Participants Guide.indd

Participant’s Guide

Evidence-Based Revenue Cycle ImprovementAn HFMA MAP Educational Program

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™

Introduction

Thank you for participating in this HFMA educational session. In an era of shrinking payment, rising costs, and reform,

the hospital revenue cycle is challenged as never before to operate efficiently, manage complex information, commu-

nicate clearly with patients, and get the payment that hospitals are due. Ultimately, a high-performing revenue cycle

is critical to a hospital’s mission. By improving a hospital’s cash position, the revenue cycle helps fund investment in

clinical resources that make high-quality care a reality. HFMA’s MAP initiative, which is highlighted in this program,

provides tools that hospitals can apply to achieve a high-performing revenue cycle.

Thank you again for generously sharing your time and expertise to participate in this program. By supporting high

performance in healthcare finance, you support the mission of health care.

This educational program includes the following components:

• Introduction by the facilitator

• Video presentation featuring Suzanne Lestina

• Discussion

• Review of additional resources

• Closing



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Two Westbrook Corporate Center Suite 700 Westchester, IL 60154 www.hfma.org (800) 252-4362

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Contents Page(s)

1. Agenda 4

2. Suzanne Lestina biography 5

3. Slides from the video presentation by Suzanne Lestina. 6-35

4. Background Resources

A Reform-Era Revenue Cycle. This HFMA educational report describes 36-43the pressures that reform is putting on the revenue cycle and how organizations are responding. Topics covered include charge capture, pricing, and patient access.

HFMA’s MAP Keys. This document lists all of HFMA’s MAP Keys as of November 2010. 44-48For each performance indicator, the document identifies the purpose, value, and calculation.

Mapping Out Strategies for Revenue Cycle Success. This article taps the experiences 49-56 of HFMA MAP Award winners to identify strategies to measure, compare, and improve performance.

MAP App information sheet. This document describes HFMA’s MAP App—an online tool 57-58that hospitals can use to track, compare, and improve performance.



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— 3 —© Copyright 2010 Healthcare Financial Management Association. It is a violation of federal copyright law to reproduce all or part of this publication or its contents, in any form by any means, without permission. For more information, contact HFMA Chapter Relations.



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1. Agenda (Times are approximate)

Introduction 5 minutes• Overview of Session Content

Video Presentation 40 minutes• Featuring Director of Revenue Cycle MAP at HFMA, Suzanne Lestina

Discussion of 40 minutes• RevenueCycleOperations• Challenges• Measuring,Comparing,andImprovingPerformance

Review of Resources 5 minutes• MAPOverview• MAPKeys• MAPApp• EducationalReport

Close

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2. Suzanne Lestina’s Biography

Suzanne Lestina, CHFP, CPC, is the Director of Revenue Cycle MAP for HFMA. In this role, Suzanne serves

as the technical expert and consultant for the MAP product line. She works in an advisory capacity regarding

the technical aspects of MAP revenue cycle performance improvement by aligning key topics, strategies, and

solutions for MAP users. Suzanne’s extensive revenue cycle knowledge has enabled her to provide technical

input to various industry caucus and task group meetings as well as serving on several national committees.

Suzanne joined HFMA with many years of healthcare experience, including 10 years as a revenue cycle con-

sultant. Her consulting experience includes education, revenue cycle operations assessments, work redesign,

and compliance audit/reviews. Prior to her consulting work, Suzanne held revenue cycle leadership roles for

two Chicago area hospitals. She is a past president of the First Illinois Chapter of HFMA and speaks frequently

to HFMA chapters, healthcare providers, state hospital associations, and other professional associations

across the country.

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EVIDENCE-BASED REVENUE CYCLE IMPROVEMENT

Suzanne LestinaSuzanne LestinaDirector, Revenue Cycle MAPHealthcare Financial Management Association

REVENUE CYCLE IMPROVEMENT

© Copyright 2010 Healthcare Financial Management Association. It is a violation of federal copyright law to reproduce all or part of this publication or its contents, in any form by any means, without permission. For more information, contact HFMA Chapter Relations.

greg

Typewritten Text

7

OVERVIEW

R f d th lReform and the revenue cycle

How hospitals are responding

Evidence-based improvement

Successful practices

Joining our journey

REFORM AND THE REVENUE CYCLE

© Copyright 2010 Healthcare Financial Management Association.

8

INCREASING INSURANCE COVERAGE

4

6

8

10

12

14

16

18

20

eric

ans

(M

illio

ns)

0

2

4

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Am

e

Source: CBO

CHANGING PAYER MIX

24

(5) (3)

16

24

(20)

(5)

10

25

Am

eric

ans

(M

illio

ns)

(32)(35)Uninsured Non-Group

MarketEmployer

SponsoredMedicaid Exchanges

A

Source: CBO letter to House Speaker Nancy Pelosi –March 20, 2010


9

FINANCIAL IMPACT ON YOUR HOSPITALS

Payment AreaPayment Reduction Over a10 Year Period (in billions)

Market basket update (MBU)

Disproportionate Share Hospital payment cuts (Medicare & Medicaid DSH)

Reduced readmissions

New payments for uncompensated care

-36.1

-7.1

Payment reductions:

Payment Area 10 Year Period (in billions)

-112.6

177.3

Hospital-acquired conditions

Accountable care organizations

Net aggregate financial impact on U.S. hospitals

-1.5-1.5

17.06

Sources: Health Care Facilities Managed Care Analysis; Bank of America Merrill Lynch; March 4, 2010; p. 9CBO letter to Speaker Nancy Pelosi; March 20, 2010; HFMA estimate

OTHER REFORM CHANGES

HR 3590 Sec 2178.c

“A ll h h it l h ll t bli h“Annually, each hospital shall establish and make public a list of the hospital’s standardized charges for items and services provided by the hospital, including for DRGs.”


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OTHER REFORM CHANGE

N i tNew requirements– Standardized charge reporting

– Requirements for tax-exempt hospitals

New economic incentives– Payment linked to quality

– Accountable care organizations

– Bundled payment

HOW REFORM IS AFFECTING THE REVENUE CYCLE

Expanded NewPayment New Economic

ycle

Impe

rativ

es

Expanded Coverage

New Requirements

Payment Cuts

New Economic Incentives

Improve Performance and Efficiency

Eligibility Processes

Charity Care Policies/Process

Denials Prevention

ICD-10

RationalPricing

Documentation and Coding

Rev

enue

Cy

Physician Integration

Bundled Payments


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HOW HOSPITALS ARE RESPONDING

PRINCETON BAPTIST MEDICAL CENTERBIRMINGHAM, ALABAMA

Area of Excellence: Cash Collection

Consolidated pre-arrival unit

Automated insurance verification, including identifying patient financial obligation

Communicating about and collecting this

How They Did It

Communicating about and collecting this amount prior to arrival

Instituting continuous quality improvement process to identify and reduce errors


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PRINCETON BAPTIST MEDICAL CENTERBIRMINGHAM, ALABAMA

Results

Reduce DNFB to 3.7 daysIncrease cash as a % of net revenue to consistently above 100%Decrease denials to less than .25% of gross revenueMaintain cost to collect at less than 3%

DNFB Comparable Statistics6.2 Median

5.4 Top Quartile Performance

Source: HFMA’s March 2010

TOUCHETTE REGIONAL HOSPITAL CENTREVILLE, ILLINOIS


Revising charity care policy

Adopting an automated patienteligibility system

Incorporating charity care criteria

How They Did It

Incorporating charity care criteriainto the system’s database


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TOUCHETTE REGIONAL HOSPITAL CENTREVILLE, ILLINOIS

Results

Reduced bad debt charges by 48.6%

Increased charity care by 15.5%

Decreased overall uncompensated charges by 16.6%

Increased cash collections by $2.5 million over the goal of 102% adjusted net patient services revenue

Cash Collections Comparable Statistics

100.2 Median102.1 Top Quartile Performance


BAYLOR HEALTH CARE SYSTEMDALLAS, TEXAS


Centralize the business office

Centralize insurance verification and pre-registration

Centralize denials management

How They Did It

Centralize denials management


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BAYLOR HEALTH CARE SYSTEM DALLAS, TEXAS

Results

Improvements from 2000-2009– Achieved consistent net revenue cash

collection rate of 100% or better

– Lowered net accounts receivable days from 67.9 in 2000 to 39.9

– Decreased 91+ days from Days in A/R Comparable Statistics

discharge aging from 13.0% to 5.8%

– Reduced cost of collections from 2.5%

44.5 Median37.9 Top Quartile Performance


EVIDENCE-BASED IMPROVEMENT


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Components

Measuring Performance– What are consensus measures of revenue cycle excellence?

Comparing Performance– How are peers performance and what are performance targets?How are peers performance and what are performance targets?

Improving Performance– How do high performers succeed?


