Critical Revenue Cycle Success Strategies In An Era Of
Integrations
Thursday, February 16, 2012
presented by:
Susan E. Ziel, Partner
Krieg DeVault
Catherine M. Weaver
Somerset, CPAsPhil Roberts
Senex Services Corp.P: 317.238.6244
Email: [email protected]
P: 317.472.2230
Email: [email protected]: 317.613.1002
Email: [email protected]
Revenue Cycle and Payer C t tCATHERINE M. WEAVER
Contracts
CMPE, CASC, CHFASOMERSET CPAS, P.C.
Today’s Discussion ‐ OverviewToday s Discussion Overview
Revenue Cycle Collections
Legal Considerations of Collections
Bad Debt – Now What?
Revenue CycleRevenue Cycle
S h d li Scheduling Registration Time of Service Payments
Appointment
Scheduled Time of Service Payments Charge Capture Coding
Patient RegistrationPatient Billed
and Cod g Charge Entry Claims Processing
Charge CapturePatient Pays
Payment Posting A/R Follow UpP ti t C ll ti
Charge Entry and Claim
Fil d
Insurance Payment P ti Patient Collection FiledPosting
Monitor Revenue CycleMonitor Revenue Cycle
Internal StandardsInternal Standards Income statements Balance sheetsBalance sheets Productivity and accounts receivable information Prior operating performance and measures (front Prior operating performance and measures (front office task work ranges)
Monitor Revenue CycleMonitor Revenue Cycle
External StandardsExternal Standards American Medical Association Medical EconomicsMedical Economics Medical Group Management Association Specialty Specific ResourcesSpecialty Specific Resources Market Specific Resources Peer Generated Resources
Payor Contracts – BasicsPayor Contracts Basics
ContractsContracts Edit Reports Denials by type Denials by type Denials by amount Charges, Receipts, Adjustments Days in A/R by Payor
Payor Contracts ‐ EssentialsPayor Contracts Essentials
C f C Copy of Contract Copy of all Exhibits and Addendums Access to Provider Manual List of the PayorsAssociated with the Network
Payment Files and Crosswalksy Your Own Fee Analysis
Contracts ‐ Watch Out ForContracts Watch Out For“The Provider shall not increase its Charges for any C d S i th th t (3%) hCovered Service more than three percent (3%) each contract year. “
Usual and Customary – Whose Usual and Customary?Change to "Provider’s Usual andChange to Provider s Usual and Customary Charges”
Term and Termination - Long period, only at anniversary, only with cause
Try for: With or without cause in 60-90 days
Contracts ‐ Watch Out ForContracts Watch Out For
P ti b i h d b H it l Practices being purchased by a Hospital System ‐ New Tax ID means new contract and reimbursement. and reimbursement.
Carefully analyze the current contract Carefully analyze the current contract reimbursement to the new entity contract reimbursement –We have seen examples of the Independent Practices having negotiated a better paying contract than the Health System’s contractthe Health System s contract.
Consume Driven Health CareConsume Driven Health Care
I R C l d R i Impacts Revenue Cycle and Requires Change
HDHPs & HSAs ‐ What are they?HDHPs & HSAs What are they?
