Session 5: Academic Medical Center Revenue Cycles

Session 5: Academic Medical Center Revenue Cycles

Session 4 - Financial Reporting

Session 5: Academic Medical Center Revenue CyclesPart 1: Sponsored Research Revenue Cycle

Part 2: Patient Care Revenue Cycle

Part 3: Tuition Revenue Cycle

November 2004 Page 3

AGENDAIntroduction 15 Mins

Part 1: Sponsored Research Revenue Cycle 60 Mins

Break 15 Mins

Part 2: Patient Care Revenue Cycle Processes & Controls: A Closer Look

45 Mins

Break 15 Mins

Part 2: Patient Revenue Cycle at CU & Case Studies 60 Mins

Part 3: Tuition Revenue Cycle 30 Mins

TOTAL 240 Mins


GOALS AND OBJECTIVES– Revenue Cycles

• Understand the key processes that make up these revenue cycles

• Understand the controls that can be instituted and monitored within the revenue cycle process

• Understand potential pitfalls associated with various key processes


CUMC: 2003-2004 Source of Operating Funds

Note : Other includes gifts, endowment, patent and miscellaneous revenues

Total = $1.2 Billion

Tuition 5%

ICR9%

Other 9%

Affiliations 12%

Clinical Practice 32%

Sponsored Awards 33%


SPONSORED RESEARCH REVENUE CYCLE

Part 1

The sponsored research funding cycle begins with a program announcement by a granting agency and ends with the final progress report and financial close-out. Investigators prepare applications which are approved by their institution and the granting agency performs peer review and scoring. A notice of grant award is issued and the principal investigator begins conducting research. Post-award activities include financial monitoring to ensure funds are spent in accordance with program goals and objectives.


CUMC: SPONSORED RESEARCH FUNDING

0

100

200

300

400

Mil

lio

ns

'95 '96 '97 '98 '99 '00 '01 '02 '03 '04

Government Non-Government



Post Award

Functions

Pre Award

Functions

Final Reports & Closeout

Progress Reports

Institution Request Reimbursement

Award Adjustment

PI expends funds; Institution Monitors

Cost center created

Award issued

Notification of pending award

Award negotiation

Peer review and scoring

Application submission

Institutional review

Application preparation

Program announcement





Pre Award Process

Finding the Money

– Senior Investigators• Know about announcements

• Should need minimal support

– Junior Investigators• Access to announcement databases (e.g. Community of Science)

• Need support



Pre Award Process

Application Preparation

– Generally prepared by the PI

– Guidance from research administration office on:• Sponsor format and forms

• Necessary regulatory approvals

• Sponsor due dates

– Scientific content may be reviewed by senior investigator



Pre Award Process

Application Preparation

– Some institutions provide grant writing support and “mock” peer review• Effectiveness needs to be assessed

– Grant applications generally are reviewed differently than contract applications

• “Best Effort” vs. Procurement



Budgeting Considerations

– Institutional policies

– Program announcements• PI effort

– NIH Grants Policy Statement• Modular Grants policies

– Federal cost principles• OMB Circular A-21

– Cost accounting standards

– Departmental budget



Award Budget

Award Budget = Direct Costs + F&A Costs



Criteria for Budgeting and Charging a Direct Cost

– Some simple maxims• The budget should represent the best intentions of the investigator

• Direct costs charged should represent those costs necessary to meet the project’s scientific and technical requirements

• The relationship between the charge and the science should– Be “clear and close”

– Costs should support the project’s purpose and activity

– To be charged to an award, a direct cost should be included in the awarded budget, or the cost must be permitted within rebudgeting authority granted by the sponsor

– The cost must not be restricted by the sponsor



Pre Award Process

Institutional Reviews

– To ensure compliance requirements are met for• Human / animal subject use

• Research safety and hazardous materials management

• Facilities

– That the budget is appropriate for research proposed

– That budgets costs are consistent with institutional practices

– To identify agency restrictions and cost share

– That the application is complete

– Provides assurance to the institutional official signing the application that the scientific and administrative requirements have been met



Pre Award Process

Submission of the Application

– Submission can be• Electronic

• Manual

– Institutional systems may have• Common database

• Shared with– Central Office of Research Administration

– Finance



Pre Award Process

Sponsor Peer Review and Scoring

– Applications are reviewed for scientific merit and the research goals of the agency