Benefits

Identify and manage to trends

Validate best practices

Trigger corrective action

Forecast performance

Identify opportunities for process improvementIdentify opportunities for process improvement

Compare performance with like organizations

Use data to change behaviors


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HFMA INITIATIVE

MAP is a comprehensive performance improvement strategy

WHAT IS MAP?

p gy

Identify indicators

Track and improve performance

Recognize excellenceg

Share successful practices


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EVIDENCE-BASED IMPROVEMENT:

MEASURING PERFORMANCE

MAP Keys are industry-developed key indicators for revenue cycle performance

MAP KEYS

indicators for revenue cycle performance

Clearly defined

Measurable

Discerning

Comparable


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MAP KEYSMAP Keys focus on key areas of revenue cycle performance

Patient access

Revenue integrity

Claims adjudication

revenue cycle performance

Management

PURPOSE | VALUE | CALCULATIONExample

Indicator

Purpose

Value

Calculation

Net days in A/R

Trending indicator of overall A/R performance

Indicates revenue cycle efficiency

Net A/RCalculation Net A/RNet patient service revenue


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EVIDENCE BASED IMPROVEMENT:

COMPARING PERFORMANCE

COMPARING PERFORMANCE

Manage trendsManage trends

Identify opportunities

Prioritize opportunities

Identify successful practices


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COMPARING PERFORMANCEFlexible comparisons are needed for in-depth analysis

Industry trends

Performance over multiple time frames

p y

Pre-selected peer groups

Customized peer groups

Source: HFMA’s

CUSTOMIZED PEER GROUPS

SSource: HFMA’s


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EVIDENCE BASED IMPROVEMENT:

IMPROVING PERFORMANCE

HFMA’s MAP Award recognizes healthcare organizations that achieve excellence in the revenue cycle and serve as models for the healthcare industry

MAP AWARD


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INSIGHTS FROM AND ABOUT HIGH PERFORMERSArea for improvement: Cash collection

Point-of-service collections

– Median: 27%– Top quartile: 43%

Research– % of high performers citing importance

of investing in front-end technology

– % of high performers having estimates available for patients at registration

S f l tiSuccessful practices– Sample scripts

– Use of dedicated trainers for patient access staffSource: HFMA’s March 2010

SUCCESSFUL PRACTICES


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SUCCESSFUL PRACTICES

C ltCulture

People

Processes

Technology

CommunicationCommunication

CULTURE


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CULTURE

C lt i d f th h d ttit dCulture is made up of the shared attitudes, values and goals that it puts into practice

How well an organization develops a sense of mission and vision surrounding the revenue cycle can dramatically affect performance

“When you don’t have the right culture, you can only tinker around the edges.”

SUPPORT FOR REVENUE CYCLE

7 = Extremely high to 1 = None at all

86%High Performing

y g

76%All Other


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THE VALLEY HOSPITALRIDGEWOOD, NEW JERSEY

Provide Revenue cycle and finance education to:o de e e ue cyc e a d a ce educat o to– All revenue cycle employees

– All departments, staff and directors

– New managers

Managers’ yearly goals are tied in part to the hospital’s financial performance

Outcomes achieved:– Operating margins increased from 2.1% to 3.5%

between 2000-2009

PEOPLE

40


26

1 d

DAYS OF INITIAL REVENUE CYCLE TRAINING REQUIRED

High Performers >10 days 5-10 days 3-5 days 2-3 days 1 day or less

Registrars 57% 14% 14% 14% 0%

Billers 57% 14% 14% 14% 0%

Collectors 50% 21% 21% 7% 0%

Financial Counselors 64% 14% 14% 7% 0%

All Others >10 days 5-10 days 3-5 days 2-3 days 1 day or less

Registrars 42% 25% 15% 11% 7%

Billers 54% 25% 7% 10% 4%

Collectors 47% 30% 10% 9% 5%

Financial Counselors 52% 26% 10% 7% 5%

STRATEGIES TO MOTIVATE, RECRUIT, AND RETAIN STAFF

19%

31%

44%

43%

64%

86%

Increase front-line staff salaries (beyond average organizational increase)

Provide incentives for staff who meet goals

Increase back-office staff salaries (beyond average organizational increase) 19%

0% 50% 100%

High PerformingAll Others

(beyond average organizational increase)


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BAYLOR ALL SAINTS MEDICAL CENTER, FORT WORTH, TEXAS

Staff progress into management positions, (i.e., coordinators, managers, directors & 1 executive director)

Staff progress into billing credit balance adjudication

Staff progress into collections

Staff progress into contract compliance; transplant claims adjudication; and customer service

Staff work in support services

Staff progress into billing, credit balance adjudication

or payment and adjustment posting Outcomes Achieved:Increased employee satisfaction and reduced turnover

PROCESSES

44


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Revenue cycle staff team meet at least monthly84%

71%

FREQUENCY OF REVENUE CYCLE TEAM MEETINGS

Process centered improvement team(s) meet at

least weekly

Cross-functional team meet at least monthly

(including reps from clinical, IT, HIM, . . . )

25%

51%

26%

50%

57%

50%

Metric triggered leadership teams (triggered by

revenue cycle metric outside defined parameters)

3%21%

0% 20% 40% 60% 80% 100%

High Performing All Others

revenue cycle metric outside defined parameters)

Other (responses generally include more frequent,

targeted meetings)

USE OF PATIENT FOCUS GROUPS

20%

43%High Performing

All Others


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Routinely meet to review & discuss issues regarding patient satisfaction 21%

57%

COLLABORATION WITH PAYERS

Routinely meet to discuss & implement process streamlining initiatives

Routinely meet to discuss & implement technology improvements and interfaces

Routinely meet to review & discuss payment discrepancies

57%

26%

25%

86%

64%

64%

Do not routinely collaborate with payers 35%7%

0% 20% 40% 60% 80% 100%

High Performing All Other

SIGNIFICANT CHANGES TO THE FOLLOWING AREAS WITHIN THE PAST 3 YEARS

1 = no improvement to 7 = complete overhaul

Registration

Financial Counseling

Admitting

Billing 31%

21%

24%

23%

29%

43%

50%

64%

Billing

27%

31%

50%

0% 20% 40% 60% 80% 100%


Collections


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CHRISTUS HEALTH NORTHERN LOUISIANA

Coding and Documentation Project:Coding and Documentation Project:– Identified problematic charges

– identified opportunities to improve documentation, coding, and charging

– Monitored batch charge rejections within the three-day bill holding period

Clinical documentation specialists work with physicians – Concurrently to ensure documentation is clear and concise

– Post-discharge to clarify documentation from physiciansPost discharge to clarify documentation from physicians

Outcomes Achieved:– Held late charges to goal of <2%

TECHNOLOGY


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TECHNOLOGY

High performers are good at realizing the potential and g p g g pobtaining the greatest value from their investments

“The specific piece of technology you choose to buy is far less important than if you know how to use it well.”

It is better to adopt a modest solution very well than to adopt a superior solution only moderately well

Focus on improving processes prior to applying automation and prioritizing their purchases by market needs

TECHNOLOGY SUPPORT FOR THE REVENUE CYCLE

7 = Extremely high to 1 = None at all

IT collaboration

IT support forrevenue cycle 55%

71%

79%

y g

IT collaborationwith revenue cycle 51%

71%

0% 20% 40% 60% 80% 100%



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RIVERSIDE METHODIST HOSPITAL COLUMBUS, OHIO

Dedicated IT staff for revenue cycle

Health information management under system’s VP of revenue cycle

Selectively use IT for revenue cycle process improvement – Implemented quality assurance system for registrars

• Monitors all registrations

• Returns errors to registrars to correct

Outcomes Achieved:– Percentage of returned mail dropped from 2 % to 1%

– Increased clean claim rate

COMMUNICATION


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We provide estimates to nearly 16%

21%

AVAILABILITY OF ESTIMATES FOR PATIENT OUT-OF-POCKET LIABILITY

every patient

At time of service, upon request

At scheduling, upon request

At registration, upon request

33%

40%

53%

16%

43%

57%

36%

We do not provide estimates 10%7%

0% 20% 40% 60% 80% 100%

High Performing All Others

71%

WHO HAS ABILITY TO APPROVE PROVISION OF CHARITY CARE

1%

9%

48%

84%

7%

7%

64%

71%Managers, Directors, CFO

Registrars

Financial Counselors

No approval needed if patient meets organizational Charity Care Policy

0%

1%

0%

0% 20% 40% 60% 80% 100%


Schedulers


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CAROLINAS HEALTHCARE SYSTEMCHARLOTTE, N.C.