A Health Savings Account (HSA) is a Special Account Owned by an Individual Used to Pay for Current & Future Medical ExpensesCurrent & Future Medical Expenses
HSAs are Typically Used in Conjunction with a “Hi h D d tibl H lth Pl ” (HDHP)“High Deductible Health Plan” (HDHP)
It is Insurance that Does Not Cover First Dollar Medical Expenses (Except for Preventive Care)
Can be an HMO PPO or Indemnity Plan as Long Can be an HMO, PPO or Indemnity Plan, as Long as it Meets the Requirements
HDHPs/HSAs‐How do patients manage?/ p g
W t CWorst Case: Patients Chose for the Low Premium Option They Do Not Fully Fund Their HSA They Avoid Health Care to Avoid Extra Cost They Do Not Actively Participate in Healthcare
Choices & Healthy Lifestyle Choices They Do Not Understand Their Plan
HDHPs & HSAs‐How You ManageHDHPs & HSAs How You Manage
R i Wh P ti t h HDHPRecognize When a Patient has a HDHP
d f h Identify HDHP Names with Your Payors Look for Zero co‐pay on Cards Look for High Deductibles on Cards Ask the Patient When in Doubt, Call the Insurance
Company
HDHPs & HSAs‐How to ManageHDHPs & HSAs How to Manage
Collect at or Prior to the Time Of Service
Staff Should be Pre‐certifying Everything to Determine if Deductible Has Been Met
If the Deductible Has Been Met, Nothing is Due
If the Deductible Has Not Been Met, the Contracted Amount is Payable by the PatientPatient
Your Role with Insurance Your Role with Insurance Carriers
Patients may not understand their plan
Educate yourself and your staff on the plansC i Pl i diff i D C d Certain Plans may require differing DxCodes
Ask Payors to attend monthly staff meetings to educate staffmeetings to educate staff Make it your mission to help the patient understand their responsibilityunderstand their responsibility
ToolsTools
AMA Model Managed Care Contract
MGMA – Practice Perspectives on PayorPerformance
Legal Considerations in the C ll ti PSUSAN E. ZIEL
Collection Process
NURSE ATTORNEY AND PARTNERKRIEG DEVAULT LLP
Bad Debt RequirementsBad Debt Requirements
CFR 8 B d d b i b d b 42 CFR 413.80. Bad debt reimbursed by Medicare but only if:
D b l d i d i d f Debt relates to covered services, derived from deductible/coinsurance amounts
Reasonable collection efforts were made Reasonable collection efforts were made Debt uncollectible when claimed as worthless No likelihood of recovery in futureNo likelihood of recovery in future
Covered ServicesCovered Services
C d i Covered services Medically necessary Prior authorization/certification Fee schedule Exceptions to fee schedule
Reasonable Collection EffortsReasonable Collection Efforts
C bl ff t f M di d ll Comparable efforts for Medicare and all non‐Medicare patients
Issuance of bill post discharge/death to Issuance of bill post‐discharge/death to patient or third party responsible for financial obligationsg
Subsequent billings, collection letters, telephone calls
May include collection agency and court action, as necessary
Documentation required
Collection Efforts (cont.)Collection Efforts (cont.)
S i l S i A Social Security Act 1128A: illegal remuneration to Medicare patients includes waiver of coinsurance/deductible includes waiver of coinsurance/deductible amounts, subject to certain exceptions
1128B(b): illegal remuneration to Medicare 1128B(b): illegal remuneration to Medicare patients
OIG Fraud Alert (1991)( 99 ) Routine waiver of coinsurance and deductible amounts after billing Medicare for full charge represents a false claim
CollectionsCollections
D b d d ll ibl i h l i Debt deemed uncollectible without applying Medicare “reasonable collection efforts” if indigence confirmed and no evidence of indigence confirmed and no evidence of improvement in patient’s financial condition
Indigence/Financial NeedIndigence/Financial Need
Establish before discharge or within reasonable Establish before discharge or within reasonable time before current admission
Determined by provider not patientDetermined by provider, not patient Take into account patient’s total resources Determine no other source legally responsible Determine no other source legally responsible
for bill File documentation : policy, application,
supporting documentation Sliding scale, extended payment, or both
d l f ( ) h Update at least every four (4) months
Patient Agreement to Pay for Services
W i i fi i / Writing to confirm patient/guarantor payment obligations beyond those made in admission paperworkadmission paperwork Scope of services Anticipated fee(s) Anticipated fee(s) Anticipated third party payer payments, if any Patient/guarantor obligations Patient/guarantor obligations Enforceability
B d D bt N Wh t?PHIL ROBERTS
Bad Debt – Now What?
PRESIDENT & CEOSENEX SERVICES CORP.
Bad Debt – Now What?Bad Debt Now What?
Best Practices You Should Expectp FICO Scores for Bad Debt Patients Patient Satisfaction at e t Sat s act o+ Maximized Bottom Line You CanHave Both!You CanHave Both!
Best PracticesBest Practices Expect Patient Stewardship
G dC ll l Good Collections = Patient Retention Tool
Selecting a Good Collection Partner: Healthcare exclusive/focused Compliance – Fair Debt Collection Practices Act, the Fair Credit
Reporting Act (and the FACT Act), the Telephone Consumer Protection Act, the Health Insurance Portability and yAccountability Act (and the HITECHAct), the Graham Leach Bliley Act, and the IRS Dash 2 regulations (for buyers only to comply with issuance of 1099‐C)
Industry –ACA, DBA, HFMA, MGMA Patient Centric – training, principles, pledges, etc.
