Protecting your earned revenue - waakhfma.org · A migration to high deductible health plans offered by ... Patients are The New Payer ®, and the yield of patient revenue ... Reviewing

Protecting your earned revenue

MARCH 6, 2019

Medicare Reimbursement Optimization

Strategies for the 21st Century

Jonathan G. Wiik, MSHA, MBAPrincipal, Healthcare Strategy

TransUnion Healthcare

[email protected]

© 2018 TransUnion LLC All Rights Reserved | 2


• Understand the industry trends with uninsured and underinsured

• Understand how the uninsured and underinsured population impacts

Medicare reimbursement

• Optimize your revenue cycle through a coordinated strategy of

reimbursable bad debt, uncompensated care reimbursement, and

collection efforts to maximize revenue

• Review of a Case Study to demonstrate the impact of a coordinated

strategy between the business office and finance teams

Agenda

Traditional Revenue Cycle

Market Trends


For the first time since 2013, uncompensated care

increased by $2.6B in 2016, and remained flat in 2017

Source: AHA Jan 2019 Uncompensated Care Report

$36.1

$38.4

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

$0

$5

$10

$15

$20

$25

$30

$35

$40

$45

$50

Unin

sure

d R

ate

Uncom

pensate

d C

are

Uncompensated Care 1990-2017 ($B)


2018 uninsured rate by state

Notes

The majority of our health coverage topics are based on analysis of the Census Bureau’s American Community Survey (ACS) by the Kaiser Family Foundation. ACS includes a 1% sample of the US population and allows for precise state-level estimates. Please

note that in the past, health coverage data posted to this site had used the Current Population Survey. We have replaced all previously-posted data, including data for previous years, with data based on ACS.

The ACS asks respondents about their health insurance coverage at the time of the survey. Respondents may report having more than one type of coverage; however, individuals are sorted into only one category of insurance coverage.

A person reporting having Medicaid coverage and another type of coverage would be categorized as having Medicaid coverage in this analysis.

Data may not sum to totals due to rounding.


We know what uninsured is, but what is underinsured?

• Out-of-pocket costs, excluding premiums, over the prior 12 months are equal to

10 percent or more of household income; or

• Out-of-pocket costs, excluding premiums, are equal to 5 percent or more of

household income if income is under 200 percent of the federal poverty level; or

• Deductible is 5 percent or more of household income

Source: Commonwealth Fund – The problem of underinsurance and how rising deductibles make it worse


Source: Commonwealth Fund

https://www.commonwealthfund.org/sites/default/files/documents/___media_files_publications_issue_brief_2017_oct_collins_underinsured_biennial_ib.pdf

28% of adults who were insured all year were underinsured in

2016… a 22% increase from 2014-2016.


Uninsured versus Underinsured: A question of access and

affordability






A migration to high deductible health plans offered by

employers is growing considerably


Patients are The New Payer ®, and the yield of patient revenue

is at significant risk…

Sources: HFMA: https://www.hfma.org/Content.aspx?id=45784 ; Advisory Board: https://www.hfma.org/Content.aspx?id=45784; DarkDaily:https://www.darkdaily.com/because-of-expanded-numbers-of-

patients-with-high-deductible-health-plans-patients-are-now-responsible-for-30-of-hospital-revenues-920/ ; VisitPay: http://www.visitpay.com/wp-content/uploads/2017/11/visitpay-

patient_pay_crisis_whitepaper.pdf

https://www.hfma.org/Content.aspx?id=45784

https://www.hfma.org/Content.aspx?id=45784

https://www.darkdaily.com/because-of-expanded-numbers-of-patients-with-high-deductible-health-plans-patients-are-now-responsible-for-30-of-hospital-revenues-920/

http://www.visitpay.com/wp-content/uploads/2017/11/visitpay-patient_pay_crisis_whitepaper.pdf


Revenue leakage and market impacts are staggering

Sources :HCRIS, Black Book ; Accusttream; Meddata, Rev Cycle Intelligence

HFMA, HPS, TU proprietary TransUnion data

3%-5%

Percentage

of charges

never

posted,

which

equates to

$30-$50M

additional

revenue for a

$1B

organization

$8B

In cuts to

DSH

payments at

risk from

planned

federal DSH

reductions

(currently

delayed)

25%

Percentage

of claims

that are

denied,

according to a

GAO study

$3.7B

In Medicare

Bad Debt

from patients

not paying

their

deductibles

and co-

insurance

$25B

Dollars in

Medicare

Spend

related to

payment

integrity and

cost reporting


Underpayments

Medicare

– Combined underpayments were $68.8 billion in 2016.

