FLEX CAH Financial Improvement Collaborative 12-11-2012 Sponsored by Florida ORH & Hometown Health

FLEX CAH Financial Improvement Collaborative12-11-2012

Sponsored by Florida ORH & Hometown Health

Florida CAH Financial Improvement Collaborative (FCFIC)FLEX COLLABORATIVE OBJECTIVES:

Feeling

Squeezed?


The SMART objectives of the “Florida CAH Financial Improvement Collaborative” are action oriented, and data driven with measurable outcomes to ensure marked improvements for the thirteen participating CAH’s:

1) Conduct financial and operational assessment with SWOT (Strengths, Weaknesses Opportunities, and Threats) analyses in each hospital resulting in Strategic Financial Improvement Plan;

2) License and employ the iVantage Hospital Strength Index™ Scorecard Data and Reports;

3) Identify Financial Improvement Opportunity through Cost Report Analysis;

4) Complete Comprehensive Revenue Cycle Analysis;

5) Provide relevant and up to date educational resources to be delivered through live workshops, webinars, and online education at www.hthu.net

6) Improvement in 6 financial indicators;


1) Conduct financial and operational assessment with SWOT (Strengths, Weaknesses Opportunities, and Threats) analyses in each hospital resulting in Strategic Financial Improvement Plan; STATUS: Dec-Feb timeframe

• A review of the hospitals recent performance (historical data)

• SWOT analysis (discussion and data generated)

• Assessment of competitive position (iVantage report)

• Assessment of competitive strength (iVantage report)

• Identification of strategic problems/issues confronting the hospital (discussion)

✔ HTH will provide a framework for this analysis to assist in its completion.

Florida CAH Financial Improvement Collaborative (FCFIC) FLEX COLLABORATIVE OBJECTIVES:


2) License and employ the iVantage Hospital Strength Index™ Scorecard Data and Reports; STATUS: ✔ Accomplished


2) License and employ the iVantage Hospital Strength Index™ Scorecard Data and Reports

Webinar hosted by iVantage. Topic: Using the hospital strength index to its full potential. Webinar date: January 8th, 2013 at 9 CST/ 10 EST.




3) Identify Financial Improvement Opportunity through Cost Report Analysis;


3) Identify Financial Improvement Opportunity through Cost Report Analysis; STATUS: Under contract negotiations with Keith Williams

$1000 Cost Report Estimate Tool – by Keith Williams













5) Provide relevant and up to date educational resources to be delivered through live workshops, webinars, and online education at www.hthu.net


5) Provide relevant and up to date educational resources to be delivered through live workshops, webinars, and online education at www.hthu.net STATUS: On-going

Workshops: Jan 17th meeting in Tallahassee, Thursday 1:30 – 3:00 PM is all FLEX

Webinars: Dec 11, 2012

January 8, 2013 @ 10 CST/9 EST (hosted by iVantage)

February 12, 2013 @ 10 CST/9 EST

Online education: www.HTHU.net

HTH FL Wiki page: Where you can find all things related to FL FLEX Initiative.

http://hometownhealthflorida.wikispaces.com/home

http://www.HTHU.net/






5) Provide relevant and up to date educational resources to be delivered through live workshops, webinars, and online education at www.hthu.net STATUS: On-going

6) Improvement in 6 financial indicators (4 pre-selected and 2 hospital selected)


6) Improvement in 6 financial indicators (4 pre-selected and 2 hospital selected)

-Days cash on hand-Patient deductions-Medicare outpatient cost-to-charge

-Salaries to net-pt.-revenue

-Hospital choice #1 -Hospital choice #2

Action Item: update the 4 financial indicators and choose 2 additional indicators by end of December 2012.


Fiscal Year Cost Report Data iVantage Hospital ID

Days Cash on Hand

Patient Deductions

Medicare Outpatient Cost to Charge Ratio

Salaries to Net Patient Revenue

Net Days Revenue in Accounts Receivable

2010 1134 12.1 67.90% 0.26 44.90% 96.6

2010 1132 7.8 47.80% 0.39 56.50% 49

2010 1019 111 62.70% 0.37 41.50% 86.3

2010 1141 -10.4 60.30% 0.24 35.20% 152

2010 1135 17.5 67.60% 0.33 52.50% 62.1

2010 1138 234 67.50% 0.25 64.70% 47.3

2010 1133 12.8 44.30% 0.36 50.30% 22.8

2010 1140 0 65.30% 0.27 59.40% 57.6

2010 1142 63% 0.27 26% 52

2010 1137 20.9 57.80% 0.24 36.20% 50.3

2010 1131 70.40% 0.29 55.40% 43.1

2010 1139 67.40% 0.26 52.70% 40.3

Hometown Health FL CAH Median 12.80 64.15% 0.27 51.40% 51.15

US CAH Median 65.94 36.02% 0.48 44.66% 53.45


External & internal factors that determine if you make payroll

ReferralsOutpatient volumeInpatient volumeSurgery volumeDemographics

Keep this in mind: Some improvements maybe one time catches (DNFB) and some are on-going improvements (POS cash collections)