– Priority scores are often used, e.g., NIH, based on:• Significance

• Approach

• Innovation

• Investigator track record

• Environment and facilities

• Representation of population to be studied

• Reasonableness of the proposed budget

• Adequacy of proposed protection for humans, animals, and the environment



Pre Award Process

Award Negotiation

– Limited negotiation effort with federal sponsors• Generally a unilateral cut: Feds argue grants are “assistance”

• Contracts require extensive cost justification

– Greater negotiation effort with non-government sponsors• Indirect costs

• Cost reimbursement

• Intangible costs– Technology transfers, e.g., patent ownership, licensing

– Coordinate with Central Office of Research Administration



Post Award Process

Award Issued

– About 20%-25% of applications are awarded• Renewals generally higher

– Award is made to the institution, shared responsibility between Institution and PI for proper project administration

– Terms and conditions are specified on the notice of grant award



Post Award Process

Federal Awarding Mechanisms

– Research and Training Grant• Federal assistance providing money, property, or both to an eligible entity to

carry out an approved project or activity

– Cooperative Agreement• Substantial federal programmatic involvement with the grantee, e.g., clinical

trials or multiple site projects

– Contract• Mutually binding legal relationship between the contractor and the government

for procurement of goods and services– Most restrictive of all award mechanisms

– Most often used by Department of Defense and NASA



Post Award Process

FAS Account Created

– Budgeted in accordance to expenditures of approved project

– Direct expenditures• Salaries and wages of personnel

• Lab supplies and materials

• Equipment

– F&A (Indirect) expenditures• Assigned to the project through the government negotiated overhead rate

– Facilities and operations

– Other administrative support



Post-Award Process

Reimbursement Methods

– Letter of credit• Used for federal agencies awarding grants and cooperative agreements

– Vouchers• Used for federal agencies awarding contracts

– Billing• Used with non-federal sponsors

• May be cost reimbursement or payment for completed clinical trial study participant

– Whatever mechanism is used, consideration has to be given to cash flow and monitoring receivable amounts


http://www.cumc.columbia.edu/research/

CUMC Faculty and Research InformationResearch Administration, Electronic Res Admin (RASCAL), Office of Grants and Contracts, University & Campus Profiles, Faculty Profiles, Shared Equipment/Core Facilities, Campus Research Activities, Research Courses and Seminars, Publications, Policies and Procedures

Research Funding

Funding Databases, Funding Information by e-mail, Award Programs, Grant-Related Publications, Sources of Funding Information

National and International Research Resources

Links to Funding Agencies: NIH, Private Agencies, and others Grant Writing Tips, Electronic Forms, Grants Management, Bio & Medical Research Ethics, Clinical Trials, Intellectual Property/Tech Transfer, Commercial Institutions, Professional Societies

http://www.cumc.columbia.edu/research/funding.htm

http://www.cumc.columbia.edu/research/resource.htm


http://www.cumc.columbia.edu/research/faculty.htm

| Office of Research Administration/Office of Grants and Contracts || CU's Electronic Research Administration System (RASCAL) |

| Columbia University & Health Sciences Campus Profile || Faculty Profiles | Shared Equipment & Core Facilities Directory |

| Research Activity and Sponsored Projects || Courses and Seminars | Publications |

| University Research Policies and Procedures |

Office of Research Administration/Office of Grants & Contracts

Manual of Policies and Procedures

Research Administration FormsOffice of Grants & Contracts, IRB, IACUC, Environmental Health and Safety, Radiation Safety, Columbia Innovation Enterprise, Office of the Treasurer & Controller, Purchasing Office

Research and Grants JournalMonthly listing of funding opportunities in the biomedical and behavioral sciences; including those from federal agencies, state and local governments, voluntary health organizations, and foundations. Available in web-based and hard-copy formats.

https://www.rascal.columbia.edu/

http://www.cumc.columbia.edu/research/camp-des.htm

http://www.cumc.columbia.edu/research/fac-prof.htm

http://www.cumc.columbia.edu/research/equip/index.htm

http://www.cumc.columbia.edu/research/manual/ogcm2598.htm

http://www.cumc.columbia.edu/research/forms.htm

http://www.cumc.columbia.edu/research/funding.htm#rgj


Manual ofPolicies and Procedureshttp://www.cumc.columbia.edu/research/manual/ogcm2598.htm

