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Pt Access, AR and Effective

CASHFlow Management (aka Revenue Cycle 201)

Revenue Cycle Revolution

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WHAT IS “AR”

AR is defined in numerous waysWhat will your staff understand that will help with ownership?Number of days from final billed to payment in full (at all) = complete AR ownershipNumber of days from discharge to PIF = shared ownership with HIM

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Definition of Terms

Admitting-Central Registration-Patient AccessScheduling – central scheduling- each dept does their ownCharge capture – the process of the revenue generating departments marking charge tickets or order entry.Health Information Management/HIM – medical recordsBusiness Office – Patient Financial Services-Pt AccountingHold days - # of days hold before dropping off the computer (usually 3-5 after d/c. Need to wait 72 hours for all Medicare accounts for non-CAHs.)

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More definition of terms

Lost charges –sent to the floor, never charged for; charted, never chargedLate charges – claims dropped off IT, then charges submitted. Cost of both – if identified, adjusted bills sent to the payers.Patient receive 2 statements –from payers and facility.

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Understanding Reimbursement

Remittances –payment document from the payersWhat type of payment arrangements are hospitals experiencing thru contracting as well as federal and state mandated:

Prospective payment systems – payment based on something besides charges: Diagnosis, CPT codes, care plans. (EX: Medicare PPS: Inpt/DRG; Outpt/APC)Fee for service – payment based on chargesPer Diem – payment based on a per day rateCapitation – payment based on covered lives, per member, per monthCritical Access hospitals - %billed chrgs/out; per diem/in

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Different types of Reimbrsmnt

Inpatient: Diagnostic Related Groups/DRGUses Dx, procedures where an end coder groups into payment categories (1 payment/1 stay)Outpatient: Ambulatory Payment Classification/APC (Each CPT could be paid)

Uses CPT and HCPC codes to group clinically andfinancially related codes into APC payment groupsSkilled Nursing facilities – Resource Related Group (a # of days = 1 RUG payment)Home Health – Home Health Related Groupers (1 HHRG $ for each 60 day care plan)

What are the Key elements that create bad debt?

Internal silos –lack of information sharing, handoffs not occurring, no cross training, lack of ownership with each dept, poor internal systems, ltd ongoing training of error education, more w/less, technology limitations, turnover..and more

External demands – changing market (less liability/less travel), less elective procedures, gainfully employed uninsured, poor economy/gas or pay unsecured healthcare bills, new payer market (more Part C), complicated contracts, repeat denials/appeals…and more

SO..always doing what we have always done = the same old outcome. Time to start fresh.

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What are some Key elements to Reduce Bad Debt

Exposure?Identify our new self pay patient. With insurance/large balance; Employed without insurance; unemployed without insurance.Create an environment of communication – early, during and after the encounterCreate clarity on expectations Create clarity in ownership of each step within the revenue cycle –with accountabilityCreate tracking and trending/TNT throughout the pre, during and after the visit—and ACT to change when patterns are identified.

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Defining Our New Patient in the Revenue Cycle

Unemployed with no insurance

Employed with no insurance

Employed with high deductible and high coinsurance

Employed with historical insurance

Insert into each box:1)How pre-admission will be handled2)Pt portion assessment3)Financial assistance options4)Timely follow up

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Key owners within the Revenue cycle

Pre-admission – financial counseling, scheduled admissions, verification

Admission – verify all information/update

Charge capture/entry – depts understand chrgs are due day of or day after.

HIM – hold days are for coding-not charge entry

Billing – submits a clean claim from HIS

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More Key Indicators

Insurance follow up = insurance resolution. Days to pay by payer, 30 days pay

Remittance monitoring – aggressively pursue denials, develop tracking system/per payer

Patient Financial Counseling – prior to scheduled procedure; verify benefits, financial statements/planning; financing options; well defined credit policy; charity policy understood

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Redesign Revenue Cycle Opportunities - WIN

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Better Practice Performance Indicators (David Hammer, HFMA Revenue Cycle conference)

High inpt/outpt hold days

3-4 days hold

High unbilled > than hold

2 days of revenue > bill hold days

Excessive AR greater than 90 days

No more than 15-20% in over 90 days

More than 6% bad debt write offs as fraction of gross revenue

BD write off less than 5.25% of gross revenue; charity 2.3% (HARA 2012)

Collection agency recoveries >15%

Agency recoveries from 6-10%

Excessive denials-$,# Denials less than 5% of net revenue

Poor customer service Few customer complaints

Elective surgeries-no preadmission

Pre-registered and financial counseling

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Focus on a few Key Indicators-then drill down

(Day’s top 5)Establish Ave daily cash –compare to ave daily expenses, difference = margin

Create internal tracking tool, post $ against goal. Research special cause variation.VISUAL

