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Rev Up Your Revenue CycleAnalyzing Operations toEnhance RevenueCommunity HealthCare Association of the Dakotas
August 15, 2006
Presented by Rebekah S. Wallace
CMPE, CPC
Agenda
Measure Key Indicators Available Benchmarks
Organize Analysis Plan Development
Move Motivate Implement
Monitor Re-assess
Objectives
Discuss specific key performance indicators Review industry benchmarks Discuss how to communicate results &
motivate action Determine what the numbers mean & how to
identify root causes of problems Discuss action plan development & ongoing
assessment
“A goal without a plan is just a wish.”
--Antoine de Saint-Exupery
What are the Goals for Your Health Center? Financial Stability Customer service focused Experience growth Expanding services Satisfied providers and staff Excellent patient care
Revenue Cycle
What is the revenue cycle? Begins with appointment scheduling and ends
with payment resulting in zero balance due How do I know if we are doing a good job? The numbers don’t lie….
Measure…..Start Here!
Operational Measures Patient satisfaction
Can be conducted internally or externally Conduct prior to making changes to obtain
baseline data Keep questions simple & limited (around 5) to
encourage completion Share results with staff – do not keep secret! Conduct regularly
Operational Measures
Patient cycle time – Measuring the length of time from the patient’s entry to the patient’s exit Note time patient signs in & time patient
checks out If average wait time is unacceptable to clinic,
study can be expanded to include key stops in the cycle
Operational Measures
Cycle time vary from specialty to specialty – medical practices typically range from 30 to 90 minutes
• Mastering Patient Flow, MGMA
Patient Cycle Time
Date: June 22, 2006Appointment Time: 9:15 a.m.Length of Scheduled Appt. Time: 15Provider: Welby
Key Area Time1. Time patient checks in 9:03 a.m.2. Time patient was registered 9:15 a.m.3. Time clinical staff member received pt. 9:23 a.m.4. Time clinical staff member left patient 9:40 a.m.5. Time provider came in the room 10:00 a.m.6. Time provider left the room 10:20 a.m.7. Time patient left the exam room 10:20 a.mComments
Operational Measures
New Patients How many new patients is the Health Center
acquiring on a monthly basis? Factor in determining growth of the center &
can assist in strategic planning
Operational Measures
Patient Visits Track patient visits by provider by the month Fluctuate staffing to cover seasonal & daily
peaks & valleys Track & question if patient volumes decline or
do not increase as expected
Operational Measures
Time to next available appointment Varies by specialty Sick patients seek prompt care or they will go
elsewhere Appointment No-Show rate
Track no show rates by provider on a monthly basis
Best Practices maintain no show rates of less than 10%
Operational Measures
Phone Volume The phone is your friend Track your phone volumes & reasons for calls Staff appropriately during peak times ….
Monday mornings! Minimize unnecessary phone calls – set
expectations for your patients on prescription calls, test results, etc.
Perfect World Medical Practice Incoming Telephone Call LogDate: ___________Position: Check out receptionist
Prescription Scheduling Referrals Test Results Referrals Nurse Other Totals7 to 8………………………………………………………………………………..8 to 9………………………………………………………………………………..9 to 10………………………………………………………………………………10 to 11…………………………………………………………………………….11 to 12…………………………………………………………………………….12 to 1………………………………………………………………………………1 to 2 ……………………………………………………………………………….2 to 3 ……………………………………………………………………………….3 to 4 ……………………………………………………………………………….4 to 5………………………………………………………………………………..5 to 6………………………………………………………………………………..Totals……………………………………………………………………………….
