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JANUARY 2020 – REIMBURSEMENT Monitoring Your Billing Company Performance: Metrics You Need to Measure DESCRIPTION How do you know if your billing company is doing a good job for you? The speaker will review relevant industry benchmarks related to revenue cycle management and how to use them to evaluate your vendor’s performance. OBJECTIVES
• Identify key industry benchmarks for revenue cycle management performance • Understand the terminology used in the billing company industry • Apply these standards to evaluate your receivables over annual cycles and identify
problem areas 1/28/2020, 10:45 AM - 11:45 AM, Monitoring Your Billing Company Performance: Metrics You Need to Measure FACULTY Jeffery Bettinger, MD, FACEP DISCLOSURE (+) No significant financial relationships to disclose
MONITORING YOUR BILLING
COMPANY PERFORMANCE:
METRICS YOU NEED TO
MEASURE
PRESENTED BY: JEFFREY BETTINGER, MD, FACEP
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Goal:To understand revenue
reduction causes and to use metrics for early recognition
of billing problems.
WHY IS THIS IMPORTANT TO ME? q Revenue collected plays a critical role in
shaping services provided and the satisfaction of those providing the service:§ Salaries§ Staffing levels§ Financial security, including retirement§ Interaction, or independence, from hospital
administration§ Recruiting§ Etc.
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RESPONSIBILITY FOR MONITORING BILLING PERFORMANCE
q Unrealistic to have all physicians maintain adequate knowledge
q Usually the responsibility of one physician, not necessarily the group leader
q Time spent should be compensatedq Non-physician expertise depending on
group size
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TOP 5 REASONS FOR LOST REVENUE IN 2011 – STILL LARGELY TRUE IN 2020q Missing and incomplete chartsq Deficient documentationq Conservative or inaccurate codingq Credentialing problemsq Managed Care – various problems
§ Downcoding, partial payment, incorrect payment, billing agent software system deficiencies
EMERGING REVENUE THREAT – HIGH DEDUCTIBLE HEALTH INSURANCEq Self-pay collection processes mainly
designed for patients without insurance
q Historically very low collections
q Marked increase in self-pay amounts due to high deductible plans
q Benefits and costs of enhancing collection processes for deductible amounts
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THE “BUCK” STOPS (OR STARTS) HERE . . .
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What do these billing
reports mean?
IMPORTANT BILLING REPORTSq Aging reportsq Reports that tie collections back to the
month of chargesq Cash receipts and charges reportsq Encounter tracking reportsq Time-to-collect reportsq Coding acuity reports
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AGING REPORTS:AKA: AGED TRIAL BALANCE REPORT
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0-30Days
30-60 Days
60-90 Days
90-120 Days
>120 Days
MedicaidSelf PayBlue CrossX-HMOY-InsuranceMedicare
AGING REPORTq Dollars in each column represent unpaid
invoices at various agesq Some reports re-age invoice to zero days
when financial class in changed (avoid)q Some reports keep invoice amount in
original financial class if financial class is changed
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AGING REPORTS:AKA: AGED TRIAL BALANCE REPORT
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0-30Days
30-60 Days
60-90 Days
90-120 Days
>120 Days
MedicaidSelf PayBlue CrossX-HMOY-InsuranceMedicare
PREFERENCES
q Invoice remains in original age column, even if financial class changes
q Invoice changes to new financial class upon change of financial class
q Include aging for individual payer (insurance company product) level
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AGING BENCHMARKS (1)
q AR > 120 days less than 20% of total ARq Individual financial class AR > 120 days at
variable ratio to current, depending on:§ Dunning philosophy§ Conversion to self-pay process§ Outstanding provider numbers§ Payer payment policies§ Billing company AR management
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AGING REPORTS:AKA: AGED TRIAL BALANCE REPORT
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0-30Days
30-60 Days
60-90 Days
90-120 Days
>120 Days
MedicaidSelf PayBlue CrossX-HMOY-InsuranceMedicare
AGING BENCHMARKS (2*)
q Watch for trend of steadily decreasing ARq Look for “bubbles”
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REPORTS THAT LINK COLLECTIONS BACK TO THE MONTH OF CHARGES:AKA: COLLECTION RATIO, COLLECTION ANALYSIS
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Month Visits Charges CollectionsAverage
Collection Per Visit
%Collection Disallowances Bad
Debt% AR
Balance
January
February
March
AprilMay
June
COLLECTION RATIO/NOTESq Columns for charges, receipts, disallowances,
bad debt, and AR balanceq Amounts in each row represent the receipts,
disallowances, etc. for invoices that are included in charges for the individual historic month
q Critical information: Historic collections per visit
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COLLECTION RATIO PREFERENCES
q 24-month historyq Include collection agency receipt column
(rare)
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COLLECTION RATIO BENCHMARKS
q 12 months: < 1% outstanding ARq 18 months: < 0.5% outstanding AR
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DEMAND THE TRUTH, THE WHOLE TRUTH, AND NOTHING BUT THE TRUTH!