Extensive training focused on communicating potential financial responsibility prior to service

– Set payment expectations with patients

– Create an opportunity to discuss financial needs

– Obtain complete and accurate patient information pre-service

O t A hi dOutcomes Achieved:– Point-of-service cash collections more

than doubled from 2003 to 2009

SHARE OUR JOURNEY


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NEXT STEPSHow to get ready for reform and cope with tight economy

Adopt HFMA’s industry-created performance indicators

Choose metrics that will measure your performance related to key reform provisions and other industry challenges

Compare performance with peers

and cope with tight economy

Compare performance with peers

Review and adopt practices of high performers

MAP KeysMAP AwardMAP A

More information: www.hfma.org/map

MAP AppMAP Event




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4. Background Resources

T H I S H F M A E D U C AT I O N A L R E P O R T I S S P O N S O R E D b y M E D A S S E T S .

A Reform-Era Revenue Cycle

H F M A E D U C AT I O N A L R E P O R T

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Although healthcare reform law is trimming the ranks of the

uninsured—and in the process, working to ease healthcare

providers’ bad debt—reform otherwise is expected to do little

to alleviate pressures on the revenue cycle.

Hospitals will see some increase in revenue as the uninsured

gain medical coverage through Medicaid or still-to-be-formed

insurance exchanges. They also, however, will see cuts in

Medicare and Medicaid as well as disproportionate share (DSH)

payments, and will still have a sizable self-pay population

as businesses shift greater numbers of employees to high-

deductible or consumer-driven health plans.

New healthcare law will further complicate the revenue

cycle for hospitals by fostering alignment with physicians

and bundling payment. Providers will have to manage the

revenue cycle from both the hospital and the physician

side and coordinate processes within financial clearance,

eligibility, and price estimates as they move to accommo-

date patients throughout the healthcare encounter.

Faced with having to do more with less, hospitals will be

challenged to protect revenue and accelerate and increase

cash collection, avoiding process failures that result in a

denial or a decrease in payment due to medical necessity.

They also will likely consolidate or leverage front-end

resources to gain more efficiency from the technologies

and processes they already employ.

As an over-arching strategy, hospitals should focus on

revenue cycle initiatives that drive optimal performance:

charge capture, pricing, and patient access.

Charge CaptureRather than relying on clinical or support personnel whose

primary job is patient care, many hospitals are creating

charge specialists and building expertise in specific clinical

areas to ensure charges are posted correctly, consistently,

and completely. Providers also are running predictive or

analytic quality checks to prevent errors and add charges

that often go unrecognized.

Denny Roberge, revenue operations manager for 295-

bed Concord Hospital, Concord, N.H., has been leveraging

the hospital’s clinical systems to capitalize on charge

opportunities, which can be worth as much as 10 percent

or more in increased net revenue for some departments.

“There are many charge opportunities—legitimate charges

that would add net revenue,” he says. “As payment tightens

up with reform, hospitals need to make sure they are not

missing anything. Now more than ever, IT systems that can

obtain the documentation and the reports that are required

to generate charges are critical for hospitals. Without such

systems, it could be all but impossible for hospitals to meet

their margins under reform.”

Concord Hospital made charge capture a top priority

approximately three years ago, when leadership created a

centralized charge capture department to follow a patient

from admission through discharge. Although some hospitals

require departments or service lines—which are closer to the

point of care—to be responsible for charge capture, Roberge

believes that tactic isn’t effective in every situation.

“IV therapy is a great example,” he says. “When patients

show up in the emergency department (ED), they start

getting infused. Then they move to another area where

the drugs change. When someone in each department is

responsible for the department’s share of the charge capture,

it’s impossible to know who did the initial hydrations and

who did the sequencing. Under a centralized charge capture

system, hospitals can look at a case from start to finish.”

Centralized charge capture works particularly well for high-

volume services, such as IV therapy, that often are provided

in multiple departments. Centralization often eliminates

the need to rework claims and make edits. “For example,

when individual departments at our hospital did charge

capture, there were times when three initial IV hydrations

were included in the same claim,” Roberge explains.

Centralized charge capture also can significantly improve

revenue across the board. Concord Hospital found $3 million

in gross lost charges last year. This year, it is on track to find

more than $5 million in gross lost charges that were over-

looked in previous years, Roberge reports.

To support centralized charge capture, Concord Hospital

installed a robust electronic clinical documentation system

on nursing floors. The system drops into a report any nursing

service that may carry a charge. Charge capture specialists


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then review each of the services to identify the associated

charges. “Nurses do a great job of documenting what they

did, but they do not think in terms of charges—nor should

they,” says Roberge. “They shouldn’t be deciding how to

charge for a service or when not to charge for it. By having

the documentation system in place, we can have charge

specialists look for chargeable services. This approach works

particularly well for common nursing procedures, such as

central line or catheter placements.”

As a final check on every claim, an audit team reviews the

edits generated by the hospital’s charge capture auditor

technology. “The tool helps with compliance because it

tells you when you charged for too many of one item. More

important, it really links everything together. It tells you,

‘If you did X and Y, then you should expect to see Z.’ The

edits in the tool are so robust, they are helping us find a

net of $1 million every year,” Roberge says.

Capturing charges in ED. A Web-based electronic system

for the Concord Hospital ED reconciles professional and

technical charges. Like many organizations, Concord Hospital

outsources coding of professional services. Charges based

on this coding are entered into the ED system and compared

with coding for technical services so charge capture specialists

can more easily find discrepancies. “This has substantially

reduced the amount of work our charge entry coding staff

has to do. All the information is in one place, and if there is

something wrong with an account, then the system tells staff

right away. They don’t have to wait a couple of days down

the road to find out where the bill is hung up,” Roberge says.

As a result, Concord Hospital has trimmed discharged not

final billed (DNFB) days for the ED, which handles more than

68,000 patient visits a year. Before the reconciliation system

was initiated, discharge not final billed was in the high 20s.

Redundancies and other errors required staff to take extra

time to rework and fix claims, reducing efficiency. DNFB is

now under five days.

The hospital also has increased net revenues from the ED by

more than $1 million and targeted cost improvement efforts.

“If I see the same problem occurring over and over again,

I can identify it as a trend, figure out the root cause of the

issues, and correct them at the source to make the revenue

cycle quicker, cleaner, and more accurate,” Roberge says.

Streamlining the charge integrity process. Debbie

Messina, director of business operations for Stamford Health,

Stamford, CT., is setting up new workflow processing to

avoid late charges and rebilling, which wastes resources for

hospitals as well as insurance plans. Messina is holding first

bills that do not include all charges and asking department

directors to add the necessary charges within 24 hours.

“I send the accounts directly to the departments, saying

‘You’re missing this, this, and this charge. Please add them

within 24 hours.’” she explains. “It’s more of a concurrent

process, rather than a retrospective one that audits bills

after the fact. It doesn’t delay the claims division, eliminates

late charges, and frees up back-end resources.”

Stamford Health’s profile of charges links charges with

assigned CPT procedure codes and ICD-9 diagnoses. It

then identifies exceptions so a nurse auditor can screen for

documentation that supports the service or equipment that

was used in patient care. Between January and December

of 2009, this process identified $3 million in charges that

otherwise would have been missed.

PricingHealthcare reform legislation places providers on a path

toward bundled payments for episodes of care. But since

few steps have been taken along the path, providers are

only beginning to think about the ways in which they will

have to restructure pricing to incorporate physician and

other clinical and ancillary services under a single payment.

Providers have done more to meet reform goals for

enhanced accountability and transparency of hospital

pricing, in hopes of helping consumers understand not only

what services will cost, but also how much they will have

to contribute out-of-pocket.

Although some providers publish on their websites the

amounts they charge for the most common procedures

they perform, others like Integris Health, a 14-hospital

system in Oklahoma City, give to every patient who inquires

a thorough—and highly accurate—estimate of the amount

they will charge for that patient’s care.


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Integris created its Consumer Price Line in 2007 after CEO

Stanley Hupfeld asked secret shoppers to contact each

of the system’s hospitals and ask what the facility would

charge for a relatively minor outpatient procedure or a

more extensive inpatient procedure. “One typical response

was, ‘Gee, I don’t know. But I bet it’s a lot.’ Another was ‘Let

me transfer you.’ Then there was a click, and the shopper

wound up in a black hole,” recalls Greg Meyers, system

vice president for revenue integrity.

Integris modeled the format of its Consumer Price Line after

the explanation of benefits that patients get from insurance

companies to show what has been paid and what the patient

owes. Staff from the health system’s managed care division,

who understand health insurance contracts, discounts, and

negotiated rates, gather information from callers who are

price-shopping for hospital care. Staff work with an auto-

mated contract modeling system that identifies the amount

the hospital would charge a specific insurer based on CPT

and ICD-9 codes. Staff then calculate the amount a patient

would pay based on information on the insurer’s website and

a conversation with someone in the insurer’s claims depart-

ment, and they report back to the patient by phone within

24 hours and by letter in a few days.