Bad Debt in PerspectiveBad Debt in Perspective
ACA: Fastest growing segment of bad debt in ACA: Fastest growing segment of bad debt in economy
Trending toward 7 % of hospital revenueg 7 p MGMA: Patient responsible heading for 30% ACA: < 10% recovery average for health care ACA: < 10% recovery average for health care
bad debt Most providers don’t have good insight into their ost p o de s do t a e good s g t to t e
own performance —measures, benchmarks, data
Bad Debt in PerspectiveBad Debt in Perspective
30 00%
35.00%
15.00%
20.00%
25.00%
30.00%
0.00%
5.00%
10.00%
326 351 376 401 426 451 476 501 526 551 576 601 626 651 676 701 726 751 776 801 No
In today’s economy, at 365 Days 99% of Bad Debt
326‐
350
351‐
375
376‐
400
401‐
425
426‐
450
451‐
475
476‐
500
501‐
525
526‐
550
551‐
575
576‐
600
601‐
625
626‐
650
651‐
675
676‐
700
701‐
725
726‐
750
751‐
775
776‐
800
801‐
825
NoHits
FICO Scores
Patients will NOT qualify for mortgage
Today, Bad Debt Really MattersToday, Bad Debt Really Matters
Avg. hospital net profit: 1‐3 % Low margin, high volume business We’re not utility companies – no cancelsy p $100 K in new recovery = $5 M in revenue @ 2 %
margin Today, CFO measured on bottom line Increased recovery = increased profit ! y p
DriversDrivers
Mergers, integration Revenue enhancement and/or cost reduction Create working capital/boost cash on handg p Create more predictable cash flow Bank or bond refinancingg Streamline vendors and collection process Quick recapture for merging physiciansQuick recapture for merging physicians
Understanding Bad Debt SaleUnderstanding Bad Debt Sale Recover A/R sooner, simpler, and more
Same file format as collection firm
Same ability to recall, manage accounts, “control”
P id i id h fil i l d l “ i h ” Provider is paid when file is placed, plus “gain share”
Buyer takes risk: non‐recourse
Boost collections or replace traditional collections Boost collections or replace traditional collections
Enhance overall recovery
One‐time transaction to boost days cash on cashOne time transaction to boost days cash on cash
Industry estimates of 750‐1,000 hospitals selling
Program: 2ndary Sweep UpProgram: 2 Sweep Up Sell old, inactive balances #365 days to 5 5 yr old accounts #365 days to 5.5‐yr‐old accounts $10,000,000 annual bad debt placement
X .90 percent unrecovered9 p= $9 M X 5 years = $45 millionX .0075 = $337,500
Equivalent to hospital revenue $17 M in revenue @ 2 % marging
Program: 2ndary “Booster”Program: 2 Booster Call back placements @ 365 days
Sell monthly
Boost net recovery by 1‐3 percent (12‐13% ++)
d l d h Paid at placement and/or “gain share”
$10 M placement over 12 months X .0075 = $75,000
Equivalent to hospital revenue $3 75 M in revenue @ 2 % Equivalent to hospital revenue $3.75 M in revenue @ 2 % margin
Most don’t have a 2ndary program ‐ you should!Most don t have a 2 program you should!
Understanding Bad Debt SaleUnderstanding Bad Debt Sale CMS 2008 Joint Signature Memorandum “Clarification of Medicare Bad Debt Policy/Bad Debt Policy Related to Accounts at a Collection A ”Agency”
Subsequent Recovery Reconcile on following report Top hospitals sell regularly without affecting
C R iCost Reporting
Questions for the PanelCatherine M. Weaver, Somerset CPA
PH: 317. 472‐2230
Email: [email protected]
Susan E. Ziel, Krieg DeVault Law
PH: 317.566.1110
l l kdl lEmail: [email protected]
Phil Roberts Senex Services CorpPhil Roberts, Senex Services Corp.
PH: 317.613.1002
Email: robertspt@senexco comEmail: [email protected]
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