Rev Up Your Revenue Cycle Analyzing Operations to Enhance Revenue

1
Rev Up Your Revenue CycleAnalyzing Operations
toEnhance Revenue

• Community HealthCare Association of the Dakotas
• August 15, 2006
• Presented by Rebekah S. Wallace
• CMPE, CPC

2
Agenda

• Measure
• Key Indicators
• Available Benchmarks
• Organize
• Analysis
• Plan Development
• Move
• Motivate
• Implement
• Monitor
• Re-assess

3
Objectives

• Discuss specific key performance indicators
• Review industry benchmarks
• Discuss how to communicate results motivate
  action
• Determine what the numbers mean how to identify
  root causes of problems
• Discuss action plan development ongoing
  assessment

4

• A goal without a plan is just a wish.
• --Antoine de Saint-Exupery

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What are the Goals for Your Health Center?

• Financial Stability
• Customer service focused
• Experience growth
• Expanding services
• Satisfied providers and staff
• Excellent patient care

6
Revenue Cycle

• What is the revenue cycle?
• Begins with appointment scheduling and ends with
  payment resulting in zero balance due
• How do I know if we are doing a good job?
• The numbers dont lie.

7
Measure..Start Here!

• Operational Measures
• Patient satisfaction
• Can be conducted internally or externally
• Conduct prior to making changes to obtain
  baseline data
• Keep questions simple limited (around 5) to
  encourage completion
• Share results with staff do not keep secret!
• Conduct regularly

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Operational Measures

• Patient cycle time Measuring the length of time
  from the patients entry to the patients exit
• Note time patient signs in time patient checks
  out
• If average wait time is unacceptable to clinic,
  study can be expanded to include key stops in the
  cycle

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Operational Measures

• Cycle time vary from specialty to specialty
  medical practices typically range from 30 to 90
  minutes
• Mastering Patient Flow, MGMA

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Patient Cycle Time

• Date
  June 22, 2006
• Appointment Time
  915 a.m.
• Length of Scheduled Appt. Time
  15
• Provider
  Welby
• Key Area
  Time
• Time patient checks in
  903 a.m.
• Time patient was registered
  915 a.m.
• Time clinical staff member received pt. 923
  a.m.
• Time clinical staff member left patient
  940 a.m.
• Time provider came in the room
  1000 a.m.
• Time provider left the room
  1020 a.m.
• Time patient left the exam room
  1020 a.m
• Comments
  
  
  

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Operational Measures

• New Patients
• How many new patients is the Health Center
  acquiring on a monthly basis?
• Factor in determining growth of the center can
  assist in strategic planning

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Operational Measures

• Patient Visits
• Track patient visits by provider by the month
• Fluctuate staffing to cover seasonal daily
  peaks valleys
• Track question if patient volumes decline or do
  not increase as expected

13
Operational Measures

• Time to next available appointment
• Varies by specialty
• Sick patients seek prompt care or they will go
  elsewhere
• Appointment No-Show rate
• Track no show rates by provider on a monthly
  basis
• Best Practices maintain no show rates of less
  than 10

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Operational Measures

• Phone Volume
• The phone is your friend
• Track your phone volumes reasons for calls
• Staff appropriately during peak times . Monday
  mornings!
• Minimize unnecessary phone calls set
  expectations for your patients on prescription
  calls, test results, etc.

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Perfect World Medical Practice Incoming Telephone
Call Log

• Date ___________
• Position Check out receptionist
• 
  Prescription
• Scheduling Referrals Test Results
  Referrals Nurse Other Totals
• 7 to 8..
• 8 to 9..
• 9 to 10
• 10 to 11.
• 11 to 12.
• 12 to 1
• 1 to 2 .
• 2 to 3 .
• 3 to 4 .
• 4 to 5..
• 5 to 6..
• Totals.