Such transparency and consistency in pricing strategy

supports compliance efforts and contributes to a foundation

of trust within the community and patient satisfaction.

Integris continually tracks the accuracy of its price estimates

for patients. “The price we quote 95 percent of the time is

pretty much dead on,” says Meyers. The system also deter-

mines how many inquiries from patients turn into patient

care encounters. Integris handles about 800 to 1,200 calls a

month, and 40 percent of the patients end up receiving

their care at one of the system hospitals.

The health system is planning to automate as much of the

process as possible. “No matter how much we are able to

automate, there will still be some insurance companies whose

claims systems don’t return information electronically. So we

will still run into situations where we will have to contact the

insurer for the information,” Meyers explains.

The next step is to move the process to patient registration.

“Our ultimate goal is to close the transaction at the time of

service,” he says. “We want to be able to tell patients exactly

what they owe, collect the amount they owe, and work with

them to make payment arrangements or get them qualified

for government assistance or charity care at the time of

service so we will never have to send a bill to the patient.”

Advanced pricing capabilities, when combined with a

defensible pricing strategy and meaningful communications,

are proving to be a key way for hospitals to distinguish

themselves in the marketplace.

“Communicating pricing is important from a competitive

standpoint,” notes Meyers. “As healthcare consumers take on

greater financial responsibility for their care, they increasingly

will be seeking providers able to demonstrate greatest

value: high-quality care at the best price that is provided

in a customer-centric service environment.”

Patient AccessHealthcare reform is pushing providers to fix problems early

in the revenue cycle, where they start. But front-line patient

access professionals work with data systems that typically

don’t talk to one another: the admission-discharge-transfer

(ADT) system that registers a patient, a quality system that

flags problems that have to be fixed after the fact, a separate

eligibility system that verifies eligibility but doesn’t validate

information against the ADT, and another credit-scoring or

charity application process. Providers therefore are trying to

integrate patient access workflows and technologies to

improve these disparate processes—much like the functions

on the back end of the revenue cycle where coordinated

efforts complete billing, collecting, and follow-up tasks. The

idea is to create a financial clearance center so registration,

eligibility, and financial counseling can be done cohesively

and ahead of time.

Providers are gradually but steadily working toward that

goal by adding and combining capabilities. Messina is

replacing Stamford Health’s manual process of determining

the patient’s responsibility for services with an automated

tool that operates in real time. The system will provide an

estimate to patients based on their insurance plan benefits

and deductibles as well as their physicians’ procedures,

protocols, and choices of equipment. “One physician

performs a procedure in less OR time than another. One

physician chooses a certain implant, and another chooses

something else. We will be able to provide information for


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Prioritizing Patient-based PaymentMost hospitals and health systems recognize the need to

develop more efficient collection processes, particularly

at the front end of the revenue cycle, and to determine

ways of better managing self-pay receivables.

Yet patient-based payment often receives little prioritization

when revenue cycle leadership examines opportunities for

improving financial performance. “Typically the healthcare

industry acknowledges that collecting self-pay balances

from patients is an issue. But we don’t treat that population

as a payer source. We don’t treat it as part of our business.

We view it more as a part of the business we can’t afford,”

says Kaycee Orman, executive director of revenue cycle

services for CHRISTUS Health .

That mindset should be changing, Orman believes,

as healthcare organizations continue to see more and

more self-pay patients, as well as patients who have

high co-payments or deductibles, and as they struggle

to find ways to manage the collection of receivables

from these patients.

A National Trend

Nationwide, more than 83 percent of 46 healthcare

organizations surveyed reported increases in uninsured/

underinsured patients over the past 12 months. According

to TransUnion’s credit risk metric, growing ranks of

patients are less capable of paying off debt in a timely

manner. Credit risk is a weighted average probability

that consumers in a given region will take 90 days or

more to pay on a debt as compared with consumers in

the nation as a whole.

At the beginning of the current recession, credit risk as

measured by TransUnion’s metric was 118.38. At the end

of 2009, it was 129.67. This 9.54 percent increase is far

higher than the increase in 4.34 percent debt risk that

occurred during the 2001 recession. The likelihood that

a consumer will be 90 or more days delinquent on any

credit obligation is at an all-time high.a

Healthcare organizations may start taking a new look

at uninsured and underinsured patients, with an eye

toward helping patient eligibility vendors do a better

job of identifying patients who may qualify for assistance.

Success, however, is achieved when the provider has

objectives set before the engagement starts. Priorities

such as standards to meet, benchmarking, and reporting

requirements are crucial. Otherwise, “When you ask a

facility, ‘How is your eligibility vendor doing?’, you get a

‘Well, OK, I guess’ response,” Orman says.

Assessing Performance

Revenue cycle leadership decided to take a close look at

the services that patient eligibility vendors were providing

for self-pay patients at CHRISTUS Health. “We wanted to

know how much money we were potentially leaving on

the table and how we could do a better job of screening

for eligibility coverage,” Orman says.

According to an assessment, CHRISTUS Health was

capturing only a portion of its self-pay revenue for 2010.

Almost half of the self-pay patients were being seen in an

outpatient setting, but there was almost no outpatient

eligibility screening. Yet Orman estimates that redesigned

front-end eligibility and financial screening processes that

focus on self-pay patients, regardless of their point of entry

into the healthcare system, could yield a significant net

benefit opportunity in the $3 million to $5 million range.

Orman is currently drilling down into the details of the

findings from the self-pay balance assessment to deter-

mine what more can be done. “We know there can be a

more structured approach.”

a TransUnion: Latest recession negatively impacting healthcare organization balance sheets more than 2001 economic recession. TransUnion, April 13, 2010.


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September 2010 HFMA Educational ReportCopyright 2010 Healthcare Financial Management Association All rights reserved.

For reprints contact 1-800-252-HFMA, ext. 2.

This published piece is provided solely for informational purposes. HFMA does not endorse the published material or warrant or guarantee its accuracy. The statements and opinions by participants are those of the participants and not those of HFMA. References to commercial manufacturers, vendors, products, or services that may appear do not constitute endorsements by HFMA.

patients by physician, procedure, and diagnosis and determine

financial status as well as opportunities to offer financial

assistance before the patient appears,” Messina says.

At the same time, the system will be able to check patients’

eligibility for insurance coverage prior to service. “Right now

for our outpatient procedures, we have to check for eligibility

at the time of service,” she says. “With the new system, we

will have more streamlined workflow for all the different

types of processes.”

Improving financial assistance screening. Kaycee Orman,

executive director of revenue cycle services for Texas-based

CHRISTUS Health, a not-for-profit healthcare system with

more than 40 hospitals in multiple states and Mexico, is

exploring automated tools that are designed to improve

screening for charity care or payment assistance, including

Payment Assistance Rank Order (PARO), which was devel-

oped for Catholic Healthcare West, San Francisco.

Unlike existing credit scoring systems that use collection and

credit scores to analyze the likelihood that a patient can repay

debt, PARO is based on the patient’s ability to pay. On the

basis of aggregate data from 9,000 sources of historical financial

assistant information in 2 billion records as well as U.S. Census

and other public data sources, PARO assigns a numeric value

that reflects a patient’s liquidity position. As such, it indicates

the degree to which a patient is in financial need. “This does

not pull a patient’s credit report to see how much debt and

available credit they have and then determine whether they

are eligible for charity care or they can put the healthcare

bill on their credit card. This is different type of scoring that

is not tied to credit ratings,” Orman explains.

PARO simplifies the application process for charity care or

financial assistance by eliminating the need for patients to

gather multiple pieces of documentation and complete often

complicated forms. It also is more than twice as effective as

traditional credit scoring methods in finding patients who

meet charity care or financial assistance requirements,

according to Catholic Healthcare West.

Tracking collection performance. CHRISTUS Health has

installed quality assurance tools that measure collection

performance in each of its six hospitals. “We’re not talking

about the total amount of money that is collected at the

time of service. The metric we assess at the time of service

is the amount collected as a percentage of the potential.

Areas of Opportunity for Reform-Era SuccessAs healthcare reform alters the coverage environment,

many experts predict continued growth of consumer

insurance options that include high coinsurance and

deductibles.

Strategies for addressing patient payment vary.

Some include significant process shifts or technology

investments while others entail little more than

improving methods of communication. Regardless,

key areas of opportunity for improving patient

payment often include:➔➔ Enhancing estimates of patient financial

obligation and automating as many supporting

processes as possible.

➔➔ Ensuring patient financial communications are

reader-friendly, with an emphasis on establishing

expectations for the patient’s response.

➔➔ Offering convenient business office hours and

providing multiple means for receiving patient

payment, including online.

➔➔ Educating patient access staff on the importance of

point-of-service cash collection and role-playing

communications.

➔➔ Strengthening financial assistance eligibility screening.

➔➔ Prioritizing back-end collection efforts, including

examination of payment likelihood.