– This includes a shortfall of $48.8 billion for Medicare and $20.0 billion for Medicaid.

– For every dollar spent by hospitals caring for patients in 2016, 87 and 88 cents were reimbursed under Medicaid and Medicare respectively

Commercial

– $69 billion spent nationally by providers on payer rules

– Over half (58%) of commercial claims deny initially (4% increase in denied claims from 2015-2016)

– 5% of average hospital NPR is LOST in underpayments ~ $2.5M for a mid size hospital

Sources: 1)AHA: https://www.aha.org/system/files/2018-01/medicaremedicaidunderpmt%202017.pdf, 2)Advisory Board:

https://static1.squarespace.com/static/554b97b8e4b01f8ee692d265/t/5a5947538165f53cdc4475d9/1515800410085/9.+Optimizing+AR+-+Beadle+Ryby.pdf, 3)MGMA

https://www.mgma.com/MGMA/media/files/fellowship%20papers/Prior-Authorization-Denial-Challenges-for-an-Integrated-Health-System-fellowship-paper.pdf?ext=.pdf

https://www.aha.org/system/files/2018-01/medicaremedicaidunderpmt%202017.pdf

https://static1.squarespace.com/static/554b97b8e4b01f8ee692d265/t/5a5947538165f53cdc4475d9/1515800410085/9.+Optimizing+AR+-+Beadle+Ryby.pdf

https://www.mgma.com/MGMA/media/files/fellowship%20papers/Prior-Authorization-Denial-Challenges-for-an-Integrated-Health-System-fellowship-paper.pdf?ext=.pdf


Will the public option plan help Washington?

Source: https://www.inlander.com/spokane/gov-jay-inslees-public-option-plan-to-reduce-health-care-costs-is-ambitious-and-untested/Content?oid=16086068

https://www.inlander.com/spokane/gov-jay-inslees-public-option-plan-to-reduce-health-care-costs-is-ambitious-and-untested/Content?oid=16086068


Will the public option plan help Washington?

Source: http://mynorthwest.com/1239973/inslee-pay-cascade-care-washington/?

“Cascade Care” has three targeted policy changes:

1. State backing: Leveraging the state’s purchasing power. The state already insures people

through its public employee program – that work can be leveraged to help Cascade Care.

2. Standardizing the plans so it’s easier for consumers to use them, which will lower out of

pocket costs. For example, the bronze, silver, and gold plans under Obamacare will

remain in effect and will be come standardized.

3. Capping rates: Having an upper limit to keep rates and costs down. The governor’s office

is proposing Medicare rates for this.

http://mynorthwest.com/1239973/inslee-pay-cascade-care-washington/

Innovative Revenue Cycle

What is working and why – Case study review


Case Study: Memorial Healthcare

Review prior year data for missed reimbursement opportunities

Project Started

First 30 Days

Project Work:

Day 31-90

Results:

Day 91

Project Objective

Identify additional

Medicare Bad Debt

reimbursement not

previously claimed

for Memorial

Healthcare System

facilities for FYEs

2009-2013

Data Gathered

▪ Hospital Patient

Accounting System

Data

▪ Detailed Medicare

PS&R

▪ State Paid Claims Data

▪ Outside Collection Data

▪ Previous Medicare Bad

Debt Logs

Process Steps

▪ Review analytics to

identify missed

opportunity to be

claimed via re-

openings

▪ Review analytics to

identify missed

opportunities because

of process

▪ Submit reopening

request to MAC

Internal

Meeting

▪ Discuss project

results

▪ Communicate steps

to improve process to

appropriate

stakeholders in

hospital system



Project results: Over $2.7M in total gross reimbursement found

Memorial Regional Hospital(FY 2009-2013)