Revenue Cycle
Revenue Cycle Measures Days in Accounts Receivable Collection percentages
Amount of Accounts Receivable outstanding >120 days
Charge posting log Denial percentages
Revenue Cycle Measures
Days in Accounts Receivable Total accounts receivable
Divided by Gross FFS charges * (1/365) Best Practice varies by specialty
• Multispecialty, all owners 39.48 Make the result visual Calculate overall & by payer
Key Performance Indicators
Net Charges to Cash Collections: 95-97% Work with your system Separate by payer-mix Estimate based on payer-mix & number of
encounters
Revenue Cycle Measures
Percentage of accounts receivable outstanding > 120 days Median 20% * Best Practice 10%*
*MGMA Cost Survey 2004
Revenue Cycle Measures
Monthly Patient Revenue Collected Total dollars collected each month
• Previous six months• Same month past two years
Influencing Factors• Changes in number of encounters• Changes in payer-mix
Revenue Cycle Measures
Total Patient Revenue Collected
$0.00
$100,000.00
$200,000.00
$300,000.00
$400,000.00
$500,000.00
$600,000.00
April-05 May-05 June-05 July-05 August-05 September-05 September-04 September-03
Series1
Revenue Cycle Measures
Charge Posting Lag: < 2 days In clinic should be done at the conclusion of
the visit Offsite – within three days of service
Revenue Cycle Measures
Missing Charge Rate: < 1% % of unbilled charges compared to services
performed < 1% of charges missed on audit Missing encounter forms, daily reconciliation
of encounter forms to schedule
Revenue Cycle Measures
Claim Denial Rate Target = < 5% of total claims Reduce re-work & get paid faster What is your denial rate?
Revenue Cycle Measures
Bad Debt Rate: < 3-5% of Net Revenues Bad debt write-offs divided by net revenues Watch improper use of contractual
adjustments Average bad debt as % of self-pay charges =
9% 2004 UDS
Patient Accounting Personnel
Accounts handled per biller per day (Billing) Median = 75 (Range 15 to 1,000)
Accounts handled per day (Collections) Median = 40 (Range 12 to 125)
Patient Accounting Support Staff per provider Range = .65 -.87 FTE per provider FTE Manager, coding, charge entry, insurance,
billing, collections, payment posting, refunds, adjustments, cashiering
Denial Management
Decide how to correct, critical thinking Is the denial something that can be corrected If so, what steps should be taken
Create “common denials” & action spreadsheet By Payer CPT/HCPCS Code, denial code, action to take Accessible on the network to all billers
Denial Management
Decide how to correct, critical thinking How many duplicate claims does your health
center submit?• Busy work, inefficient• Delays payment (again)
Proactive Denial Management
Formal denial analysis Use denials to train & make operational
changes Denial analysis spreadsheet or system
generated reports• Summary• Detailed• Graphic depiction
Denial Spreadsheet Summary
Payer Clinic RA Date # DenialsTotal
Claims% Total
Denials
Medicare Part B 7/22/2005 0 8 0.00%
Select Benefit Administrators 7/15/2005 1 1 100.00%
Medicare Part A 7/25/2005 0 1 0.00%
Medicare Part A 7/14/2005 0 18 0.00%
Medicare Part A 7/20/2005 3 19 15.79%
Medicare Part A 7/6/2005 0 102 0.00%
Medicare Part B Iowa 7/1/2005 14 67 20.90%
Totals 18 216 8.33%
Denial Detail Spreadsheet
Type of DenialSample
# ANSI Percent Description of Denial
Billing 95 18 29.40% Duplicate Claim/Service
Billing 35 29 10.80% Time limit for filing has expired.
Registration 25 24 7.70%Payment for charges adjusted. Charges are
covered
under capitation agreement/managed care
plan.
Denials by Functional Area
59.50%
27.80%
7.20%
5.50%
Billing
Registration
Other
Clinical
Financial Measures
Gain/loss per provider RVUs generated by provider Staffing ratios Patients seen by provider Gross charges & collections generated by
provider Clinic Fee Schedule Coding utilization
Financial Measures
Gain/Loss per provider Budget expected Understand & communicate to provider &
management what will need to be done to achieve target
Monitor monthly and year-to-date
Financial Measures
RVUs generated by provider Relative units of measure that indicate the
value of health care services and relative difference in resources consumed when providing different procedures or service
Standardized, unbiased method of analyzing resources involved & professional work component assigned
Financial Measures
RVUs generated by provider Can be utilized to benchmark provider
productivity Compensation per total or work RVU Expense per RVU Etc.