➔➔ Benchmarking revenue cycle performance to

identify and address potential challenges close to

time of occurrence.


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O u R S P O N S O R S P E A k S

Taking your Revenue Cycle Performance to the Next LevelNeil Hunn, CFO and president, Revenue Cycle Technology, MedAssets, discusses strategies for optimizing

revenue cycle performance in an environment with shifting payment dynamics.

Q How do you know whether your revenue cycle is performing at the level needed to

improve your margins?

AAs you prepare to access the impacts of future

reimbursement models, you also need to

validate that your current revenue cycle is performing

effectively. The key to managing your margins is

ensuring your organization is accurately paid for every

patient. Best-performing organizations use business

rules and workflow to automate every step of accounts

receivables management.

Best practice processes:

➔➔ Secure current patient and payer liability

➔➔ Capture appropriate charges

➔➔ Submit an accurate and compliant bill

➔➔ Ensure you are paid correctly by all payers

From the time the patient procedure is scheduled to

when the accounts receivable is paid and cash posted,

your revenue cycle processes need to be in alignment to

secure appropriate reimbursement. Identifying and calcu-

lating appropriate patient financial liability pre-service

and at time-of-service is critical to collecting accurate

point-of-service collections to improve margin, as well as

patient satisfaction.

Accurate charge capture and defensible pricing are

fundamental revenue cycle processes that require

diligence in maintaining regulatory compliance, charge

integrity, and revenue optimization across your health

system. Best practice processes include routine alignment

of your chargemaster to an industry standard, validating

your charges to your item master and closed receipts

file to ensure all charges are captured, annual review of

prices to ensure competitiveness, as well as a consistent

mark-up policy and an automated daily audit of itemized

bills to ensure billing compliance and transparency.

Next ensure your billing processes achieve minimal

rework and payment accuracy through automation of

accurate bill submission for payer compliance. Timely

management and automated workflow of all billing and

payment exceptions is critical to capturing all net revenue

contractually owed to you. Another key component of

achieving your margin objectives is a comprehensive

contract management system that can accurately price all

components of your negotiated contracts to automatically

identify payment accuracy, so underpayments and denials

can be resolved immediately and consistently.

With automated business process management as a key

to future financial sustainability, there are opportunities

everywhere. Even today, the automation of processes

such as bill submission and calculating secondary payer

liability will help you capture net revenue. Take action

now and ensure your revenue cycle is performing as it

should to secure your margin for the future.

Depending on the area of registration, that metric can be

as high as 50 percent in an inpatient/outpatient setting.

In the ED, the goal is 30 percent,” Orman says.

The entire CHRISTUS Health system is transitioning toward

a set of metrics that may be more precise in measuring

revenue cycle performance than conventional assessments.

“Traditional metrics do not necessarily present a good

picture of the revenue cycle. For example, cash as a percent

of net revenue is a good indicator of your net revenue 30 days

ago, but that’s not your true net just yet, because there is a

lot of noise in that number. So we look at cash as a percent

of net revenue 120 days ago,” Orman explains.

By using that information to flag problems and find out why

accounts are not paying within the first 30, 60, and 90 days,

one of CHRISTUS Health’s regions has improved collections

from $36 million to more than $40 million a month.

Source: MedAssets.


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About HFMA Educational Reports

HFMA is the nation’s leading mem-

bership organization for more than

35,000 healthcare financial manage-

ment professionals employed by

hospitals, integrated delivery systems, and other

organizations. HFMA’s purpose is to define, realize,

and advance the financial management of health

care. HFMA Educational Reports are funded through

sponsorships with leading solution providers. For

more information, call 1-800-252-HFMA, ext. 330.

Readying the Revenue Cycle for Tomorrow’s Challenges

The downstream effects of healthcare reform law are just

beginning to be felt at hospitals and health systems. As

financial executives and managers prepare for the coming

surge, they will need to watch for challenges that erode

revenue cycle performance.

One of these challenges is inadequate attention to

documentation by clinical professionals. “What’s happening

with healthcare reform and RACs [Recovery Audit Contractor

programs] all comes down to documentation and under-

standing the billing rules,” says Roberge. “Not a day goes

by without at least one physician or nurse saying, ‘I’m not

here to worry about charges.’ But everyone has to recognize

the importance of the revenue cycle, and start appreciating

that everyone who touches a patient between admission

and discharge plays a role. That awareness needs to be driven

by the clinical leadership team,” Roberge adds.

Also a challenge in a post-reform era is a highly restrictive

charity care policy. At many hospitals, deserving patients are

challenged with completing overly complex or excessive

application paperwork and documentation requirements.

“You need to have a flexible charity care policy that can be

easily administered on the front end,” says Orman.

In addition, many providers haven’t yet taken time to

deeply scrutinize what their eligibility vendors will need

to do. “You need to understand what your eligibility

services currently are so you can strengthen them and

MedAssets delivers proven results with spend management and revenue cycle management solutions to improve

margins, cash flow, and operational efficiency. Our best-in-class technologies and expertise increase net patient

revenue by 1-3 percent and decrease supply costs by 3-10 percent, resulting in more than $1 billion attributed to

financial improvement. Visit www.medassets.com.

become more structured,” Orman says. When CHRISTUS

Health analyzed its eligibility vendors recently, it found

several areas for improvement, including the need for

better screening in the outpatient setting, additional

ED coverage, and improved Qualified Medicare

Beneficiary screening.

Perhaps most important in the face of the uncertainty of

healthcare reform, providers need to be flexible and resilient.

“Providers need to have a revenue cycle team or committee

to look into every aspect of the revenue cycle so they can

make changes, protect their revenue, make sure they are

getting paid for the service they are providing, and keep

pace with changes as they happen,” Messina says.

It’s a matter of communication and coordination, agrees

Roberge. “You have to form teams and committees to get

everyone on the same page and understand that, with health-

care reform, things are going to change quickly,” he says.

“And everyone has to be working toward the same goal.”

MedAssets® is a registered trademark of MedAssets, Inc.



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Measure:

Aged A/R as a % of Billed A/R by Payer Group

Purpose:

Trending indicator of receivable collectability by payer group

Value:

Indicates revenue cycle’s ability to liquidate A/R by payer group

Equation:

Billed Payer Group by Aging (>30, >60, >90, >120 days)

Total Billed A/R by payer group

SM

Measure:

Days in Final Billed Not Submitted to Payer (FBNS)

Purpose:

Trending indicator of claims impacted by payer/regulatory edits within claims processing system

Value:

Track the impact of internal/external requirements to clean claim production, which impacts positive cash flow

Equation:

Gross dollars in FBNS

Average Daily Gross Revenue

Created by and for healthcare leaders, HFMA’s MAP gives you the tools you need to Measure performance Apply evidence-based strategies for improvement Perform—and be recognized for your success

For the first time, MAP Keys define the critical indicators of revenue cycle performance in clear, unbiased terms. MAP Keys ensure consistent reporting across institutions, allowing users to track progress against goals and compare perfor-mance to peer groups and to the industry as a whole.

www.hfma.org/mapkeys

— 44 —™

Measure:

Days in Total Discharged Not Final Billed (DNFB)

Purpose:

Trending indicator of claims generation process

Value:

Indicates revenue cycle performance and can identify perfor-mance issues impacting cash flow

Equation:

Gross Days in A/R (Not Final Billed)


Measure:

Days in Total Discharged Not Submitted to Payer (DNSP)

Purpose:

Trending indicator of total claims generation and submission process

Value:

Indicates revenue cycle performance and can identify perfor-mance issues impacting cash flow

Equation:

Gross Dollars in DNFB + Gross Dollars in FBNS


Measure:

Late Charges as % of Total Charges

Purpose:

Measure of revenue capture efficiency

Value:

Identify opportunities to improve revenue capture, reduce unnecessary cost, enhance compliance, and accelerate cash flow

Equation:

Charges with post date greater than 3 days from last service date

Total gross charges

Measure:

Initial Denial Rate – Zero Pay

Purpose:

Trending indicator of % claims not paid.

