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Improving Revenue Cycle Outcome: Harnessing the Power of Process Analytics and Automated WorkflowApril 17, 2015
Agenda
Introductions
Baseline definitions
Why these solutions are important
Process analytic concepts
Automated workflow concepts
Using BPM as competitive advantage
Applying business rules to drive higher performance
Evolution of revenue cycle
Q&A
2
Introductions
© 2015 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 339426
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With us today
Over 20 years healthcare experience
Focuses on Revenue Cycle Redesign, Capital Budgeting and Planning, Vendor Selection and Implementation, and Operational Efficiency and Cost Reduction
Works with community health organizations, large integrated providers, and academic medical centers
Phillip BrooksDirectorKPMG LLP
Baseline definitions
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Baseline: Definitions
Workflow: repeatable patterns of activity that involve a system of resources, roles, knowledgeable worker interaction, and information flow
Automated Workflow: a collection of methods and tools used to document, improve, and monitor business processes as defined by standard workflows
Process Analytics: the ability to access data about individual instances of a process and use that data to monitor, analyze, and improve an organization’s critical operational processes
Business Process Management (BPM): the combination of Automated Workflow solutions that are specifically designed for revenue cycle operations and incorporate Process Analytic concepts to create an interactive system that can automatically prioritize high-value tasks to the right people to improve efficiency and drive down costs
Why these solutions are important
© 2015 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 339426
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Why these solutions are important
Have you driven 20 percent of costs out of your revenue cycle over the past five years?
Have you improved net revenue annually?
Have you reduced your headcount by 10 percent?
Have you improved processing times by 50 percent?
If you answered “no” to any of the above questions,you likely need to think about implementing an
automated workflow approach.
Do you need an automated workflow?
© 2015 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 339426
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Evolve your revenue cycle into revenue cycle 3.0
RC 1.0 RC 2.0 RC 3.0
Traditional assessments,Recommendations, and
options andImplementation
Due to a change inorganizational focus orchange in personnel, benefits erode over time.
Automated workflowdesign and deployment
Automated workflow allowsfor repeatable, quicker-paced,
and sustainableImprovements, even
when personnel changes, since workflow is hardcoded.
Automated workflowwith process enabled
analytics
Allows for deeper penetrationinto root cause issues andenables automated workflowto perform continuous
monitoring of micro-processesthat contribute to delays inprocessing bills, delays incash flow, loss of revenue,and increase costs.
Using BPM as competitive advantage
© 2015 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 339426
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Using BPM as a competitive advantage: Transformation through automation
Business Process Management is not just about managing a defined basket of work activities faster or more efficiently. It is also about improving results.
What can BPM do?
Identify Highest value accounts for follow-up and push them up the queue
Route POS Collections efforts for prescreening by financial clearance staff
Help speed/standardize medical eligibility status processes and tasks
Identify root causes of identified anomalies
Display how a single problem manifests and interrelates across entire revenue cycle ecosystem
Process analytic concepts
© 2015 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 339426
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Business need to combine data from multiple systems
Requirement to compare historical and current comparative analysis to understand improvement strategies
Need to make real-time proactive decisions and move away from reactive actions
Must find ways to mitigate revenue at risk
Need to view consolidated revenue cycle operations
Process analytic concepts: Why the need?
© 2015 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 339426
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Process analytic concepts: Benefits of using data analytics
Financial Improvement
Root cause analysis of denied claims to reduce at source
Rapid identification of daily productivity performance to take
appropriate actions
Simplify presentation of actionable management
information allowing for faster decision making
Quickly understand process outcomes to make adjustments
Consolidation of data from multiple sources to provide quality scorecards for staff
Job/staff outcomes trending to monitor work outcomes
© 2015 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 339426
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Process analytic concepts: Case study #1
Cash goals in the first year of implementationOutpace
Denial and underpayment processing by working active issues in an automated, timely manner
Improve
Future denials through root cause analysis and process improvement
Reduce
Support the centralized business office strategy while also redeploying associates to high-value roles
Equip
Sco
reca
rd
Overview
A not-for-profit integrated healthcare system comprising of 12 hospitals whose net patient revenue is $3.7 billion with total system discharges of 172k.
Problem
Decentralized business offices that did not take advantage of system wide standards and economies of scale. Disparate patient accounting systems.
Automated workflow concepts
© 2015 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 339426
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Automated workflow concepts
BPM is a collection of methods and tools used to document, improve, and monitor revenue cycle processes.
1
2
3
4
5 The processes are monitored to ensure improved outcomes are achieved.
Automation is introduced into the processes wherever possible.
The processes are streamlined through reengineering to fill gaps and eliminate bottlenecks.
