Achieving Revenue Cycle ExcellenceTo Prepare for Health Reform

Jim Morrison, VP and General ManagerRevenue Cycle Solutions, McKesson

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Agenda

Healthcare Reform: The Environment

Provider Impact

Enhancing Payer Relations

Reimbursement Management

Driving out Cost

Case Studies in High Performance

Summary and Q/A

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Healthcare Reform:The Environment

Healthcare reform legislation set things moving.

The next steps are less clear …

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Audience Survey

Which of the areas listed below is your organization most prepared to address?

A. Accountable care/shared savings strategy

B. Value-based purchasing

C. Readmissions and hospital-acquired conditions

D. Bundled payments

E. Strategy to address newly insured patient populations

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HFMA ANI 2011 Conference Survey

Bundled payments

Accountable care/shared savings strategy

Strategy to address newly insured patient populations

Value-based purchasing

Readmissions and hospital-acquired conditions

1%

6%

6%

12%

16%

Percent Indicating "Very Prepared" To Address

Sample size = 84

Please indicate your organization’s preparedness to address the areas listed below.

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Four Building Blocks of ACOs

► Leverage evidence based decisions in delivering programmatic care

► Support integrated/holistic approach to managing patients across the continuum of care

► Support integrated workflow in managing cost/quality

Care Management

► Manage multiple payment models at the POC including traditional FFS

► Leverage analytics to define/ support care bundles and prepare for bundled payments

► Tools to manage contracts and payment distribution logic

Payment Mechanics

► Actively engage patients in their care process► Provide patients with access to their pertinent

information► Enable care coordination and connectivity► Enable a range of personal health management

and health information tools

Connectivity, Engagement, Medical Home

PCMH ACO

► Stratify populations for management.► Identity opportunities to manage cost and

quality► Report and act up care gaps► Understand and optimize provider performance► Support internal/external reporting demands

Analytics

ACO Strategic Competencies

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Payment Mechanics

Connectivity, Engagement, Medical Home

Connectivity► Interoperability► Data Exchange► Care Coordination Communication► Messaging ► Notifications► Results► Referrals / Orders

Engagement► PHR► Multi Modal Comm.► Education► Online Programs► Decision Support► Marketing

Transformational Services

Financial Management► Eligibility► Medical Necessity► Auto-authorization

Payment Mechanics► Contract Repository► Medical Policy► Payment Policy► Distribution Logic

Analytics

Performance Analytics► Operational Efficiency► Service Line Analysis► Cost Trend Population Analytics► ID & Stratification► Care Gaps► Intervention Outreach

Network Analytics► Cost & Quality► PMPM Spend► Efficiency Profiles► Attribution Logic► Benchmarking► Incentive ModelingOutcomes Reporting► HEDIS. NQF, PQRI, IQR

Care Management

Holistic Management►UM / DM / CM►ID & Stratification►Medical Necessity►Decision Support►Readmission Mgmt.

EBM► Assessments► Care Plans► Care Guidelines► Education► Campaign Mgmt

PCMH ACO

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Bundled PaymentRequired Capabilities

Efficiency Profiles

Episode RegistrationEvidenced-Based

Guidelines

Distribution Logic

Care Management Tools

Analytics Engine

Clinical& ClaimsData

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Bundles PaymentsSuccess Requirements

Analytics

• Operational analytics to identify service line opportunities

• Network analytics to determine and track provider efficiency in support of bundled contracts

• Analytics to track associated claims activity

Advanced Tools

• Utilization management tools to reduce variation in resources supporting bundled payment

• Integrated analysis of operational & network performance against contracts

• Care management tools to ensure integrity of bundle

• Tools to register and trigger bundle

• Payment distribution logic

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Healthcare ReformWhat’s Next?

The world will include a mixed environment: Capitation/fee for service, risk sharing

The world will be a heterogeneous one: Medical homes, legacy systems and significant investments, clinics, labs, doctors’ offices, unique payer relationships, unique employer relationships, consumer driven healthcare, regulatory reform, analytics to drive down cost, population management, increased demands and shrinking reimbursement … all coming by 2014

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Healthcare ReformWhat’s Next?

Population Management

• Analytics supporting the ID and risk-adjusted stratification of a population of patients

• Integrated analysis of clinical and claims data

• Tools to intervene to address gaps in care

• Reporting tools to define and report on metrics

• Profiling tools to assess provider efficiency and optimize performance

Changes in Care Settings

• Hospitals expanding footprint to non-traditional settings

• Connectivity between all care settings – clinical & financial – is essential

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Agenda

Healthcare Reform: The Environment

Provider Impact

Enhancing Payer Relations

Reimbursement Management

Driving out Cost

Case Studies in High Performance

Summary and Q/A

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Provider ImpactThe Changing Landscape

Reduced Reimbursement

• Fee-for-service payments cut

• Commercial payers driving to Medicare levels

Payment Reform & Evolution

• Pay for performance

• Bundled payments

• Capitation• Shared savings

Quality Improvement

• Pay for performance

• Public reporting measures

• Meaningful use• Enterprise care

management

ICD-10 Transition

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Agenda

Healthcare Reform: The Environment

Provider Impact

Enhancing Payer Relations

Reimbursement Management

Driving out Cost

Case Studies in High Performance

Summary and Q/A

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Audience Survey

Are you talking with any of your payers about how the health reform changes will affect your relationship?

