HIPAA: Overview and Impact On Revenue Cycle · HIPAA: Overview and Impact On Revenue Cycle Lee Barrett, Director, Health Care Practice PricewaterhouseCoopers, LLP [email protected]

1

Transaction Standards and Code Sets and Their Effect on the

Revenue Cycle

HIPAA:HIPAA:Overview and Impact Overview and Impact

On Revenue CycleOn Revenue Cycle

Lee Barrett, Director, Health Care Practice PricewaterhouseCoopers, [email protected](860) 543-2275 (cell)

End.2 Copyright © 2002 PricewaterhouseCoopers LLP 2

Copyright © 2002 PricewaterhouseCoopers LLP

Agenda

Brief HIPAA Overview and Background

Approach to HIPAA and the Changing Landscape

HIPAA: Where’s the Beef?



• E-Health - transformation in health care to private, personalized, interactive and secure use of Internet

• Genomics - breakthroughs will shift system from cure to prevention while placing an even higher premium on security and privacy

• Consumerism - empowered consumers create impatient patients demanding information and access

HIPAA endorses exchanges of PHI via the internet with appropriate

privacy & security controls.

A Context for Change

HIPAA intersects with three key industry drivers identified in Health Cast 2010



HIPAA Capabilities Model

Overall Objectives:

– Conduct a HIPAA assessment that will provide a representative analysis of its security and privacy risks.

– Analyze TCI, Privacy and Security (internal and external)

– Develop GAP Analysis– Develop a Comprehensive Implementation Plan– Develop detailed projects with resource

requirements– Determine in-source and out-source options– Provide ongoing HIPAA updates & support

Benefits:

– Enterprise wide security and privacy framework that reflects the strategy and mission of the organization

– Risk mitigation– EDI benefits and cost reductions– Revenue enhancements– Better clinical and business data– Greater data availability– Customer satisfaction

People

Technology

Strategy

Management

Knowledge

Support

Technologies

LeadershipExecutive Sponsorship

Security/Privacy FrameworkSecurity Program Structure

Security Program Resources and Skillsets

Policies & ProceduresSecurity Policies, Standards and Guidelines

ManagementSecurity/Privacy OperationsSecurity/Privacy Monitoring

User ManagementUser Management

User Awareness?Behavior

Information Asset SecurityHost Security

Database / Metadata SecurityElectronic Commerce Application Security

Internal Network SecurityInternet Security

Technology Protection and ContinuityPhysical and Environment Controls

Contingency Planning Controls

Capabilities Model

Process

Charges

Collections Posting Contract Monitoring

Bad Debt Processing

CodingCharge Capture

Documen-tation

Pre-admission Admission Financial

CounselingInsurance

Verification

“Front-End”

“Billing”

“Back-End”

Follow-up

Billing

HIPAA & The Revenue Cycle



HIPAA Regulatory Timeframe

Transactionsand Code Sets

Security

6/03

NPRM Published Final Rule Date Date Compliance Required

Expected Final Rule Date Expected Date Compliance Required

Privacy

Health Plan ID

Individual ID

6/98 6/00 6/01 6/0212/98 12/99 12/00 12/026/99 12/01

These NPRMs have not been issued in

initial draft

8/2000 10/2002

Provider ID

Employer ID

12/2000 4/2003

Enforcement

Extension

10/2003Testing

Final Rule



Standard Transaction Flow

Enrollment

Pre-Certification &Adjudication

Claims Acceptance

Claims Adjudication

Accounts Payable

EligibilityVerification

Pre-Authorizationand Referrals

Service BillingClaim Submission

Claims StatusInquiries

AccountsReceivable (AR)

Functions

Providers

Functions

Payers

Enrollment

Functions

Sponsors

270 (Eligibility Inquiry)

271 (Eligibility Information)

837 (Claims Submission)

835 (HealthCare Claim Payment Advice)

270 (Eligibility Inquiry)

271 (Eligibility Information)

834 (Benefit Enrollment & Maintenance)

810 (Invoice)**

820 (Payment Order/RA)

275 (Claims Attachment)*

276 (Claim Status Inquiry)

277 (Claim Status Response)

278 (Referral Authorization and Certification)

148 (First Report of Injury)*

These are not contained in the initial Transactions and Code Sets Final Rule*



How HIPAA Impacts The Revenue Cycle?

Front OfficePhysician InteractionOrdering lab/x-ray testsUsing reference labsCommunicating with outside agenciesEligibility/Pre-CertificationClaims billingClaims Follow-up

Hospital AdmissionsDocumentation and CodingTracking systemsMedical StudentsConsultsPre-authorizationsClaims managementContract payment compliance



Reduced Accounts Receivable Cycle

Improved Customer Service

Quicker Cash Flow

Improved Accuracy (5% data entry errors)

More Efficient Operation

Code Sets and Transaction Standards



Lower FTEs

Reduce/Eliminate Rework

Reduce Operational Costs (office supplies, postal costs, and telephone charges)

Chance to Automate Resolutions

EDI Benefits - Tactical



Assessment Impact of Transaction Standards and Code Sets on a 200 bed hospital

Financial Impact

$49,920 $199,680

$-0-$24,960$49,920 $37,440

$361,920$79,622

$442,542

FTE Impact

-2-8-0-1-2-1

-1222%

Impact Assessment

Pre-Cert/RegistrarsCollection SpecialistsBillersCashiers/Cash PostingFinancial Counsellors Supervisors

Total Savings Fringe Benefit Reductions

TOTAL Potential FTE Savings




Financial Impact

$14,500$3,600

$22,500

$8,000

$20,000

$68,600

Impact Area

-12-3

-1,500 sq. ft

-4 tons

-Misc. Overhead

Impact Assessment

TelecommunicationsNumber of Phone LinesNumber of Fax Machines

SpaceCost per foot (allocated in budget)

Paper ProductsClaims and related attachments

Other:

Total




Financial Impact

$3,424,660

$171,233

Calculations

$125,000,000$20,000,000

$342,46658.40

10 Days

Impact Assessment

Annual RevenuesGross Accounts ReceivableAverage Daily Gross RevenueGross Days Revenue in Accounts ReceivablePotential GDRO Reduction (Over Time)

GDRO Savings Invested at 5% Annually Interest Income



Potential Total Costs Savings for one 200 bed Hospital

$682,375


Documents

HIPAA: Overview and Impact On Revenue Cycle · HIPAA: Overview and Impact On Revenue Cycle Lee Barrett, Director, Health Care Practice PricewaterhouseCoopers, LLP [email protected]