Memorial Hospital West(FY 2010-2013)

Memorial Hospital Pembroke(FY 2010-2013)

Memorial Hospital Miramar(FY 2013)

Total Gross Reimbursement: $2,762,897

2009 2010 2011 2012 2013

$1,530,691

$735,433

$349,158

$147,615



Project results: Reimbursement rate increased by 26%

$0

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

$7,000,000

$8,000,000

$9,000,000

Memorial Regional Hospital(FY 2009-2013)

Memorial Hospital West(FY 2010-2013)

Memorial Hospital Pembroke(FY 2010-2013)

Memorial Hospital Miramar(FY 2013)

Percentage Increase in Medicare Bad Debt Reimbursement

Initial Medicare Bad Debt Filings Increase Identified by Project

25%

33%

27%

22%

Note: These are based on gross recovery amounts.

Actual recoveries would be subject to Medicare reductions of 35%.

Improvements represented $2M, which

equates to $1.3M in MCBD revenue



Several key process issues were identified as root causes of missed opportunity

Issue Overview

Lack of Coordination Between

Primary/Secondary Collection

Agencies

Primary collection agency had historically not forwarded accounts to the

secondary collection agency

Not All Accounts Sent to Collection

Agency

CMS requires Hospitals to follow internal collection policies as well as

make a reasonable collection effort for all outstanding

coinsurance/deductibles

Denied Medicaid Remittances not

Addressed (Out-of-State)

CMS requires that Medicaid is billed properly until a “Paid” remittance is

returned to the Hospital

Adjustment Prior to Medicaid Remit

Date

Potential contractual adjustment change to ensure date is post Medicaid

remittance date

Erroneously Included Fee

Reimbursed Amounts

These amounts are not allowable Bad Debt and must be removed from

submitted listings



Financial impact of deficient processes was significant

Note: This represents potential improvement in future periods if issues are addressed. Amounts are gross recovery amounts. Actual recoveries would be subject to Medicare

reductions of 35%.

$0

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

$3,500,000

$4,000,000

Coordination BetweenPrimary/SecondaryCollection Agencies

Never Sent to Agency Denied MedicaidRemittances

Adjustment Prior toMedicaid Remit Date

Erroneously Included FeeReimbursed Amounts

Potential Impact of Key Issues

Memorial Regional Memorial West Memorial Pembroke Memorial Miramar

$3,606,893

$3,002,401

$1,214,195 $1,150,642

$43,686



Action taken as a result of Case Study

Issue Action Taken to Improve Process

Lack of Coordination Between

Primary/Secondary Collection

Agencies

All agencies have been educated on process. A look back was

performed to ensure that all unpaid accounts placed with primary

agency were sent to secondary agency. Lastly, transfer and return

dates for all accounts were recorded in PAS.

Not All Accounts Sent to Collection

Agency

Reviewing all accounts that fit criteria to be sent to collections on regular

basis to ensure they are sent to collection agency and appropriately

returned.

Denied Medicaid Remittances not

Addressed (Out-of-State)

Analysis performed to identify cost of not being set up as a Medicaid

provider for out-of-state patients. Finance is evaluating strategy for those

states where the impact is significant.

Adjustment Prior to Medicaid Remit

Date

Instructed business office to write off accounts after Medicaid payments

are posted to the GL. Using software tool to track on an ongoing basis

as a safety net.

Erroneously Included Fee

Reimbursed Amounts

Using software tool to automatically identify and exclude fee reimbursed

revenue codes from amounts written off.