Columbia UniversityHealth Sciences Division

Office of Grants and Contracts

Manual ofPolicies and Procedures

TABLE OF CONTENTS

| 1. Introduction | 2. General Information | 3. Preparing the Application || 4. Application Submission Procedures | 5. Post-Award Administration | 6. Close-Out |

1. Introduction

2. General Information – 2.1 Types of Sponsored Projects

• 2.1.1 Grants • 2.1.2 Contracts • 2.1.3 Research Subcontracts or Consortium Agreements • 2.1.4 Fee for Service Contracts • 2.1.5 Cooperative Agreements

– 2.2 How is a Sponsored Project different From a Gift?

3. Preparing the Application

http://www.cumc.columbia.edu/research/manual/ogcm1_0.htm


http://www.cumc.columbia.edu/research/manual/ogcm2_1_1.htm







Research Funding http://www.cumc.columbia.edu/research/funding.htm

Research Funding•Research and Grants Journal •Research Funding Databases

•Research Funding Information by e-mail •Award Programs with a Limited No. of Allowed Applications

•Award Programs Reviewed and Funded Internally •Award Programs Specifically for Equipment

•Honorific Awards •Grant-Related Publications and Other Sources of Funding Information

•Links to Funding Agencies •Writing a Grant Proposal

Research and Grants JournalMonthly listing of funding opportunities for research, training, and service activities in the biomedical and behavioral sciences; including those from federal agencies, state and local governments, voluntary health organizations, and foundations. Funding opportunities are listed chronologically by deadline, then alphabetically by funding agency.

Word and PDF (Adobe) VersionsThese Word (PC) and PDF (Adobe) Versions of the Research and Grants Journal contain active e-mail and web links.

January 2004 Deadlines: Word (PC); PDF; Listing of Funding AgenciesFebruary 2004 Deadlines: Word (PC); PDF; Listing of Funding AgenciesMarch 2004 Deadlines: Word (PC); PDF; Listing of Funding AgenciesApril 2004 Deadlines: Word (PC); PDF; Listing of Funding AgenciesMay 2004 Deadlines: Word (PC); PDF; Listing of Funding AgenciesJune 2004 Deadlines: Word (PC); PDF; Listing of Funding AgenciesJuly 2004 Deadlines: Word (PC); PDF; Listing of Funding AgenciesAugust 2004 Deadlines: Word (PC); PDF; Listing of Funding AgenciesSeptember 2004 Deadlines: Word (PC); PDF; Listing of Funding AgenciesOctober 2004 Deadlines: Word (PC); PDF; Listing of Funding AgenciesNovember 2004 Deadlines: Word (PC); PDF; Listing of Funding AgenciesDecember 2004 Deadlines: Word (PC); PDF; Listing of Funding Agencies

Web VersionTo access: Login to Rascal, Columbia University's web-based research administration system, with your University network ID (UNI) and Password. Select “Finding Funding”, then “View Research and Grants Journals”.