Value:

Indicates provider’s ability to comply with payer requirements and payer’s ability to accurately pay the claim

Equation:

Number of zero paid claims denied

Number of total claims remitted

Measure:

Initial Denial Rate - Partial Pay

Purpose:

Trending indicator of % claims partially paid

Value:

Indicates provider’s ability to comply with payer requirements and payer’s ability to accurately pay the claim

Equation:

Number of partially paid claims denied

Number of total claims remitted

— 45 —

SM

Measure:

Denials Overturned by Appeal

Purpose:

Trending indicator of hospital’s success in managing the appeal process

Value:

Indicates opportunities for payer and provider process improvement and improves cash flow

Equation:

Number of appealed claims paid

Total number of claims appealed and finalized or closed

Measure:

Net Days Revenue in Credit Balance

Purpose:

Trending indicator to accurately report account values, ensure compliance with regulatory requirements, and moni-tor overall payment system effectiveness

Value:

Indicates whether credit balances are being managed to appro-priate levels and are compliant to regulatory requirements

Equation:

Dollars in Credit Balance

Average Daily Net Patient Services Revenue

Measure:

Preregistration Rate

Purpose:

Trending indicator that patient access processes are timely, accurate, and efficient

Value:

Indicates revenue cycle efficiency and effectiveness

Equation:

Number of patient encounters preregistered

Number of scheduled patient encounters

Measure:

Insurance Verification Rate

Purpose:

Trending indicator that patient access functions are timely, accurate, and efficient

Value:

Indicates revenue cycle process efficiency and effectiveness

Equation:

Total number of verified encounters

Total number of registered encounters

— 46 —

SM

Measure:

Service Authorization Rate

Purpose:

Trending indicator that patient access functions are timely, accurate, and efficient

Value:

Indicates revenue cycle process efficiency and effectiveness

Equation:

Number of encounters authorized

Number of encounters requiring authorization

Measure:

Net Days in Accounts Receivable (A/R)

Purpose:

Trending indicator of overall A/R performance

Value:

Indicates revenue cycle efficiency

Equation:

Net A/R

Average Daily Net Patient Service Revenue

Measure:

Aged Accounts Receivable (A/R) as a Percentage of Billed A/R

Purpose:

Trending indicator of receivable collectibility

Value:

Indicates revenue cycle’s ability to liquidate A/R

Equation:

>30, >60, >90, >120 days

Total Billed A/R

Measure:

Point-of-Service (POS) Cash Collections

Purpose:

Trending indicator of point-of-service collection efforts

Value:

Indicates potential exposure to bad debt, accelerates cash collections, and can reduce collection costs

Equation:

POS Payments

Total Patient Cash Collected

— 4 7 —

SM

Measure:

Cost to Collect

Purpose:

Trending indicator of operational performance

Value:

Indicates the efficiency and productivity of revenue cycle (RC) process

Equation:

Total RC Cost

Total Cash Collected

Measure:

Cash Collection as a Percentage of Adjusted Net Patient Services Revenue

Purpose:

Trending indicator of revenue cycle to convert net patient services revenue to cash

Value:

Indicates fiscal integrity/financial health of the organization

Equation:

Total Cash Collected

Average Monthly Net Revenue

Measure:

Bad Debt

Purpose:

Trending indicator of the effectiveness of self-pay collection efforts and financial counseling

Value:

Indicates organization’s ability to collect self-pay accounts and identify payer sources for those who can’t meet financial obligations

Equation:

Bad Debt Write-Off

Gross Patient Service Revenue

Measure:

Charity Care

Purpose:

Trending indicator of local ability to pay

Value:

Indicates services provided to patients deemed unable to pay

Equation:

Charity Care Write-Off

Gross Patient Service Revenue

— 48 —

SM

strategies for revenue cycle success

by jeni williams

In an era of healthcare reform, excellence across all areas of revenue

cycle operations is critical to a hospital’s success. Here, winners of

HFMA’s MAP Award for High Performance in Revenue Cycle share

their strategies for performance excellence.

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As healthcare reform leads to significant changes across the

industry, achieving optimal performance in revenue cycle opera-

tions has never been more important for hospitals.

“In an environment of healthcare reform, we’re going to need

to drive toward excellence,” Richard L. Clarke, DHA, FHFMA,

HFMA President and CEO, told attendees of HFMA’s ANI: The

Healthcare Finance Conference in June. HFMA announced its

MAP initiative and the 2010 MAP Award winners at ANI.

“The status quo and incremental change will not prepare us

for the drastic changes in patient access, insurance, and payment

coming our way,” Clarke says. “To thrive, we will need to provide

high-quality care and service at low cost. And we will need to

ensure that our revenue cycles are as efficient and productive

as possible.”

In 2009, HFMA created the MAP Award for High

Performance in Revenue Cycle to honor hospitals that achieve

revenue cycle excellence. MAP Award winners excel in

meeting key benchmarks for success, as established through

HFMA’s MAP initiative while adhering to the principles

outlined by HFMA’s PATIENT FRIENDLY BILLING® project.

The award is sponsored by 3M Health Information Systems.

Here, three MAP Award-winning hospitals share the

specific strategies and tactics that made their organizations

high performers—and what your organization can do

to enhance revenue cycle performance.

This award is an annual award recog-nizing healthcare organizations that achieve excellence in the revenue cycle. Applications for the third-annual award will be available in early 2011.

Map Keys are defining key indicators of revenue cycle performance. Using MAP Keys, healthcare finance professionals can improve business intelligence, strengthen revenue cycle management, and decide—based on industry-created metrics—where to focus for improvement.

The MAP App is a tool being piloted for tracking a provider’s performance throughout the revenue cycle and comparing performance with that of other organizations. The MAP App also offers tips on evolving best practices and includes a community discussion forum for airing common concerns. HFMA plans to roll out the tool for general use later this year.

The MAP Event will bring together the best ideas on how to improve revenue cycle performance. A MAP event will be held Nov. 7-9 in San Diego; more information is available at www.hfma.org/mapevent.

HFMA’s MAP initiative gives providers the tools they need to measure revenue cycle performance, apply evidence-based strategies for improve-ment, and perform to the highest standards of revenue cycle excellence. HFMA’s MAP initiative features the following.

For more information

about HFMA’s MAP initiative,

visit www.hfma.org/map.

HFMA’s MAP Initiative: Taking a Closer Look

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Strategies for a More Collaborative Revenue CycleSeven years ago, Saint Francis Hospital in Tulsa, Okla., undertook an initiative to significantly overhaul its revenue cycle operations.

At that time, the hospital relied on four different IT systems for

revenue cycle management. The need for improved communication

between front-end and back-end revenue cycle staff at Saint Francis

had become increasingly clear, and the hospital’s days in accounts

receivable (A/R), which were in the mid-40s, were higher than the

organization would have liked. Additionally, Saint Francis sought to

implement new tools that would enhance insurance verification.

“We really imploded our revenue cycle operations to make

them more efficient and much more collaborative,” says Eric Schick,

vice president of finance for Saint Francis Hospital. “We studied our

revenue cycle from the front end to the back, and ran dry scenarios

to determine where areas of improvement existed. Through that

process, we determined that there were some processes that could

be shifted from the back end to the front end of the revenue cycle.

We also made the decision to create a centralized scheduling

department and prearrival department.”

One of the first challenges Saint Francis’ revenue cycle depart-

ment tackled was the need to increase collaboration between front-

end and back-end revenue cycle staff. “At that time, the front-end

staff really didn’t connect with the back-end staff; they were both

in separate worlds,” Schick says. He and Renee Edwards, director

of patient financial services, began to hold meetings with staff from

both areas to show them how their work is connected and the ways

in which their efforts are integral to the performance of the depart-

ment as a whole. “They began to understand that they are one

team—that they succeed together and that they fail together.”

When Saint Francis implemented new software and tools for

revenue cycle management, the hospital trained its front-end

revenue cycle staff in back-end processes, and vice versa. “This

helps front-end and back-end staff understand each other’s worlds.

It also increases collaboration among the revenue cycle team,”

Schick says. Saint Francis also hired two full-time and one part-time

trainer for the department, with training programs held monthly

for new staff and quarterly for staff who desire or need increased

education in a particular area.

Saint Francis measures performance against metrics such as

days in A/R; aged A/R as a percentage of billed A/R by payer,

which enables the health system to monitor its partnership with man-

aged care payers; days in discharged not final billed (DNFB), with

a DNFB goal of four days or less; point-of-service cash collections;

insurance verification rate; and service authorization rate. When

performance falls below expectations, revenue cycle leaders discuss

the issues with the directors of specific areas or with individual

employees, when appropriate, and develop plans for improvement.

And when a claim is rejected, the claim is sent back to the staff

person who originally made the error to be corrected. “This helps

the person who made the error to learn from it,” Edwards says.

“We’re a very productivity driven system,” Schick says. “For

example, we count transaction codes on the back end and look

at the number of claims that are processed to make sure staff are

meeting their monthly targets. Over the past year and a half, we’ve

also paid increased attention to the intricate role that our medical

records department plays in revenue cycle performance, and have

worked with medical records staff and physicians to ensure that

charts are completed in a timely manner. It’s important for physicians

and medical records staff to recognize that when DNFB spikes from

three days to seven days for a period of 60 days, then 60 days from

now, our organization is going to have trouble meeting our cash

goals, because that increase in DNFB days will have a domino effect

throughout the revenue cycle.”