HiMSS TransUnion Press Release


• The study showed an increase Medicare Bad Debts recoveries for dual-eligible patients by as

much as 10% per year (according to TU data )

• Approximately $500k over a 3 year period for an average size community hospital:

• $375k from Medicaid Secondary

• $125k from Medicare Bad Debt

• 63% of all Medicare Bad Debt recoveries are tied to dual-eligible Medicare/Medicaid

patients (according to Healthcare Cost Report Information System data)

• Given Medicaid expansion, it’s imperative to actively identify patients who are Medicaid eligible

• Identifying Medicaid eligibility increases both Medicaid Secondary and Medicare Bad Debt

Recoveries – an area often overlooked in finance

• Deploying aligned tools and processes helps coordinate across functions and increase recoveries

Study highlights…

Preventing Revenue Leakage

Strategies to protect your earned revenue


SOURCE: JPM Key trends in healthcare patient payments

Industry trends…

• Often, providers also are calculating a propensity to pay score whether the patient

is insured or not

• High pre-service patient balances (i.e. Deductibles) or self-pay patients are key

areas to focus

• Transactions like credit score, mortgage balance inquiry, and more can help:

➢ Determine a patient’s propensity to pay

➢ Give insight into payment options

➢ Determine if a patient is a candidate for payment plans or charity care


Stratifying patient risk and payments

Identity Verification

▪ Prevent fraud

▪ Verify identity and protect PHI

▪ Validate address and demographic information

Insurance Discovery / Presumptive Charity

▪ Establish Coverage

▪ Balance their bad debt portfolio

▪ Re-classify accounts as charity

Propensity to Pay

▪ Prioritize high balance accounts

▪ Increase POS collections and cash flow

▪ Help patients truly in need and collect from those who can pay

Bad Debt

Payment

Charity

COLLECTIONS

Rapidly determine


The Bottom Line

30%

SELF-PAY ACCOUNTS

80% OF

COLLECTED

CASH

Critical to rapidly identify the accounts that will pay

— from both the patient and the payer

1-5% of self-pay accounts* written off to bad debt have billable

insurance coverage unknown to the

hospital or its vendors

30% of self-pay accounts will generate over 80% of cash collected*

*Transunion Proprietary Data


Getting the patients engaged as a consumer…

of healthcare providers are having trouble providing sufficient price

transparency for patients facing a growing financial responsibility

Three steps:

1. Assess eligibility to determine coverage and benefits

2. Educate the patient to the financial policy, payment options and financial

assistance programs

3. Offer cost estimates and push for full price transparency - increasing price

transparency can improve patient satisfaction and help patients with bill pay.

“By ensuring patients fully understand their financial responsibility, they can

better equip them to make decisions about care access. Ultimately, this may help

more patients get access to care that they can afford…

Healthcare organizations need to invest more time with patients in the front office,

estimating their cost of care and payment options in order to reduce questions and

delays in collecting post service”

Source: Porter research, Waystar. https://patientengagementhit.com/news/providers-struggle-with-patient-price-transparency-responsibility

63%

https://patientengagementhit.com/news/providers-struggle-with-patient-price-transparency-responsibility


Example Workflow – Self-Pay / High BAI After Discharge

Sample Self Pay / Patient High PBAI Workflow

SE

LF

-PA

Y /

HIG

H B

AI

Coverage

Found?

Patient Payment

collected?

NO

Done

Credit info

returned?

Probability of

financial aid?

Patient ability to

pay bills?

NO

Cascade to

Alternative Data

Model

YES

Probability of financial

aid? Propensity to

pay bills?

YES

No FA application required,

collection zero; write off account

to charity

Collect FA application, attempt to

collect any payment based on

sliding scale, or AGB

Collect 100% of payment, or

seek alternative care or payment

recovery options

Collect first payment and

establish payment plan over time

for 2-3 year term

MAYBE: Charity

Potential: FAP

FPL 201%-350%

LOW Score – Low

collections probability

YES: 100% Charity

No FA required: PE

FPL < 200%

Lowest Account Score

No collections

probability

NO: Not eligible for Charity

FPL > 500%

HIGH Recovery Score

Ask for full payment

NOT LIKELY:

Possible Charity

FPL 351%-500%

MODERATE Score

Partial Payments

NOYES

*Example provided for illustrative purposes and organizations should follow their unique Financial Assistance Policy(s)


