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When – Or When Not – toOutsource the Revenue Cycle

Michael BernsteinMadison Healthcare AdvisorsProviding Excellence in Financial Solutions

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Reasons for Partnering

• Inability to attract or retain appropriately skilled employees

• High cost of billing and collections

• Declining reimbursements

• Denial management

• Clinical documentation improvement

• Large volume of aged receivables

• Growing number of self-pay accounts

• Consistently not collecting 100% of NPR

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Reasons for Partnering - continued

• Constantly changing payment protocols and processes

• Underutilized or outdated revenue cycle technology

• Lack of migration plan for new systems of system conversions

• Regulatory issues: compliance, Patient Protection and Affordable Care Act, HIPAA 5010, ICD-10

• Consumer expectations: cash pricing and bundled payments

• Improved A/R = Improved operating income

• Hospital versus physician processes

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Common Myths

• Loss of control

• Admitting to failure

• The most important factor is selecting the lowest-priced partner

• Only a few need to make the decision

• Expect a seamless transition

• Specific performance standards are not required

• Termination is an easy process

• The hospital/physician is indemnified against claims

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Extended Business Office

Patient Access Transformation

Health Information Management

Full Revenue Cycle Transformation

Solutions

• Onsite Projects– Cash recovery &

A/R backlog

– Computer Conversions

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Expected Outcomes

• Improving and accelerating cash flow

• Sustainable results – best practices

• Avoid losses from aging receivables

• Reduction in bad debt and charity

• Reduced operating costs

• Access to enhanced technology

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Expected Outcomes - continued

• Access to management and staff with deep domain expertise

• Ongoing training on best practices and regulatory changes

• High-performing employees with incentive-based pay systems

• Staff augmentation solutions

• Elimination of duplicate functions

• Improved customer satisfaction

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Budgeting• Cost accounting• Contract management• Clinical analytics• Physician practice analytics• Key indicators

Revenue Cycle Experts Dedicated to providing solutions that improve financial performance and information management

Scheduling• Appointment

coordination • Medical necessity

validation

Preregistration• Automated

appointment reminders• Eligibility verification• Financial assistance

screening

Registration• Patient check-in/kiosks • Referral authorization

confirmation • Scheduling• Case management

PATIENT

ACCESS

CARE

DELIVERY

HIM• Clinical documentation• Charge capture• Case management• Coding• Transcription

Revenue Quality Management• Contract management• Nurse audit• Over/under payment

detection

BILLING &

COLLECTION• Claims submission• Claims status• Denial management• Payment/remit posting • Lockbox processing• Insurance compliance

• Payment prediction• Automated dialer• Skip tracing• Patient statements/

correspondence

• Customer payment• Document

management/ workflow

DECISION

SUPPORT/

PERFORMANCE

ANALYTICS

Reven

ue

Cycle

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Evaluation Process

• Study what a partnership means to your organization

• Ask yourself, “Is our current process achieving our goals?”

• Understand your data

• COMMUNICATE – Board, executive management, and middle management

• Identify potential partners

• Issue an RFI

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Evaluation Process- continued

• Conduct due diligence

• Don’t expect what you’re not willing to inspect

• Don’t rush the process

• Does the partner fit your organization’s culture?

• Don’t be afraid to succeed

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Performance Indicators

• There is no limit to what you should ask for

• Weight them as you deem appropriate to achieve your goals

• Administer incentives as well as penalties

• Examples:• Cash collections• DNFB• Percent of A/R over 90 days• Compliance• Over-the-counter collections

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Contract Considerations

• Clearly define key performance indicators and scope of work

• Accuracy of metrics is critical

• Clearly delineate number of days that you receive the collections for work in progress at transition

• Incentives and penalties: how much and settlement dates

• Consider your cash requirements when developing the incentive calculation

• Third-party responsibility (i.e., underpayment recovery, silent PPO recovery, denial and appeal recovery)

• Location of outsourced staff

• Collective bargaining considerations

• Whose technology will be utilized?

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Consider…

“What do we have to do today to be ready for an uncertain tomorrow?”

“What futurity do we have to build into our present thinking and doing, what time spans do we have to consider, and how do we use this information to make a rational decision now?”

Peter Drucker

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Questions?