The hospital’s focus on tightening its revenue cycle operations

has paid off. Saint Francis has dramatically reduced its days in A/R,

from the low 40s in late 2008 to the mid-20s today, and its days

in total DNFB measured just 3.42 in February 2010, when the

hospital’s MAP Award application was submitted. Now, the hospital

is working with managed care payers on issues that have caused

delays in processing claims. Ultimately, Saint Francis’ efforts in this

area will lead to claims being paid more quickly.

“Our efforts to improve revenue cycle operations have really

given us the capacity to move our performance to the next level,”

Schick says.

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Using Data to Drive Revenue Cycle PerformanceAt Riverside Methodist Hospital in Columbus, Ohio, one of five OhioHealth facilities, an atmosphere of teamwork among the health system’s revenue cycle departments has helped to propel the hospital’s revenue cycle performance.

Several years ago, OhioHealth began to consolidate its business

office operations as a new IT system was introduced. The health

system also brought its patient access, health information manage-

ment, and central business office operations under the leadership

of the health system’s vice president of revenue cycle, who reports

to OhioHealth’s corporate CFO.

Weekly, OhioHealth’s revenue cycle leadership team meets

to discuss challenges, results, projects, training, and resources.

Monthly, OhioHealth’s revenue cycle leaders, hospital CFOs, and

other key finance representatives meet to review results and discuss

action plans. Cross-departmental revenue cycle teams meet at least

monthly, and targeted revenue cycle improvement teams meet as

frequently as needed. Additionally, OhioHealth hired IT personnel

who work solely with the revenue cycle team, as well as full-time

trainers who develop orientation and continuing education

sessions for staff.

This atmosphere of “systemness” among revenue cycle depart-

ments throughout the health system has enhanced OhioHealth’s

ability to effect significant improvements in its revenue cycle opera-

tions. At Riverside Methodist Hospital, aged A/R as a percentage

of billed A/R over 30 days is just 11.1 percent; over 60 days, 7.4

percent; and over 90 days, 4.5 percent. Days in total DNFB were

4.87 in February 2010, when the hospital’s MAP Award application

was submitted, and cash collection as a percentage of adjusted net

patient services revenue is 113.1 percent. And 80 percent of River-

side Methodist Hospital’s customers would recommend the hospital.

“One of the keys to our success in revenue cycle performance

is that all components of the revenue cycle report to finance,” says

Jane Berkebile, vice president, revenue cycle for OhioHealth. “It’s

very hard to achieve the same level of results in revenue cycle per-

formance if staff in health information management or patient ac-

cess don’t report to the same leaders as your billing staff. All revenue

cycle staff need to be on the same train, going in the same direction.

If you don’t have that level of systemness, when there are problems,

you’ll have people pointing fingers at each other rather than working

together toward a solution.”

OhioHealth also relies on data to measure and drive revenue

cycle performance at facilities such as Riverside Methodist Hospital.

The health system recently implemented an automated quality as-

surance system for registrars that monitors all registrations, includes

more than 200 real-time edits, returns errors to registrars to cor-

rect, and provides detailed error reporting and quality assurance

data down to the individual registrar. “Following implementation of

this system, our overall percentage of returned mail dropped from

2 percent to 1 percent, and our clean claim rate increased,”

Berkebile says.

Data from revenue cycle operations also are used to set goals

for revenue cycle staff and to measure progress; results are regularly

shared with staff. “Last year we had significant targets around patient

cash and around write-offs. They were stretch targets for us—and

we exceeded those targets,” Berkebile says. “Our point-of-service

[POS] collection goals are developed by facility and down to the

department level based upon the percentage of opportunity. We

provide feedback to individual registrars and financial counselors,

comparing their individual collections with the target goal.” The

increased focus on POS collections has paid off for OhioHealth

and Riverside Methodist. In the previous fiscal year, POS telephone

collections at time of preregistration averaged $180,000 per

month. With focused efforts and targets, this year, that average has

increased to $370,000 per month. “This is just one component of a

very successful POS program that increased POS collections year

over year by 21 percent,” Berkebile says.

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One of the keys to our success in revenue cycle performance is that all components of the revenue cycle report to finance.” Jane Berkebile, vice president, revenue cycle, OhioHealth

surance system for registrars that monitors all registrations, includes

To nearly all patients receiving an electiveprocedure (75% or more of all elective procedures)

To some patients (below 75% of all patients)

At scheduling upon request

At registration upon request

At time of service upon request

To What Extent Do You ProvideEstimates of Patient’s Financial Obligations Prior to Rendering Services?

x

x

x x x

x x x

x x x

The Valley HospitalRidgewood, N.J.

Saint Francis HospitalTulsa, Okla.

Riverside Methodist HospitalColumbus, Ohio

Estimating Patient Financial Obligations Prior to Service

R

Net Days in A/R 23.2 36.8 35.2

Operating Margin 10.3% 6.0% 7.7%

Cash Collection as a Percentage ofAdjusted Net Patient Services Revenue

105.7% 100.5% 113.1%

Total Bad Debt Write-Off 4.1% 1.02% 1.4%

Total Charity Care Write-Off 3.7% 1.59% 4.29%

Days in Total Discharged Not Final Billed 3.42 5.6 4.87

Patient Would Recommend 82% 79% 80%

The Valley HospitalRidgewood, N.J.

Saint Francis HospitalTulsa, Okla.

Riverside Methodist HospitalColumbus, Ohio

A Snapshot of Award-winning Performance

*Exhibits reflect responses provided by the organizations in February 2010, when applications for MAP Award were submitted.

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HFMA’s MAP Award for High Performance in Revenue Cycle, sponsored by 3M Health Information Systems, recognizes healthcare organizations that are distinctive, innovative, and effective in revenue cycle process improvements and patient satisfaction. In addition, it recognizes sustainable financial performance that serves the mission of the organization. For more information, visit www.hfma.org/mapaward.

About HFMA’s MAP Award

The following organizations received HFMA’s MAP Award for Revenue Cycle Excellence in 2010.

MAP Award Winners

• Denials Overturned by Appeal • Net Days Revenue in Credit Balance • Preregistration Rate • Insurance Verification Rate • Service Authorization Rate • Net Days in Accounts Receivable • Aged A/R as a Percentage of Billed A/R

The following 19 KPIs comprise the MAP Keys:• Aged A/R as a % of Billed A/R by Payer Group • Days in Final Billed Not Submitted to Payer • Days in Total Discharged Not Submitted to Payer • Late Charges as % of Total Charges • Initial Denial Rate—Zero Pay • Initial Denial Rate—Partial Pay

• Point-of-Service Cash Collections • Cost to Collect • Cash Collection as a Percentage of Adjusted Net Patient Services Revenue • Bad Debt • Charity Care • Days in Total Discharged Not Final Billed

HFMA recently developed a common set of revenue cycle key performance indicators (KPIs) known as MAP Keys in collaboration with multiple stakeholders. The MAP Keys promote the consistent reporting practices and peer-to-peer comparisons needed to achieve significant revenue cycle performance improvement. Embracing the MAP Keys for tracking revenue cycle performance can help hospitals identify revenue cycle performance trends and pro-actively prioritize and address areas in need of attention.

Key Performance Indicators for Tracking Performance

• Baylor Medical Center at Irving, part of Baylor Health Care System, Irving, Texas• CHRISTUS Schumpert Health System, part of CHRISTUS Health, Shreveport, La.• Hospital of the University of Pennsylvania, part of the University of Pennsylvania Health System, Philadelphia• Riverside Methodist Hospital, part of OhioHealth, Columbus, Ohio• Danbury Hospital, part of Danbury Health System, Danbury, Conn.• Saint Francis Hospital, part of Saint Francis Health System, Tulsa, Okla.• The Valley Hospital, part of Valley Health System, Ridgewood, N.J.• Princeton Medical Center, part of Baptist Health System, Birmingham, Ala.• Geisinger Medical Center, Danville, Pa.• Brookwood Medical Center, part of Tenet Health System, Birmingham, Ala.

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The collaborative approach to revenue cycle performance

improvement has pushed revenue cycle performance to a higher

level at The Valley Hospital. Department by department, operating

margins have increased, from 2.1 percent in 2000 to 3.5 percent

in 2009. Managers’ yearly goals are tied in part to the hospital’s

financial performance, so that all hospital leaders have a stake in

the hospital’s revenue cycle performance. Monthly reports that

compare each department’s performance with its target goals keep

departments on track. Notably, the hospital’s patient satisfaction

scores, quality indicators, and employee satisfaction have demon-

strated improvement.

“I think the continual feedback we provide for managers and

employees throughout the hospital helps them to participate in

working toward the hospital’s revenue cycle goals,” Klutkowski says.

It’s important to take the time to sit down with individual departments

and talk with them regarding their concerns, because every depart-

ment is different. For example, what’s going on in radiation therapy?