CollectionEstimationVerificationEligibility

• Matrix

• Estimator

• P2P

• FPL

Proceed / document

Stop / escalate

• Insured /

Self Pay

• 270/271 EMR

• 3rd party

• Benefits

• Auth /

Referral /

Notification

• Med nec

• Insurance

Discovery

• Revenue

Assurance

• Insurance

and Patient

Payment

Optimization

Checklists and gates


Bridging the gap to higher reimbursement

Identify/ Quantify

Opportunity

Determine Root Cause

Develop Solutions

Establish Controls and

Measures

Align KPIs to Objectives


Benchmarking against peers

Understand potential opportunity by

comparing the percentage of Medicare

co-insurance and deductible dollars

claimed as bad debt vs. your hospital’s

Supplemental Security Income ratio

Benchmark your performance

against state averages,

indexed to another proxy

specific to the hospital’s

indigent patient mix to gauge

performance of your internal

team or your external

consultants


How is Your Underpayment Review?

1. Identifying difficult, hard-to-find correct insurers & policy numbers

2. Managing timing delays & changes in payer eligibility databases

3. Identifying correct payer for a specific service

4. Unique Medicare billing challenges

5. Accounts with no “meaningful” activity due to information gaps

6. Unique, atypical billing requirements

7. Zero balance accounts – either “paid” or written off to free care/charity allowances

8. Bad debt accounts for deductibles and copays – no activity but have secondary payer

9. Determining correct OP primary payer when multiple coverage exists

10. Billing system setup issues – incorrectly or not billing claims


Organizational challenges to best practices

Project-driven

Different environments produce conflicting goals and misaligned strategies

Process-driven

Chief Financial Officer

Director of PFS

Manager of Patient Accounts/Collections

Billing Staff and Collectors

Director of Reimbursement

Reimbursement Analysts

Business Office Finance Dept.


Achieving best practices requires partnership

Sell the opportunity

Use data to ensure buy-in

Collaborate with Business

Office to realize

opportunity

Finance

Quantify the available

opportunity:

Train staff on best

practices

Revise key processes

and KPIs

Enact controls and

measurement process

Business Office

Realize the available

opportunity:

CFO must drive departmental objectives, gain buy-in,

establish goals and KPIs, and demand accountability


Integrating Medicare Bad Debt into the strategy to maximize

revenue

“Must Haves”

▪ Defined best practices for collection

efforts

▪ Updated best practices for

accounting to ensure bad debts are

properly written off

▪ Commitment from all levels within

the organization

▪ Strong interdepartmental

communication and alignment

▪ Shared strategy for implementation

of updated bad debt procedures

▪ Strong Q&A process to ensure

quality

“New Thinking”

▪ Business Office Processes must

align with Medicare bad debt

requirements

▪ Utilizing analytics to identify gaps in

reimbursement

▪ Bridging the communication gap

between business office and

finance

▪ Slowed payment by snail mail

▪ Inquiry Payments

(how much can you afford)?

Revenue Cycle in the 21st Century

What to expect in a data and consumer-driven

collections culture


RCM Initiatives for 2020

3

9

Denials

POS Collections

Centralize Patient Access

Patient Financial Experience

Payer Scorecards

CDI

Productivity/Labor

Recruitment/Retention RCM

Charge Capture

CDM / Transparency

Bundled Payments

Insourcing (from 3rd party)

HBI: Top Revenue Cycle Priority?

Revenue Integrity

CDI

BI/Analytics

E.H.R. Workflow/reports

Self pay management

Coding

Productivity Labor

Recruitment/Retention RCM

HFMA: Which RCM capability is your organization most focused on next year?

79%OF THESE AREAS

INVOLVE (OR ARE

ENABLED BY)

TECHNOLOGY

7/10OF THESE AREAS

APPEARED ON

BOTH SURVEYS

Sources: HBI, HFMA

© 2018 TransUnion Healthcare, Inc. All Rights Reserved | 40

Source: HFMA https://www.hfma.org/Content.aspx?id=55353

Financial ClearanceRobots can be positioned to verify / flag the necessary financial clearance-related tasks for a

patient and then access a variety of websites or applications to complete them

Credit BalancesCredit balance reversal through automated transaction posting can eliminate thousands of

transactions over time, helping to reduce costs and reallocate staff to higher value activities