The revenue cycle processes are simulated in order to identify gaps.
Revenue cycle processes are modeled to document current state.
=
A B
D
=
E
C
A B C
An undefined, inconsistent, and over-complicated process...
A simplified, consistent, and streamlined process.
BECOMES
Unnecessary steps and task variability are reduced while efficiencies are gained and financial outcomes are improved.
The Process The Result
© 2015 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 339426
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Automated workflow concepts (continued)
BPM is used to identify bottlenecks, delays, loopbacks, and insufficientresourcing, then improve efficiency and effectiveness through streamlining activities.
Process bottlenecks are delays and activities that cost an excessive amount of money and/or time.
Delays occur because there is insufficient notification that one activity is finished so that the next one can start.
A process with loopbacks has bad process design: processes should always move forward in time and control.
Insufficient available resource pools to execute an activity can cause a process to be drawn out, costing time and money.
© 2015 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 339426
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Automated workflow concepts: Additional benefits
According to Info-Tech Research Group, Over 80% of organizations saw clear benefits as a result of automated workflow implementation.
Reliability: Processes are repeatable, automated, and more streamlined, which helps reduce variability.
Profitability: Aligning RC activities closely with high-value outcomes may positively impact the bottom line, including increased net revenue and ROI.
Improved efficiency: Identifying the next highest value activity for maximum value in a repeatable processes contributes to smoother operations.
Predictability: More projects and tasks will be completed on time with a reduced cost model.
Increased productivity and efficiency: Higher request resolution means that end users have what they need to do their jobs.
Adaptability: Increased flexibility, scalability, to react to changes in the industry.
© 2015 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 339426
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Effective BPM consists of a five-step lifecycle to maximize outcomes
1. Modeling
Revenue cycle processes are modeled to document current state.
2. Simulation
The revenue cycle processes are simulated in order to identify process gaps.
3. Streamlining
The processes are streamlined through reengineering to fill gaps and help eliminate bottlenecks.
4. Automation
Automation is introduced into the processes wherever possible.
5. Management
The processes are monitored through process analysis, alerting management when changes are needed and ensuring improved outcomes.
Applying business rules to drive higher performance
© 2015 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 339426
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Applying business rules to drive higher performance: case study #2
Overview
A not-for-profit integrated health system with an academic medical center comprising of 7 hospitals whose net patient revenue is $2.3 billion with total system discharges of 108k.
Problem
Lack of technology. Manual processes were inefficient and days in AR were not improving. Operational teams were not making headway against organizational goals.
Sco
reca
rd
Three year risk-adjusted ROI of 435%Outpace
Account representative productivity and patient satisfaction – cost to collect
Improve
Future denials through root cause analysis and process improvement
Reduce
Providing a single source of truth with data to make better management decisions
Equip
Evolution of revenue cycle
© 2015 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 339426
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Evolution of the revenue cycle
Loosely Managed
Localized Silo Management
Localized Revenue Cycle Management
Enterprise Revenue Cycle Management
“Systems Thinking” (ToC) and Connected Efficiency and value-driven Big data and guided discovery Net Revenue and actual cost combination
1980 (DRGs) 1990 (APCs) 2000 2010 (ACOs) Today
Highly manual/paper based Charge based blended with
cost + reimbursement
Emergence of “Rev Cycle” vs. Dept focus Denial Management becomes a discipline Get paid the maximum appropriate Net Revenue, cash flow, and overall cost mgmt
RC departments managed independently Improvement initiatives didn’t fully consider
total impact Primarily Cash Flow focus
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What should you do next?
Build appropriate business case to support BPM deployment
Gain insight into revenue cycle processes and drive significant benefits
Evaluate automated workflow capabilities in your current environment
Evaluate Process Analytic capabilities
© 2015 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 339426
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In summary
New Business Models
At KPMG, we believe that health plans, providers, and life sciences companies should be thinking beyond transformation and focus more on healthcare “convergence” and the broader implications of operating in a more collaborative and integrated U.S. healthcare delivery model. While transformation of current operations is likely going to be a business requirement, the real question for forward-looking organizations is what role they plan to play in a new and more converged health system.
Questions?
© 2015 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 339426
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Contact information
Phillip Brooks, Director, Advisory
KPMG LLP330-329-1269
Thank You
Restriction on Disclosure and Use of Data – This document contains confidential or proprietary information of KPMG LLP, the disclosure of which would provide a competitive advantage to others; therefore, the recipient shall not disclose, use, or duplicate this document, in whole or in part, for any purpose other than the recipient’s consideration of KPMG LLP’s services.
© 2015 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 339426