Financial Measures
Staffing ratios Varies by specialty Typically calculated by FTE physician
• Multi-specialty, hospital owned, greater than 50% primary care physicians
− Best Practice, total support staff per FTE physician = 4.12
Staffing Ratios
Category Medical Group Management
Per FTE Physician Association
General Administrative - Admin. Assistants, Chief Officers, 0.25 per 1 FTE Physician
directors, site managers, human resources & marketing staff
Patient Accounting Support Staff - Business Office manager, 0.72 per 1 FTE Physician
insurance, billing, credit, cashiering, collections, charge entry staff
General Accounting Support Staff - accounting, bookkeeping 0.08 per 1 FTE Physician
& accounting data input staff
Staffing Ratios
Category Medical Group Management
Per FTE Physician Association
Information Technology - data processing, computer 0.11 per 1 FTE Physician
programming & telecommunications staff
Housekeeping, Maintenance, Security - 0.14 per 1 FTE Physician
housekeeping, maintenance & security staff
Medical / Receptionists - medical receptionists, switchboard 1.16 per 1 FTE Physician
operators, schedulers, & appointment staff
Staffing Ratios
Category Medical Group Management
Per FTE Physician Association
Medical Records - 0.31 per 1 FTE Physician
medical records, coding & x-ray film library staff
Clinical Support Staff - registered nurses, licensed practical 1.49 per 1 FTE Physician
nurses, medical assistants & nurses aides.
Total employed support staff 4.94 per 1 FTE Physician
Financial Measures
Patients seen by provider Set expectations Monitor and communicate Compare to national benchmark of peer
providers
Ambulatory Encounters
25th Percentile 50th Percentile 75th Percentile
Family Practitioner 3,265 4,185 5,088
Pediatrician 3,549 4,476 5,511
Nurse Practitioner 2,351 2,992 3,740
Physician Assistant 2,814 3,297 4,543
Pediatric Nurse Practitioner 1,633 2,730 3,641
OB/GYN General 2,102 2,892 3,794
• MGMA 2005 Physician Compensation & Production Survey
Financial Measures
Gross charges & collections generated by physician Measure & communicate monthly Set targets Compare to industry benchmarks by specialty
Financial Measures
Clinic Fee Schedule Is there a standardized methodology for
establishing fees? Is every procedure code evaluated in
comparison to your payer allowable? Are you leaving money on the table?
Fees-Standardized Methodology
Utilizing RVUs provides consistent, objective methodology for health centers to establish fees
Conversion factors established by Center Multiple conversion factors can be
established for varying sets of CPT codes i.e., Evaluation & Management codes 99201-99499 can
have a different conversion factor form Surgery codes 10021-69990 if desired.
Fees –Standardized Methodology
Fees can be easily adjusted when Health Center updates conversion factor
Same methodology that some payers are using to reimburse you
Conversion Factor
$ number that payers use to convert RVUs into reimbursable amount
$ number that Health Center can use to convert RVUs into fees for services provided
Medicare conversion factor for 2006 = $37.8975
Sample Fee Schedule
Conversion Factor = $63.00
Sample Sample Sample Sample
Code: Description: RVU StandardMedicare
Part Insurance Insurance
Fee
B Allowa
bleCompany
ACompany
B
99202 Office/ Outpatient Visit 1.72 108.36 60.57 107.50 99.76
99203 Office/Outpatient Visit 2.56 161.28 90.13 160.00 148.48
99222 Initial Hospital Care 2.98 187.74 107.79 186.25 172.84
99231 Follow up 0.90 56.70 32.52 58.25 52.20
Hospital Care
Financial Measures
Coding Utilization Compare individual providers evaluation &
management code utilization to CMS & national data by specialty
Display graphically Significant variances could indicate under/over
-coding issues Conduct coding & documentation review
E & M Coding Utilization Example
New Patient Evaluation & Management Visits
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
45.00%
50.00%
Provider Data
CMS Data
MGMA Data
Provider Data 0.00% 24.48% 33.85% 36.98% 4.69%
CMS Data 2.65% 20.46% 42.89% 27.11% 6.87%
MGMA Data 8.50% 38.46% 40.31% 10.96% 1.77%
99201 99202 99203 99204 99205
E & M Coding Utilization Example
Established Patient Evaluation & Management Code Utilization
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
Provider Data
CMS Data
MGMA Data
Provider Data 0.62% 28.11% 45.83% 25.06% 0.37%
CMS Data 3.99% 8.37% 59.55% 25.59% 2.48%
MGMA Data 2.01% 17.44% 66.07% 13.45% 1.03%
99211 99212 99213 99214 99215
E & M Coding Utilization Example
We’ve Got Issues… NOW WHAT?