Denials –both turn around days and % of net revenue

Define denial vs rejection; research and resolve ‘root cause’; track by payer/reason

Insurance days to pay, per payer – threshold of 30 days + aging analysis, per payer

Research all reasons for ‘more than 30 days to pay”, resolve-either with payer or internal; analyze ea aging cat, focus 30-60

Registration errors – focused review with 100% accuracy on content

Create training teams with BAR; review key elements of focused registrations; train and train more

AR Days – gross vs net, national standard 60 gross days

Understand current AR counting tool, explore coding impact; use HIPAA to move money, reduce denials, increase productivity

So let’s take a look at some

cool ideas to reduce bad debt

exposure

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Making the commitment to PRE

Establishing standards with multiple processes-individual pt needs addressedEligibility verification with benefits understood (HIPAA 270)Complete authorization (coordinate with physician’s office and internal clinical staff)Schedule pre-admission financial visit (coordinate with clinical pre-admission visit. Handoffs!)Identify potential for payment.Use of a financial statement or similar tool. Use in conjunction with a credit policy-that is the beginning, not the ending pointCreate multiple time pay plans to meet individual pt needs.W/insurance – estimate pt portion, monitor for insurance payment, activate payment plan when insurance is received.

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Attention to Preadmission

Why isn’t every hospital doing the basics of pre-admission? Verify benefits, authorizations, preparing estimates for procedures, discussing payment plans for self pay portion including potential charity, beginning the excellent patient experience early in their healthcare encounter.“No FTEs”; “Can’t do estimates”; “Administration won’t support it “; “No space for a financial pre-admission program.”

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Idea: Service Line Deposits

Preadmission – scheduled surgeries, procedures, high dollar outpt areasCreate a dollar threshold that is tied to each type of scheduled environmentEX) $400 Ortho outpt

$500 Cath lab; $150 Endo• Incorporated into the pre-

admission dialogue –with or without insurance.

If employed physicians, coordinate the service line deposit to include the professional component. Split the 1 payment between both based on average charges. (EX: hospital 60%, physician 40%)Staff must be trained as financial counselors –even if the registration staff is completing the above work.

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Idea: Train thru scripting –PRE and POS

Registrars must be trained on a) how to ask for money, ABNs, form completion, etc, b) how to put the pt at ease thru the process, c) how to spot potential problems and d) how to communicate all the above.Scripting- which is the written dialogue of how to do the above items – is the key to long term success.Practice, practice, practice

“Thank you for choosing ABC hospital for your upcoming GI procedure (or today.) To help reduce financial surprises, we have reviewed your BC benefits and have found that there is an unmet self pay portion due from your deductible of $850 plus your plan is a 70/30 plan which means you will owe 30% after the deductible is met. Outpt balances are due in 90 days with a deposit today of $150 but if you are going to need assistance I would be happy to schedule an appt with the financial counselor of the hospital.” Lots of variations

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Hospital ideas

Paro scoring used extensively with self pay patients. (Karla Carter, Dir PFS, MVRMC/St Luke’s, TF, Id)

98% of all scheduled services will be fully secured prior to the patient arrival. (Providence Health System, ANI 2008, Teresa Spaulding, Adm, Ore)

Research all denials for authorizations and incorporate into PRE standards. (Judy Veazie, consultant)

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More Pre-admission ideas

OB classes – examples of pt claims (mom and baby) with estimates (well baby, C/S, vaginal delivery), information on financial assistance, unique coverage issues for the area, payment plan options

Surgery Scheduler – outline key elements needed to begin the pre-authorization, eligibility and pt contact steps. Eliminate rework of calling the office, patient, etc to get the initial information.

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Looking at Point of Service

With an aggressive Pre-admission program, only direct admits, low dollar outpt and ER will be ‘unknown’. Set the expectation of Payment…

Dear Valued Patient lettersPosted signs on payment due at time of service –with assistance if necessaryTrain registration staff on standards, scriptingCreate service line deposit. (EX $100 MRI)

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More Point of Service Ideas

Are you ready to provide the pt a bill at discharge? What needs changed to be able to do this or an estimate?How is late activity tracked and trended? How are hold days in HIM evaluated and trended? Can you do an estimate of amt due with insurance interface? (real time adjudication)

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Next Steps in the AR Adventure-TRACK N TREND (TNT)

Review remittancesTrack denials by payer, by volume, by reasonTrack delays – by reason: records, etc.Review late charges/lost chargesTrack by deptEducate and reduce

Review opportunities from RAs, billing rejections, manual changes to UB/1500All manual changes need eliminated/greatly reduced=compliance and labor intensive

Identify internal ‘next steps’ to attain 5 key indicators – then keep going!