What problems is the department experiencing with managed care

contracts? What are the concerns of leaders and key stakeholders

in the department? It’s also important to involve medical records in

these discussions, where appropriate, so you can really concentrate

on any coding issues that exist and help the department take steps

toward improvement.”

One of the keys to effecting change in individual departments

is to include all the appropriate stakeholders in discussions, not

just the department leaders. “Often, revenue cycle leaders choose

to meet with the department director when in fact a staff member

might have more influence in improving the department’s revenue

cycle performance,” Klutkowski says. “In some instances, including

an IT person in discussions with a department also can be key. Bring

payment records with you—most departments have no idea what

they actually get paid. Show the departments what they charged in

relation to what Medicare and insurance companies actually paid,

without saying, ‘You missed a charge.’ Information such as this will

be an eye-opener for leaders and staff and will help them to better

focus on the actions needed for improvement.”

We began to offer revenue cycle educa-tion to everyone throughout the hospital—specifics that really mattered to their department—and provided the support to helppeople improve performance as it relates to the revenue cycle.” Bill Klutkowski, CPA, assistant vice

president of finance, The Valley Hospital

Accelerating Revenue Cycle Improvement through a Change in CultureAt The Valley Hospital in Ridgewood, N.J., a change in the hospital’s culture and the mindset of staff have fueled significant improvements in revenue cycle performance.

We’ve always been strong in revenue cycle performance, but not

as strong as we are today,” says Bill Klutkowski, CPA, assistant vice

president of finance for the hospital. “We weren’t struggling for cash,

but we knew our revenue cycle performance could be even better.

The challenge for us was how to go from ‘good’ to ‘great.’”

The Valley Hospital began its quest toward excellence in

revenue cycle performance in 2000 by educating all employees

regarding their contributions to the hospital’s financial performance.

Everything changed with the introduction of Medicare’s ambula-

tory payment classification system. Edits and payments were all in

turmoil. We learned something new every day and realized quickly

that we couldn’t do it alone. We needed department head involve-

ment and accountability to the revenue cycle,” Klutkowski says.

“We began to offer revenue cycle education to everyone

throughout the hospital—specifics that really mattered to their

department—and provided the support to help people improve

performance as it relates to the revenue cycle. Our organization

also offers a leadership institute series for department leaders

three times a year, and we’ve given presentations to leaders that

address common budget issues, expense management, and various

aspects of the revenue cycle. When new managers join the

hospital, they meet with our director of budgets and reimbursement

staff to review their responsibilities. Each of these initiatives helps

to set targets and expectations related to revenue cycle

performance earlier.”

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Lessons Learned

Build the morale of your staff. The Valley Hospital in Ridge-

wood, N.J., created a “finance morale committee” to discuss issues

that could affect employee satisfaction and ways to boost the spirits

of staff. Each quarter, representatives who are chosen by their peers

plan events for the staff (the group once held a carnival for revenue

cycle staff in the hospital parking lot) as well as community service

activities, such as contributing to a compassion fund set up to help

hospital employees who are experiencing financial hardship.

“Finance is a very stressful environment; we’re all expected to

do more with less. It’s good to invest in the morale of your staff,” says

Josette Melillo, director, patient financial administration, for The

Valley Hospital. In 2009, employee satisfaction scores ranked in the

91st percentile for revenue cycle staff, with a mean score of 85.7

percent, 12.6 percentage points higher than in 2000.

Invest in continuing education for revenue cycle staff. MAP Award winners have dedicated trainers for their

revenue cycle departments. At Brookwood Medical Center in Bir-

mingham, Ala., trainers provide reeducation for staff who are strug-

gling and conduct mandatory education refreshers for the revenue

cycle team. “We also encourage our staff to obtain certification,”

says Doug Carter, CFO. “Staff who achieve certification receive an

increase in pay, so there is an incentive for them to meet this goal.”

At Saint Francis Hospital in Tulsa, Okla., where front-end staff

have been trained in back-end revenue cycle processes, and vice

versa, “Staff realize that they are one team, and that they succeed

together,” says Eric Schick, vice president of finance.

Meet regularly with managed care payers to address issues that are delaying processing of claims. Such meetings

have enabled Saint Francis Hospital to address problems with con-

tract enforcement and claims processing that are delaying payments

Move your organization’s revenue cycle performance to the

next level at HFMA’s MAP Event. The event will feature revenue

cycle leaders from high-performing hospitals, who will discuss

proven tactics for achieving revenue cycle excellence.

Learn Strategies for Transforming Your Hospital’s Revenue Cycle Performance

HFMA’s MAP Event, to be held Nov. 7-9 at the Coronado Island

Marriott Resort and Spa in San Diego, will offer interactive op-

portunities for participants to learn best practices for revenue cycle

performance. Additionally, the event will feature a tour of MAP

Award-winning Sharp Grossmont hospital and insight from keynote

speaker Quint Studer, who will discuss the importance of evidence-

based leadership

For more information, or to register, visit

www.hfma.org/mapevent.

to the hospital. “Because our revenue cycle is as tight as it is,

we’re able to pay attention to details such as why some claims aren’t

being paid quickly, and to dial down into those issues and address

them with payers,” Shick says. “It takes diligence, perseverance, and

a lot of data to effect change, but it can be accomplished. There are

a lot of other providers in our market who are benefiting from our

efforts in this area.”

Maintain a dedicated IT staff for revenue cycle. “I have

my own IS team that works solely on revenue cycle projects,” says

Jane Berkebile, vice president, revenue cycle, for OhioHealth. “This

allows us to move very quickly to resolve any issues with technology

within the revenue cycle.”

Celebrate successes. OhioHealth keeps a treasure chest

full of dollar-store items in each of its revenue cycle departments to

reward employees who reach certain targets. This year, the health

system also held a “Right Choice Awards” program to honor individ-

uals and teams who contributed to the health system’s revenue cycle

success. Staff at Saint Francis Hospital are treated to an afternoon

at the zoo or the movies to celebrate the achievement of significant

goals. “It’s important to let your staff know that they are doing a great

job and that their efforts are appreciated,” Schick says.

Recognize the efforts of other departments in the organization that contribute to the organization’s revenue cycle success. At The Valley Hospital, revenue cycle staff recently

showed their appreciation to employees in other departments by

inviting them to a “sweets party,” complete with a chocolate fountain.

You have to develop a good relationship with other departments

that contribute to your organization’s revenue cycle success,” says

Bill Klutkowski, assistant vice president of finance.

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HFMA’s MAP Application is the essential tool for improving revenue cycle performance. MAP App is a central component of HFMA’s MAP—a comprehensive initiative that defines the indicators for revenue cycle excellence, helps you track and improve performance, and honors excellence. Developed by and for industry leaders led by HFMA, MAP App lets you track perfor-mance throughout your revenue cycle, compare your results to peer groups and the industry, and identify proven strategies to achieve excellence. FEATURESHFMA MAP Keys provide standard indicators of revenue cycle excellence, vetted by industry experts led by HFMA.

Dashboard tracks your performance on MAP Keys and highlights trends.

Revenue Cycle Scorecard ranks your performance against your goals.

Aggregated user data yields monthly industry benchmarks and trends.

Case studies identify proven strategies of MAP Award winners and other top performers.

Monthly updates give you performance data that is timely, accurate and audited.

Alerts keep you on top of MAP Key performance changes.

BENEFITSBroad industry participation, standard metrics, and flexible tools let you see show how your performance compares to MAP Award winners, other system facilities, and your peer groups, as defined by HFMA categories or by your own criteria.

Comparisons enable you to spot leading or trailing performance, understand market changes, set attainable stretch goals or inspire application for the MAP Award honoring high performance.

Analysis tools let you tackle emerging problems at the source.

HFMA’s trusted content —expert advice, proven practices from top performers, news, training and analysis—helps you improve outcomes.

Peer-to-peer assistance and access to industry experts connect you to other successful users. Root cause analysis through powerful analytics and business intelligence.

TECHNICAL REQUIREMENTSWeb Browser (Internet Explorer, FireFox, Safari) High speed Internet connection Microsoft Excel Adobe PDF

the tool for revenue cycle excellenceSM

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START STRONGHome portal gives you an at-a-glance view of your performance and peer group comparisons, plus proven practices, industry discussions, expert advice, and industry news and research.

COMPARATIVE DATADashboard shows your performance by revenue cycle function (e.g. patient access, revenue integrity, claims adjudication and management). You can compare your performance against your system, against self-chosen peer groups, and against MAP Award winners recognized for high performance. Graphs let you isolate time ranges to pinpoint shifts, or zoom into MAP Key summaries for underlying data.

GEARED FOR RESULTSMAP Key Briefs provide snapshots of your performance on the indicators along with functionally rich comparisons, proven practices, ask the experts and relevant research—all aimed at helping you understand performance, fi nd opportunity, set strategy and get results.

learn more at hfma.org/mapSM

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Documents

Participants Guide.indd