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Revenue Cycle

• Revenue Cycle Measures
• Days in Accounts Receivable
• Collection percentages
• Amount of Accounts Receivable outstanding gt120
  days
• Charge posting log
• Denial percentages

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Revenue Cycle Measures

• Days in Accounts Receivable
• Total accounts receivable
• Divided by Gross FFS charges (1/365)
• Best Practice varies by specialty
• Multispecialty, all owners 39.48
• Make the result visual
• Calculate overall by payer

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Key Performance Indicators

• Net Charges to Cash Collections 95-97
• Work with your system
• Separate by payer-mix
• Estimate based on payer-mix number of encounters

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Revenue Cycle Measures

• Percentage of accounts receivable outstanding gt
  120 days
• Median 20
• Best Practice 10
• MGMA Cost Survey 2004

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Revenue Cycle Measures

• Monthly Patient Revenue Collected
• Total dollars collected each month
• Previous six months
• Same month past two years
• Influencing Factors
• Changes in number of encounters
• Changes in payer-mix

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Revenue Cycle Measures
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Revenue Cycle Measures

• Charge Posting Lag lt 2 days
• In clinic should be done at the conclusion of the
  visit
• Offsite within three days of service

23
Revenue Cycle Measures

• Missing Charge Rate lt 1
• of unbilled charges compared to services
  performed
• lt 1 of charges missed on audit
• Missing encounter forms, daily reconciliation of
  encounter forms to schedule

24
Revenue Cycle Measures

• Claim Denial Rate
• Target lt 5 of total claims
• Reduce re-work get paid faster
• What is your denial rate?

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Revenue Cycle Measures

• Bad Debt Rate lt 3-5 of Net Revenues
• Bad debt write-offs divided by net revenues
• Watch improper use of contractual adjustments
• Average bad debt as of self-pay charges 9
  2004 UDS

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Patient Accounting Personnel

• Accounts handled per biller per day (Billing)
• Median 75 (Range 15 to 1,000)
• Accounts handled per day (Collections)
• Median 40 (Range 12 to 125)
• Patient Accounting Support Staff per provider
• Range .65 -.87 FTE per provider FTE
• Manager, coding, charge entry, insurance,
  billing, collections, payment posting, refunds,
  adjustments, cashiering

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Denial Management

• Decide how to correct, critical thinking
• Is the denial something that can be corrected
• If so, what steps should be taken
• Create common denials action spreadsheet
• By Payer
• CPT/HCPCS Code, denial code, action to take
• Accessible on the network to all billers

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Denial Management

• Decide how to correct, critical thinking
• How many duplicate claims does your health center
  submit?
• Busy work, inefficient
• Delays payment (again)

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Proactive Denial Management

• Formal denial analysis
• Use denials to train make operational changes
• Denial analysis spreadsheet or system generated
  reports
• Summary
• Detailed
• Graphic depiction

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Denial Spreadsheet Summary

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Denial Detail Spreadsheet
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Denials by Functional Area
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Financial Measures

• Gain/loss per provider
• RVUs generated by provider
• Staffing ratios
• Patients seen by provider
• Gross charges collections generated by provider
• Clinic Fee Schedule
• Coding utilization

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Financial Measures

• Gain/Loss per provider
• Budget expected
• Understand communicate to provider management
  what will need to be done to achieve target
• Monitor monthly and year-to-date

35
Financial Measures

• RVUs generated by provider
• Relative units of measure that indicate the value
  of health care services and relative difference
  in resources consumed when providing different
  procedures or service
• Standardized, unbiased method of analyzing
  resources involved professional work component
  assigned

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Financial Measures

• RVUs generated by provider
• Can be utilized to benchmark provider
  productivity
• Compensation per total or work RVU
• Expense per RVU
• Etc.

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Financial Measures

• Staffing ratios
• Varies by specialty
• Typically calculated by FTE physician
• Multi-specialty, hospital owned, greater than 50
  primary care physicians
• Best Practice, total support staff per FTE
  physician 4.12

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Staffing Ratios
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Staffing Ratios
40
Staffing Ratios
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Financial Measures

• Patients seen by provider
• Set expectations
• Monitor and communicate
• Compare to national benchmark of peer providers

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Ambulatory Encounters
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Financial Measures

• Gross charges collections generated by
  physician
• Measure communicate monthly
• Set targets
• Compare to industry benchmarks by specialty

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Financial Measures

• Clinic Fee Schedule
• Is there a standardized methodology for
  establishing fees?
• Is every procedure code evaluated in comparison
  to your payer allowable?
• Are you leaving money on the table?

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Fees-Standardized Methodology

• Utilizing RVUs provides consistent, objective
  methodology for health centers to establish fees
• Conversion factors established by Center
• Multiple conversion factors can be established
  for varying sets of CPT codes
• i.e., Evaluation Management codes 99201-99499
  can have a different conversion factor form
  Surgery codes 10021-69990 if desired.