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More Next Steps

Look at individual areas: Admitting, HIM, billing, ins resolution and collection. Then create measurements for each areaFinally, roll out HIPAA transaction sets to find the three wins

EX of area specific standards:# of days to code = 3-5 within the hold days. Track by reason, by physician delays beyond. Also # of days paper records: floor to HIM, to prep, to code.# of days to submit a clean claim= 0. Track all manual interventions with delays.# of days to submit to 2nd payer after primary=1. Determine manual vs electronic, use HIPAA 837

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And don’t forget the patient!

Not the biggest cash impact but biggest staff time; biggest long term successAt point of initial service, establish-

Positive impressionBig White Hat –here to help!Establish a communication channel Set expectation of payment –with financing plansDear Valued Patient letter

Dear Valued Letter Sample

Every registration, every timeDear Valued Pt- Thank you for allowing ABC hospital to serve your health care needs. To eliminate financial surprises, below is pertinent information related to your visit.

If you provide current insurance, we will be happy to bill it on your behalf as there are specific codes that are required for accurate and timely billing to your payer.

You will receive bills from other providers. (List them)

All balances are due within 90 days from date of service. If you will have problems meeting that requirement, please call our financial counselors 1-800-333-3333 for financial assistance.

Are you a Medicare patient? Any oral medications given in an outpt setting are not billable to Medicare as hospitals are not covered under the Part D benefit. Ask us if you have questions.

Again, thanks for allowing us to service you.

Signed: Director PFS or similar leader

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Common questions in AR management

Q: What % of the pt portion balance would you expect as a standard payment?A: Tough as each pt will need their financial ‘ability to pay’ reviewed thru the use of a financial statement.

Using credit policy as the guide, determine the pt’s ability to resolve the balance within credit policy.If they cannot, begin the process to determine what their ability is to pay the balance.Identify expenses vs disposable income left to pay the balance. Identify expenses that could be reduced or that may be paid off soon – adjust payment to reflect new disposable income as it becomes available.Utilize the financial assistance policy to determine if additional reductions can be made on the balance. Sliding scale, partial reductions, etc.

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More fun questions

Q: When does the value of the balance drop?

A: Historical information has shown that the balance looses value after it is 90 days old. Usually drops to $.10 on the dollar.

Hey, why are some providers/facilities waiting until 90 days to begin working on the acct? Huge opportunity to reduce bad debt and improve patient satisfaction thru reducing their unplanned financial surprises thru Pre-Admission, estimates, eligibility verification, and financial discussions prior to any procedure or immediately post ER visit.Most patient’s pay because they feel we care…not because we have a hammer

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Post Encounter Ideas

Timeline for ongoing, rapid insurance resolution.Timeline for ongoing follow up to patient/family on the outstanding balance.Use skip tracing/similar information on addresses

Family billing for the entire history vs pt specific

Use matrix concept: will pay, could pay, won’t pay= different efforts, letters, etc.Different efforts on different balances. (EX: $250 = 1 call, 1ltr; $500 =2 calls, 2 ltrs)

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Revenue and Reimbursement Boot Camp 31

What to Outsource?

StatementsFollow-up – Early outPhone contact & payment arrangements

Overflow arrangements for phone answering

Charity screeningApplications for Public AssistanceLonger term financingAll self pay collection activities from Day 1

Revenue and Reimbursement Boot Camp 32

How to Outsource?

Fee for service arrangementCommission on collections as they are made

Incentives for quicker collection or improved collections

Get the cash nowSell the Bad DebtSell all Self Pay A/R

Bad debt ideas

Pre-collect letter – from hospital’s legal counsel or collection agency. “One last chance”Paro/credit scoring used in conjunction with collection agency work.Require skip tracing to be done by agency

Develop a collection agency report card

Includes % rate, with legal separatedIncludes pt complaintsIncludes onsite visitsIncludes reports with historical patternsIncludes any accounts that were turned with insurance pendingIncludes required incomplete information

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Resources to ‘get it right’ (Providence Health Services)Zillow.com /property eval=freeCounty websites/property eval=freeAccurint.com/property/address/skip=cost

• USPS.com/address = free• Online credit

bureau/financial eval=cost

• MySpace.com/skip tracing = free

Free address and phone #-including reverse directories

Anywho.comThephonebook.comYahoo.comSwitchboard.comAddresses.comGo411.com (candian)

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Better practice ideas to

explore….Summary.

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Admitting Quality Program

Do you audit for accuracy?What is the criteria to know it is right or are the blanks just filled in?

What type of error education is occurring?

Evaluate the value ofauditing all pt types or audit high risk areas.EX) ER night shift, ER weekends = high risk areas. Rotate out of these isolated shifts infrequently.

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Better practice ideas

Verify benefits/demographics = Pre and again post 90 days, prior to turning to collection (Providence, Ore)Run all self pay thru Medicaid eligibility –prior to charity, prior to turning to bad debt. Actively involve nursing/scheduling with identifying potential problems – OB, procedures, case mgt, etc.