Following P&PEfficienciesProper documentationContract issues


Salaries to net-pt.-revenue [worksheet A, col. 1, line 101/worksheet G-3, line 3]

Range: 19.9% to 59% Benchmark:

• FL median CAH % = 52.51% (increasing trend since 2005)• U.S. median CAH = 44.78% (constant since 2007)

A value greater than 50% indicates that the majority of net revenue is for salaries and may indicate a labor intensive organization and/or one that employs the medical staff.

A low denominator, net patient revenue, can give the appearance of a salary issue.

A high numerator, salaries, can give the appearance of issues in the business office or that all is well.

So is the issue salaries or net patient revenue? Maybe both.


Medicare outpatient cost-to-charge [OP Medicare costs/OP Medicare expenses]

Range: 0.19 to 0.39Benchmark: < 0.55

• FL median CAH = $0.29/$1.00 (decreasing trend since 2005)• U.S. median CAH = $0.48/$1.00 (constant since 2006)• On average, FL CAH’s OP costs for Medicare patients is

less than half of the related charge.

A value less than 0.50 may indicate high patient volume, gross charges are high, costs are low, or a combination of these factors.


Patient deductions [worksheet G-3, line 2/worksheet G-3, line 1]

Range: 44.31 to 70.41

• FL median CAH = 65.31 (51.82 in 2005)

• U.S. median CAH = 36.78 (30.84 in 2005)

A high value indicates high discounts and/or allowances.


Days cash on hand (an OUTCOME) [calculated at fiscal year end]

Range: 0 to 463 daysBenchmark: > 60 days

• FL median CAH = 12.80 days (trend up since 2005)• U.S. median CAH = 68.43 days (trend up since 2005)

A low value indicates financial difficulty.Need cash? Look here!

Contractual deductions

Write-offsContractual underpaymentsHigh salary costs compared to volumeDenials (<2% of contractual net revenue)Extended time for DNFB (<8 days)POS collectionsAR collections (<53 days, but don’t stretch to far to fast)

Florida CAH Financial Improvement Collaborative (FCFIC)

CASH COLLECTION PROCESS (adapted from “The Outsource Group”)

1. Are all non-urgent services scheduled?2. Are benefits verified prior to the date of service?3. Does registration staff have access to price lists?4. Has registration staff been trained to collect? Do they use

scripting tools? (“My ex-spouse pays my bills” or “my doctor told me not to worry about the bill”)

5. Are you calculating the patient’s estimated liability prior to the date of service and calling them prior to the date of service to discuss their obligation? Is the expectation that the patient does not have to pay?

6. Do you have a discharge-planning process in place for emergent & non-emergent services?

7. Is your discharge policy written? Is the admin team a participant in this policy?

8. Do you have a cash collections policy?9. Do you offer prompt payment discounts to encourage self-pay

patients to pay at the POS?10.Are you screening and collecting previous bad debts?11.Do you have an on-site, third party eligibility vendor?


CASH COLLECTION MONITORING PROCESS

1. Track cash collections against goal2. Track POS cash against goal3. Track clean claims throughput against goal4. Track denials against goal5. Track 3rd party payments against contract rates (under-

payments and overpayments)6. Monitor write-offs against P&P 7. Track credit balance receivables8. Track patient complaints (if staff is asking for cash up-front,

you should be getting complaints initially, especially if that is not the expectation of the patient)

9. If A/R has decreased, is it because of write-offs or improvement in collections

10.Track collection agency netback percent and age of accounts being collected (fishing for easy money?)


Action Item: update the 4 financial indicators and choose 2 additional indicators by end of December 2012 (when selecting consider upstream or downstream improvements).


Four aspects to consider about communicating indicators to stakeholders:

Indicator > names the financial indicator

(net days in A/R)

Purpose > trending, snap shot, etc.

(trending indicator of overall A/R performance)

Value > what the indicator shows or identifies

(revenue cycle efficiency)

Formula > metrics used to calculate the indicator

(net A/R / net patient revenue)


Jimmy Lewis, [email protected]

Kathy Whitmire, Managing [email protected]

Lou Semrad, Director of Clinical [email protected]

Susan Wiese, Director of Events & [email protected]

mailto:[email protected]





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FLEX CAH Financial Improvement Collaborative 12-11-2012 Sponsored by Florida ORH & Hometown Health