING AVERAGES
  • CONTRIBUTING FACTORS TO BUCKET CREEP
  • Intake accuracy
  • Insurance verification / eligibility
  • Documentation
  • Electronic vs. paper billing
  • Co-insurance collection
  • Collection aggression

6
DENIAL RATES
  • INDUSTRY AVERAGE 26
  • Rehab 15 41
  • O2 -8 18
  • DME 2 28
  • SAME CONTRIBUTING FACTORS AS BUCKET CREEP

7
CLAIM PROCESSING ERRORS
  • Most Recent CERT (Comprehensive Error Rate
    Testing) Period Ending 9/30/2007 8.2
  • Region A 5.9
  • Region B 5.3
  • Region C 10.0 (PGBA 12.3 Cigna 7.7)
  • Region D 11.6

8
DOC TURNAROUND
  • FAXING OK AS OF 9/27/2002
  • http//www.cms.hhs.gov/transmittals/downloads/R30P
    I.pdf
  • Document tickler file
  • Computerized / Manual
  • EVERY 2 TO 3 BUSINESS DAYS
  • Best Practice DAILY
  • Social Security Act - Section 1842(p)(4) MANDATES
    physician compliance with your paperwork. But.

9
CLAIM SUBMISSION
  • Depends on company size
  • MINIMUM 3X WEEKLY
  • Best Practice - DAILY
  • YEILDS
  • Earlier detection of transmission errors
  • Smoother cash flow
  • Greater recurring rental frequency

10
COLLECTION AGGRESSION
  • Dates below are based on SUBMISSION DATES
  • Frequency to work outstanding balances
  • Medicare (EMC) 21 Days
  • Commercial Paper 45 Days
  • Commercial (EMC) 30 Days
  • Private Pay 30 Days
  • Private Pay 1099C

11
HME BILLING STAFF
  • Rides with gross revenue product selection /
    claim volume
  • 1 biller for every 500,000 to 750,000
  • 80/20 BILLERS RULE
  • 20 time spent banging keys
  • 80 time spent working A/R
  • OTHER RESPONSIBILITIES?
  • Customer service, retail, inventory

12
(No Transcript)
13
ABN Advance Beneficiary Notice of Non-Coverage
  • New ABN mandatory 3/1/09
  • 3 main uses of the ABN
  • LOL Limitation on Liability
  • Medical Necessity
  • Upgrades
  • more expensive, deluxe or excess features the
    physician did NOT order
  • Waiving Medicare benefits
  • Now OPTION 2
  • http//www.cms.hhs.gov/BNI/02_ABNGABNL.asp

14
BRUCE BROTHIS
  • Allegient Billing Consulting, Inc.
  • bbrothis_at_allegientbilling.com
  • HME Services of ABC
  • outsource billing
  • HME consulting
  • Compliance audits
  • A/R clean-up assistance
  • Accreditation Preparation
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