CASH RECEIPTS AND CHARGES REPORT AKA: TRANSACTION SUMMARY, COLLECTION AND CHARGES TRENDING REPORT
q Really two reports:§ One-month review of payments and disallowances
by financial class§ Multi-month tracking of summary charges and
collections
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CHARGES/RECEIPTS REPORT PREFERENCESq Strict calendar month accounting – no
“27” day monthsq Single report contains receipts and
disallowances for all major financial classes and large payers
q Trending reports go back 2-3 yearsq Trending reports contain encounter
number information
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PAYMENTS/DISALLOWANCE BENCHMARKS – NO SET VALUEq Ratio of payments to disallowances by
payer depends on:§ Fee schedule - provider and payer§ Payer policies§ Acceptance of payer determined disallowances
and down-coding
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PAYMENT/DISALLOWANCE RATIO BY FINANCIAL CLASS
Closely tracking these ratios may
give first indication of change in payer
policies or inaccurate payment
posting.
ENCOUNTER TRACKING REPORTS
q Emergency Departmentq Billing agent
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ENCOUNTER TRACKING REPORTS -NOTESq Electronic ED log is the primary source
documentq Ensure that log contains all patients that
present to the ED (including admits)q Double check notations such as LWBS,
AMA, PMD, etc. on ED log
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ENCOUNTER TRACKING REPORTS -PREFERENCESq Daily interaction between personnel to
reconcile missing and incomplete recordsq Hold transmissions for 2 to 5 days before
sending them to billing agent
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ENCOUNTER TRACKING REPORTS -BENCHMARKSq Eventual loss (after 1 year) of 0% of
encountersq Six-month benchmark of < 0.5% missing
encountersq Revenue loss 2° to non-billed record: 3 -
5%/month delayed, value near 0 after 12 months
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WHICH DESCRIBES YOUR
ENCOUNTER TRACKING SYSTEM?
TIME-TO-COLLECT REPORT
Most common calculation is days in Accounts
Receivable (Days in AR).
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CALCULATING DAYS IN AR
Days in AR = Gross ARAvg. daily chargefor last 90 days
Note: Some analysts prefer net days in AR, but net AR is a difficult calculation for emergency
medicine.
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DAYS IN AR BENCHMARK FOR EMERGENCY MEDICINE
q 30 - 50 days dependent upon:§ Dunning philosophy§ Efficiency of billing op§ Credentialing§ Problem payers§ Accuracy of initial insurance info§ State-specific indigent care programs
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Days in AR? Thirty-five is great, right?
DON’T BE FOOLED BY THE NUMBERS . . . q Writes self-pay off after 30 daysq Accepts all reduced payments from
insurersq Routine write-offs for missing provider
numbersq Accepts all bundling and downcoding
decisions of insurers
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CODING ACUITY REPORTS
q Common coding reports:§ Overall monthly code choice, total, and by provider§ Evaluation and Management codes, total, and by
provider§ RVU reports§ Code reports by payer
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CODE CHOICE BENCHMARKSq Only available database is from Medicareq Correlation with admits and transfersq Compliance concernsq External auditsq Intra-group comparisons - watch the pitfallsq Active documentation feedback program
from billing agent
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Understanding billing reports is not quantum mechanics. Using
benchmarks and methodical evaluation of routine billing
reports, problems can be easily identified, and collections can be
enhanced.
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TOP 5 REASONS FOR LOST REVENUE IN 2011 STILL HOLD IN 2020
q Missing and incomplete chartsq Deficient documentationq Conservative or inaccurate codingq Credentialing problemsq Managed Care – various problems
§ Downcoding, partial payment, incorrect payment, billing agent software system deficiencies
MISSING AND INCOMPLETE CHARTSq Electronic ED log is the primary source
documentq Daily interaction between billing and
hospital personnel to reconcile missing and incomplete records
q Eventual loss (after 1 year) of 0% of encounters
DEFICIENT DOCUMENTATIONq Monthly code choice report, total, and by
provider
q Only available database is from Medicare
q Intra-group comparisons - watch the pitfalls
q Active documentation feedback program from billing agent
CREDENTIALING PROBLEMS
q Watch for trend of steadily decreasing AR in the aging reports
q Look for “bubbles” in the aging reportsq AR > 120 days less than 20% of total AR
(late indicator)
MANAGED CARE PAYMENT PROBLEMSq Watch for trend of steadily decreasing AR
for each payerq Receipts and disallowances for large
payers – look for trendsq Ratio of payments to disallowances by
payer – look for trends
HIGH DEDUCTIBLE HEALTH INSURANCEq Need to measure collection rates for this
subset of patient responsible amounts
q May require redesign of billing reports
q Collection rate for self-pay at registration usually less than 5%
q Collection rate for self-pay after deductible often only 25% to 35%
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Knowledge is power
(and increased collections).
THANK YOU
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