“If you have always done it that way, it is probably wrong.”
--Charles Kettering
Organize
Revenue Cycle Assessment Detailed review of processes which impact
your revenue cycle…..• Scheduling• Patient Registration• Pre-Appointment Activities• Charge Structure & Contracting• Charge Capture• Billing & Accounts Receivable Management• Patient Collections
Organize
Start with no preconceived notions Document work flow Interview Staff Compare actual work to internal policies Compare to “best practices”
Organize
Scheduling Scheduling templates Call volumes Walk-ins
Patient Registration Accuracy Privacy Pre-registration
Organize
Pre-Appointment Insurance verification Check for outstanding balances Check for needed updates to financial
information Pre-appointment calls
Organize
Charge Structure & Contracting Reviewed & updated annually Charges cover costs Contracts pay at or above Medicare FFS No specific unaddressed payment issues with
commercial insurance plans
Organize
Charge Capture Onsite: entered immediately after the patient
visit – before the patient leaves the premises Reconciled daily to ensure no lost charges Offsite: within three business days
Organize
Billing & Accounts Receivable Management Claims out within two days of date of service Claim denial rate < 5% Duties segmented by payer type
(& cross trained)
Organize
Patient Collections Everything possible collected at the time of
service Expectations are established for patients and
employees Onsite financial counseling Consequences for nonpayment
Organization
Patient Collections “Utopia” 100% collections of all non-insured self-pay or
sliding fee scale balances for current & previous visits
Insured patient’s co-payments, deductibles & coinsurance received at the time of service
Patient Collections
Largest obstacles to collecting dollars at the time of service? Staff concerns Lack of staff training Expectations for patients are not established Lack of consequences
Manage
Analysis of data gathered during review Review all notes, data for each process Look for inefficiencies Identify gaps Get others involved Develop solutions for identified issues
Manage
Plan Development Write down the following
• Description of the change• Reason for the change• Potential financial impact of the change (where
possible)• Personnel or departments involved
Prioritize changes – easiest to implement & most financial impact- do first
ManageDetailed Action Plan Sample
Action: Start: End: Person:
1Better communication TOS payment
expectation
1.1 Review credit & collection policies 5/1/2005 5/15/2005 Jane
1.2 Develop written payment policy
1.21Prepare list of key elements for payment
policy 5/15/2005 Bill
1.22 Draft text of policy 5/20/2005 Bill
1.23 Review by CFO 5/21/2005 Jane
1.24 Present to Board for Approval 6/14/2005 Jane
1.25Train registration/intake personnel - new
policy 6/20/2005 Lynn
1.26Begin requiring all new patients to sign as
part 7/1/2005 Lynn
of registration; existing patients to sign at next
visit
“Change has a considerable psychological impact on the human mind. To the fearful it is threatening because it means that things may get worse. To the hopeful it is encouraging because things may get better. To the confident it is inspiring because the challenge exists to make it better.”
--King Whitney Jr.
Motivate
How do you motivate staff to change? Communicate, communicate, communicate
• Goals• Changes• Timeliness• Progress
Involve staff in change process, incorporate their ideas
Move
“It’s not that some people have
willpower & some don’t. It’s that some
people are ready to change & others
are not.”
-James Gordon, M.D.
Move
Communicate to Motivate How the health center needs to change Why the health center needs to change Current financials Health center goals Each staff person’s role Do a formal presentation
Monitor
Track selected measures on monthly basis
Share & post results
Modify plans when necessary
Celebrate
Celebrate progress & successes
Sincere thank you will go a long way
Keep momentum going
Maintain enthusiasm
Final Thoughts
Ongoing Process
Flexibility is key
Be open to employee suggestions
If a first you don’t succeed……..
Final Thoughts
“I have not failed. I’ve just found
10,000 ways that don’t work.”
-Thomas Edison
Questions?
Rebekah S. Wallace CMPE, CPC
rwallace@bkd.com
Thank You!
BKD, LLP
901 E. St. Louis Street, Suite 1000
Springfield, MO 65801-1190
417-865-8701
@bkd.com
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