http://www.cumc.columbia.edu/research/spec-lim.htm

http://www.cumc.columbia.edu/research/spec-int.htm

http://www.cumc.columbia.edu/research/spec-equ.htm

http://www.cumc.columbia.edu/research/spec-hon.htm

http://www.cumc.columbia.edu/research/priv/RGJ/January_2004_deadlines.doc

http://www.cumc.columbia.edu/research/priv/RGJ/January_2004_deadlines.pdf

http://www.cumc.columbia.edu/research/priv/RGJ/January2004_listing.pdf

http://www.cumc.columbia.edu/research/priv/RGJ/February_2004_deadlines.doc

http://www.cumc.columbia.edu/research/priv/RGJ/February_2004_deadlines.pdf

http://www.cumc.columbia.edu/research/priv/RGJ/February2004_listing.pdf

http://www.cumc.columbia.edu/research/priv/RGJ/March_2004_deadlines.doc

http://www.cumc.columbia.edu/research/priv/RGJ/March_2004_deadlines.pdf

http://www.cumc.columbia.edu/research/priv/RGJ/March2004_listing.pdf

http://www.cumc.columbia.edu/research/priv/RGJ/April_2004_deadlines.doc

http://www.cumc.columbia.edu/research/priv/RGJ/April_2004_deadlines.pdf

http://www.cumc.columbia.edu/research/priv/RGJ/April2004_listing.pdf

http://www.cumc.columbia.edu/research/priv/RGJ/May_2004_deadlines.doc

http://www.cumc.columbia.edu/research/priv/RGJ/May_2004_deadlines.pdf

http://www.cumc.columbia.edu/research/priv/RGJ/May2004_listing.pdf

http://www.cumc.columbia.edu/research/priv/RGJ/June_2004_deadlines.doc

http://www.cumc.columbia.edu/research/priv/RGJ/June_2004_deadlines.pdf

http://www.cumc.columbia.edu/research/priv/RGJ/June2004_listing.pdf

http://www.cumc.columbia.edu/research/priv/RGJ/July_2004_deadlines.doc

http://www.cumc.columbia.edu/research/priv/RGJ/July_2004_deadlines.pdf

http://www.cumc.columbia.edu/research/priv/RGJ/July2004_listing.pdf

http://www.cumc.columbia.edu/research/priv/RGJ/August_2004_deadlines.doc

http://www.cumc.columbia.edu/research/priv/RGJ/August_2004_deadlines.pdf

http://www.cumc.columbia.edu/research/priv/RGJ/August2004_listing.pdf

http://www.cumc.columbia.edu/research/priv/RGJ/September_2004_deadlines.doc

http://www.cumc.columbia.edu/research/priv/RGJ/September_2004_deadlines.pdf


Faculty & Research:

Grants Management http://www.cumc.columbia.edu/research/grants.htm

Faculty & Research:Grants Management

Columbia University

•Columbia University Medical Center's Manual of Policies and Procedures

•Research Administration FormsOffice of Grants & Contracts, IACUC, Environmental Health and Safety, Radiation Safety, Columbia Innovation Enterprise, Office of the Treasurer & Controller, Purshasing Office

•Administrative Information for Grants & Contracts Applications

•Information on NIH's Modular Grant Program

•Information on NIH's Non-Competing (Type 5) Grant Progress Reports

•Support of Graduate Research Assistants on research grants

•SubcontractsSlide presentation on Subcontracts and Subawards

•Training GrantsSlide presentation on Pre-award and Post-Award Management of Training Grants

•Support of Graduate Research Assistants (GRAs) on Research Grants • Slide Presentation • PDF version of slides

•University Research Policies and Procedures

•Comprehensive Research Funding Information

Federal Policies and Regulations

•Code of Federal Regulations

•Travel


BREAK


COLUMBIA UNIVERSITY PATIENT CARE REVENUE CYCLE

Part 2A

The patient care revenue cycle involves preparing for a patient encounter, interacting with patients during a patient encounter, capturing and recording services rendered and processing claims and managing a patient’s financial account to zero balance resolution.


CONTRACTMANAGEMENT/

PROVIDERCREDENTIALING

SCHEDULING/ REFERRAL

MANAGEMENT

FINANCIALCOUNSELING

CHECK IN /REGISTRATION

COMPLIANCEBILLING/CODING

REVIEW

ENCOUNTERCHARGE CAPTURE/CODING CLAIM

DEVELOPMENT&

SUBMISSION

PAYMENTPOSTING

FOLLOW-UP

PATIENT ACCESS CYCLE BEGINS

REJECTION& DENIAL

PROCESSING

COLUMBIA UNIVERSITYPATIENT CARE REVENUE CYCLE


PATIENT CARE REVENUE:INTERSECTION OF PATIENT CARE AND TEACHINGMedicare Program:

– Began in 1967

– Two trust funds: • Part A for hospital and other facility

services (eg, nursing home)

• Part B for provider and other outpatient services

– Intermediary Letter (I.L.) 372 : Federal guidance for teaching providers establishing conditions under which providers can teach residents (reimbursed under Part A) and provide patient care (reimbursed under Part B) at the same time.