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More better practice ideas

Service line deposits in all areas: a) pre/scheduled, b) point of service/outpt, ER with consistent credit policy standards but flexible as necessary.Scoring on ‘collectability’ prior to performing collection activitiesPre-collect letters prior to collection agency full referrals (MVRMC)Refer to Budget Counselors as an alternative (Veazie)

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Denial prevention- Tracking and Trending

Using the Remittance Advice + input from employees + patient concerns and complaints = identify patterns.

Denial tracking and trending is about preventing, not monitoring.Change the process. (Ex: Medicaid Name & #. Aggressively audit all pre-registered plus day of service registrations. Implement 270/automated eligibility for all registrations.)

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Ideas to audit

Days to pay per payer, per typeManual edits to claims from the main frame-who and whyCharity policy implementationSign off authority for write offsReason for ‘hold’ in HIM beyond computer generated/mandated hold daysDenial or partial payment patterns from RAs

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Focus on Patient FriendlyHFMA’s Project Recommendations

Customer Service StandardAdvance Information to PatientsMeasure SuccessPatient Friendly Billing GuidelinesCoordination Information Gathering Simplify Contractual RelationshipsConsolidate BillingStandardize Written Communication

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More Patient Friendly Ideas

Use Understandable TerminologyRethink: ‘This is not a bill.’Bill Patient After Insurance Has PaidConcise Financial CommunicationUnderstandable CDMProvide On-Line Capabilitieswww.patientfriendlybilling.org

Technology Ideas

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Technology Ideas

Computer integrated/bolt on pt and/or insurance payment ‘estimator.’Excel with high volume procedure priced and integrated into letter to send to pts.Review Agency reports for patternsHIPAA standard transactionsEliminate manual interventions –with scrubber, main IT system fixes

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Revenue Cycle Impact of HIPAA

HUGE WINS thru complete rolloutEliminate/reduce denialsMove money more rapidlyIncrease productivity of staffRedesign business process

Now let’s discover how… baby steps…

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HIPAA Tx & Code Sets impacts:

All health plans (Medicare, Medicaid, BC, BS, employer-sponsored group health plans and other insurers companies, and networks: except WC and liabilities)

All providers (physicians, hospitals, and others) who conduct any of the HIPAA transactions electronically.

PURPOSE: To create a single standard for claims, eligibility verification, referral authorization, claims status, remittance and other transactions.

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HIPAA: The EDI Standards

Transaction Standards:Eligibility: ASC X12N40101A 270/271

Referral & authorization: ASC X12N40101A 278

Claims: ASC X12N40101A 837Institutional (837I)Professional (837P)Dental (837D)

Claim Status: ASC X12N40101A 276/277

Payment & remittance: ASC X12N40101A 835

Enrollment/disenrollment: ASC X12N40101A 834

Premium payment: ASC X12N40101A 820

First report of injury & Claims attachment - forthcoming

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HIPAA TRANSACTIONS FLOW

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Effective Denial Management

Prevention is the key!Starts in Pre-admissionPrevent denied claimsOk, we got the denial. Now what?Get other involved.. Beyond the back end of the AR team!

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Top Ten Reasons for Denial

Coordination of benefits 25%Patient not eligible 15%No authorization 15%Medical Record requested 11%Untimely filing 11%Additional info pending 9%Non-covered Service 7%Benefits expired 6%Billing Errors 1%Contract Review .3%

SOURCE: Navigating Payment Pitfalls – Healthcare Financial Mgt.

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Of the Top Ten – Eight Addressed

Type of Denial HIPAA TxCoordination of Benefits 270Patient not Eligible 270Non-covered service 270Benefits Expired 270No authorization 278Medical Records requested 276Additional Info Pending 276Billing Errors 837

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Impact to the AR

Pre-Admission – Move it up front (278,270)

Eligibility- Prevent Denials (278, 270)

Registration areas (“)Billing (837)

Insurance follow up (276)

Patient collections (271, 276, 835)

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Work team: Insurance Resolution

Objective: develop 276/277 process

Team: billing rep, IT analyst, Sup/Mgr BO, PFS Director

What needs done:How many days to payEstablish threshold for f/upAnalyze days by payerPayer history: high maintenance vs easy/rapidDevelop plan for high maintenance f/up

Develop Response Matrix

How are the payers utilizing the response codes?Timeframe for responses?

Timelines to complete each phase: Start / finish

Evolving process

CELEBRATE THE BABY STEP WINS

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AR Systems’ Contact Info

Day Egusquiza, PresidentAR Systems, IncBox 2521Twin Falls, Id 83303208 423 9036daylee1@mindspring.comwww.arsystemsdayegusquiza.com

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