Accounts PayableRPA affords automation and streamlined workflows by managing the receipt, accrual and

payment according to contract terms

Claims / Denials ManagementRobotic programming can be prepared in accordance with COB/ Eligibility rules to replicate the

human resolution process

Robotic Process Automation applications to revenue cycle

© 2018 TransUnion Healthcare, Inc. All Rights Reserved | 41

SOURCES: 1) HFMA https://www.triple-tree.com/strategic-insights/2018/june/hfma-highlighting-rcms-next-round-of-innovation/ l 2) https://www.mdconnectinc.com/medical-marketing-insights/voice-

search-improve-healthcare-patients-providers 3) HFN https://www.healthcarefinancenews.com/news/us-bank-optum360-partner-solution-streamline-boost-revenue-cycle-management

Mobile and voice2

The fastest growing technology will enable patients to check wait times, pay bills, book appointments and

arrangement for transport. For staff, theit entire workflow could come from asking a question. Think for patients -

“Alexa…I hurt my arm” or for staff - “Hey Siri…what are the unpaid claims for today? ”.

Banking hits the healthcare beachfront3

Banking capabilities will help hospitals and providers automate tasks for patient financing, denial management

workflows, paper and electronic receivables, primarily claim payments from insurers, and identifying root causes

and accelerating revenue recoupment.

Healthcare catches up to technology1

AI, RPA, MLE will afford automation and streamlined workflows to repetitive tasks of payment review, invoicing,

payment, billing, and collections. A new competency around intelligently extracting data, analyzing that data with

context, and delivering actionable intelligence into the workflows to the providers’ staff will become norm.

Analysts will replace Billers and hospitals and payers may finally be on level ground.

Patient Access and acceleration of patient pay1

Transparency and personalized engagement plans will drive the patient to be more likely to pay, and they will

have a better experience with higher levels of satisfaction and loyalty to the provider

Where is RCM going?

https://www.triple-tree.com/strategic-insights/2018/june/hfma-highlighting-rcms-next-round-of-innovation/

https://www.pwc.com/us/en/industries/health-services/revenue-cycle-consortium-transition-innovation.html

https://www.mdconnectinc.com/medical-marketing-insights/voice-search-improve-healthcare-patients-providers

https://www.healthcarefinancenews.com/news/us-bank-optum360-partner-solution-streamline-boost-revenue-cycle-management


$

Underinsured

Patient

Balance After

Insurance

Denials

Medical

Necessity,

Eligibility,

Authorization,

out of

network,

OOTF etc.

Uninsured

Self Pay

Bad Debt

Medicare

Under-

payments

(TDRG,

IME/GME, etc.)

Claims

Management

Commercial

contractual

Under-

payments

Payer and Patient Revenue

Revenue Leakage

Denials

Prevention

Medicare

Payment

Recovery

Optimization

Increased

insurance

yield

Increased

Claims

throughput

and

productivity

✓ Eligibility

✓ Estimation

✓ Payment/Financing

✓ Insurance

Discovery

✓ Charity

Determination

$ $ $ $ $ $

✓ Authorization

✓ Medical Necessity

✓ Predictive

Analytics

✓ Contract Modeling

✓ Denial and

appeals workflow

✓ Automated audits and

retrospective payment reviews

✓ Resubmitted Claims

✓ Increased Medicare Payment

Yield for TDRG, IME/GME,

DSH and Medicare Beneficiary

Bad Debt

✓ Claim Status

Inquiry

✓ Resubmittal of

assumed $0

claims

✓ Revenue

Assurance

✓ Insurance

Discovery

✓ Corrected Claims

✓ TPL/SUBRO

Resolution

REVENUE

PROTECTION

Revenue Protection

THANK YOU!

Jonathan G. Wiik, MSHA, MBAPrincipal, Healthcare Strategy

TransUnion Healthcare

[email protected]

QUESTIONS

Documents

Protecting your earned revenue - waakhfma.org · A migration to high deductible health plans offered by ... Patients are The New Payer ®, and the yield of patient revenue ... Reviewing