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Fees Standardized Methodology

• Fees can be easily adjusted when Health Center
  updates conversion factor
• Same methodology that some payers are using to
  reimburse you

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Conversion Factor

• number that payers use to convert RVUs into
  reimbursable amount
• number that Health Center can use to convert
  RVUs into fees for services provided
• Medicare conversion factor for 2006 37.8975

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Sample Fee Schedule
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Financial Measures

• Coding Utilization
• Compare individual providers evaluation
  management code utilization to CMS national
  data by specialty
• Display graphically
• Significant variances could indicate under/over
  -coding issues
• Conduct coding documentation review

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E M Coding Utilization Example
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E M Coding Utilization Example
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E M Coding Utilization Example

• Weve Got Issues NOW WHAT?

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• If you have always done it that way, it is
  probably wrong.
• --Charles Kettering

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Organize

• Revenue Cycle Assessment
• Detailed review of processes which impact your
  revenue cycle..
• Scheduling
• Patient Registration
• Pre-Appointment Activities
• Charge Structure Contracting
• Charge Capture
• Billing Accounts Receivable Management
• Patient Collections

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Organize

• Start with no preconceived notions
• Document work flow
• Interview Staff
• Compare actual work to internal policies
• Compare to best practices

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Organize

• Scheduling
• Scheduling templates
• Call volumes
• Walk-ins
• Patient Registration
• Accuracy
• Privacy
• Pre-registration

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Organize

• Pre-Appointment
• Insurance verification
• Check for outstanding balances
• Check for needed updates to financial information
• Pre-appointment calls

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Organize

• Charge Structure Contracting
• Reviewed updated annually
• Charges cover costs
• Contracts pay at or above Medicare FFS
• No specific unaddressed payment issues with
  commercial insurance plans

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Organize

• Charge Capture
• Onsite entered immediately after the patient
  visit before the patient leaves the premises
• Reconciled daily to ensure no lost charges
• Offsite within three business days

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Organize

• Billing Accounts Receivable Management
• Claims out within two days of date of service
• Claim denial rate lt 5
• Duties segmented by payer type
• ( cross trained)

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Organize

• Patient Collections
• Everything possible collected at the time of
  service
• Expectations are established for patients and
  employees
• Onsite financial counseling
• Consequences for nonpayment

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Organization

• Patient Collections Utopia
• 100 collections of all non-insured self-pay or
  sliding fee scale balances for current previous
  visits
• Insured patients co-payments, deductibles
  coinsurance received at the time of service

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Patient Collections

• Largest obstacles to collecting dollars at the
  time of service?
• Staff concerns
• Lack of staff training
• Expectations for patients are not established
• Lack of consequences

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Manage

• Analysis of data gathered during review
• Review all notes, data for each process
• Look for inefficiencies
• Identify gaps
• Get others involved
• Develop solutions for identified issues

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Manage

• Plan Development
• Write down the following
• Description of the change
• Reason for the change
• Potential financial impact of the change (where
  possible)
• Personnel or departments involved
• Prioritize changes easiest to implement most
  financial impact- do first

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Manage Detailed Action Plan Sample
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• Change has a considerable psychological impact
  on the human mind. To the fearful it is
  threatening because it means that things may get
  worse. To the hopeful it is encouraging because
  things may get better. To the confident it is
  inspiring because the challenge exists to make it
  better.
• --King Whitney Jr.

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Motivate

• How do you motivate staff to change?
• Communicate, communicate, communicate
• Goals
• Changes
• Timeliness
• Progress
• Involve staff in change process, incorporate
  their ideas

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Move

• Its not that some people have
• willpower some dont. Its that some
• people are ready to change others
• are not.
• -James Gordon, M.D.

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Move

• Communicate to Motivate
• How the health center needs to change
• Why the health center needs to change
• Current financials
• Health center goals
• Each staff persons role
• Do a formal presentation

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Monitor

• Track selected measures on monthly basis
• Share post results
• Modify plans when necessary

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Celebrate

• Celebrate progress successes
• Sincere thank you will go a long way
• Keep momentum going
• Maintain enthusiasm

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Final Thoughts

• Ongoing Process
• Flexibility is key
• Be open to employee suggestions
• If a first you dont succeed..

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Final Thoughts

• I have not failed. Ive just found
• 10,000 ways that dont work.
• -Thomas Edison

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Questions?

• Rebekah S. Wallace CMPE, CPC
• rwallace_at_bkd.com

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Thank You!

• BKD, LLP
• 901 E. St. Louis Street, Suite 1000
• Springfield, MO 65801-1190
• 417-865-8701
• _at_bkd.com