A. Yes, we’re meeting regularly

B. Yes, we’re in the early stages of discussion

C. No, but we have plans to meet

D. No, with no plans to meet

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Enhancing Payer Relations

• Holistic view of the patient• Match clinical & claims data• Reduce administrative costs with

automation• Regular educational updates from payers

Collaboration & Information

Sharing

• 5010 allows more information sharing between provider and payer

• Cleaner claims results in fewer denials • Collaborate with your payers on contract

reviews prior to ICD-10 transition

5010 & ICD-10 Transition

Advantages

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Agenda

Healthcare Reform: The Environment

Provider Impact

Enhancing Payer Relations

Reimbursement Management

Driving out Cost

Case Studies in High Performance

Summary and Q/A

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Reimbursement ManagementComplexities and Mechanics

Contracting and Understanding Cost

Analytics to understand performance

Provider-based Physicians

•Single source to track and manage patients

•Historical view of payments

Disparate information management systems

•Acute and Ambulatory billing integration

•Case Management/Length of stay control

•Medicare 72-hour window•Underpayment management

• Cost of care, quality of care, spend per-member per-patient

• Provider efficiency• Benchmarking & Incentive Modeling

• Reporting to regulatory bodies

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Agenda

Healthcare Reform: The Environment

Provider Impact

Enhancing Payer Relations

Reimbursement Management

Driving out Cost

Case Studies in High Performance

Summary and Q/A

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Driving Out CostsStrategies and Opportunities

Big focus on clinical IT comes from ARRA

Strengthen your revenue cycle processes by using your IT system to the full extent

─ Process flow improvements

─ Organizational changes and improvements

─ Technology plan to improve results

Optimize to drive to the best practice for each area

Reduce total cost of ownership for IT

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Audience Survey

What process do you use today to confirm patient identity?

A. Photo ID

B. Photo ID and insurance card

C. Biometrics

D. Other

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Driving Out Costs Patient Identification Management

Medical Identity Theft is one of the fastest growing crimes in the U.S.

An estimated 1.4 million adults, approximately 5.8% of the U.S population, were victims of medical identity theft in 2009.

Biometrics identity confirmation can ensure the right patient receives the right care

* According to the National Survey on Medical Identity Theft prepared by Ponemon Institute in 2010

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Agenda

Healthcare Reform: The Environment

Provider Impact

Enhancing Payer Relations

Reimbursement Management

Driving out Cost

Case Studies in High Performance

Summary and Q/A

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Audience Survey

What are your current net accounts receivable days?

.A 40 days

B. 41 – 45 days

C. 46 – 50 days

D. 51 – 55 days

.E 56 days

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Case Study Mississippi Baptist Health System

Staff education on IT and processes

HIS table updates to align with best practices

Process improvement for point of service collectionsKey Statistics and Accomplishments

Net Cash collection increase of $10,237,193

Denial write-offs decreased by 45%

Point of Service cash collections increased by 15%

A/R days decreased from 36 to 34 (well below HFMA target)

Failed claims decreased by 24%

Adjustments decreased by 1.37%

Staff HIS education test results improved from 59% to 87%

550 licensed beds. Project statistics run from November 2009 - December 2010.

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Audience Survey

What is your average time for patient registration to be completed?

.A 10 minutes

B. 11-15 minutes

.C 16 minutes

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Case Study Spartanburg Regional Medical Center

Streamlined insurance master tables

Established electronic remittance advice for each payer

Standardized graphical user interface for registration staff

Key Statistics and Accomplishments

Decreased A/R days by 8 days

Record breaking cash collections – more than $30M

Reduced unbilled accounts from $58 million to $30 million

Reduced failed claims by $6M

Increased admission speed 30% and improved admissions accuracy 50%

Three facilities included: Spartanburg Hospital: 568 licensed beds; Village Hospital: 48 licensed beds; Restorative Care: 84 licensed beds

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Agenda

Healthcare Reform: The Environment

Provider Impact

Enhancing Payer Relations

Reimbursement Management

Driving out Cost

Case Studies in High Performance

Summary and Q/A

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Connectivity & Engagement

► Interoperability with identity management

► Patient communication► Engagement Model

Analytics / Data Aggregation

► Performance evaluation► Population analysis► Network analysis► Outcomes reporting

Care Management

► Cross-continuum, patient centric care plan

► Quality and Evidence► Holistic disease management

Financial Management

► Eligibility► Payment mechanics► Disbursement Management

Financial Management

►Eligibility►Payment mechanics►Disbursement Management

Analytics / Data Aggregation

►Performance evaluation►Population analysis►Network analysis►Outcomes reporting

Care Management

►Cross-continuum, patient centric care plan

►Quality and Evidence►Holistic disease

management

What’s Next?Managing Populations and Risk Under Health Reform

Connectivity & Engagement

►Interoperability with identity management

►Patient communication►Engagement Model

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What’s Next?Managing Populations and Risk Under Health Reform

Connectivity & Engagement

► Interoperability with identity management

► Patient communication► Engagement Model

Analytics / Data Aggregation

► Performance evaluation► Population analysis► Network analysis► Outcomes reporting

Care Management

► Cross-continuum, patient centric care plan

► Quality and Evidence► Holistic disease management

Financial Management

► Eligibility► Payment mechanics► Disbursement Management

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Extra Resources

sites.mckesson.com/AchieveHIT/reform.asp

More Information on Revenue Cycle Management

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Questions