WHO BILLS FOR WHAT?HOSPITAL vs. PROVIDER SERVICESHospital Services (billed by NYPH)

• Inpatient hospitalizations

• Ambulatory surgeries

• Outpatient diagnostic testing (facility, supplies, equipment and support staff costs)

• Outpatient physical, occupational and speech therapy

• Outpatient clinics (facility, supplies, equipment and support staff costs)

• Emergency room services (facility

• Skilled nursing and home health services

Provider Services (billed by CUMC)

• Daily provider visits and consults to hospitalized patients

• Surgeries and administration of anesthesia

• Office visits and office consults

• Office-based diagnostic testing (eg, EKGs)

• Provider interpretation of diagnostic tests performed in a hospital

• Provider diagnostic and treatment services for patients seen in the hospital outpatient clinic, emergency room or skilled nursing facility

HospitalClaim

Provider Claim


CONTRACT MANAGEMENT– Objectives

• Provider establishes contracts with their significant payers to determine claims processing, payment and rejection terms and conditions

– This often requires the establishment of rates for particular services

– Providers must regularly evaluate the reimbursement rates to ensure that they are being reimbursed appropriately


PROVIDER CREDENTIALING AND RECREDENTIALING

– Objectives• Evaluate credentials of potential or existing providers to ensure that appropriate

licenses and certifications are accurate and up to date– Valid state license to practice and prior sanctions against licensure

– Education and Training Board Certification

– Drug Enforcement Agency (DEA) Certification

– Verification of clinical privileges

– Malpractice coverage and malpractice history

– National Practitioner Database Query

– Medicare/Medicaid Sanctions

– Application processing for Medicare, Medicaid, Blue Cross/Blue Shield, and other insurance companies

• Re-credentialing typically occurs ever 2 years at CU


SCHEDULING/REFERRAL MANAGEMENT– Objectives of Scheduling/Referral Management

– Appropriately identifying the service to be rendered

– Determining a provider who can provide the service (based on that person’s treatment schedule, insurance enrollment status, and qualifications)

– Initiating a pre-registration process by obtaining a minimum data set of patient demographic information

– Communication with patient’s regarding payment expectations and referral requirements

– Columbia Best Practice: – Use IDXtend (institutional billing system) for scheduling of appointments

– Collect minimum data set of demographic and insurance information for pre-visit insurance verification


INSURANCE VERIFICATION…A CRITICAL PRACTICE

– Objectives

– Obtaining and verifying coverage prior to rendering services

– Minimizing bad debt by contacting the patient prior to service to address any problems or limitations with coverage

– Improving patient satisfaction by– Minimizing the amount of time spent registering patients “on the spot”,

therefore reducing patient wait times and increasing patient satisfaction

– Managing patient expectations regarding their out-of-pocket obligations


INSURANCE VERIFICATION– Verification of coverage

– Effective date of coverage

– Types of benefits available

– Coverage Limits – Yearly/lifetime

– Authorization requirements

– Provider participation status

– Billing address

– Patient responsibility (deductible and/or co-payments)

– Types of verification procedures– Phone call

– Internet

– Electronic system eligibility check (Medicaid)

– Columbia Best Practice: Centralized Insurance Verification Unit


CHECK IN– Objectives:

• Beginning or completing registering of a patient

• Identifying missing information

• Obtaining provider referrals from patient

• Collecting co-payments and deductibles

• Administering Advance Beneficiary Notices (ABNs)

• Administering assignment of benefits

• Provide patient privacy notice


FINANCIAL COUNSELING– Objectives:

• Discussing, in advance, how patients will pay for their out-of-pocket responsibilities.

– Payment plans

– Discounts based on financial need

• Helping patients work through some eligibility/coverage issues in order to ensure that the services to be provided are covered

– Pre-existing conditions issues

– COBRA

– Lack of authorization

– Out of network services


ENCOUNTER CHARGE CAPTURE/CODING– Objectives:

– Provider must complete charge capture forms for each service rendered which includes the patient’s name, medical record number, billing account number, identification of procedure codes that should describe services rendered and diagnosis information that should describe the patient’s diagnosis

– Staff enters charges accurately, timely and to the correct account so that services are billed and reimbursed appropriately

– Columbia University Best Practice:– 24-48 hours within date of service


COMPLIANCE BILLING/CODING REVIEW– Objectives:

– Control mechanism to ensure that billing information is supported by documentation in the medical record

– Comparing clinician documentation in the medical record to the procedure and diagnosis codes assigned by the clinicians/coders

– Performed prospectively and retrospectively

– Random selection of certain areas, 100% review in other areas


CLAIM DEVELOPMENT & SUBMISSION– Objectives

– Scanning data through a series of pre-defined edits to identify coding and billing discrepancies or missing information that would prevent a claim from passing claim edits

– Reviewing and resolving edit reports of claims that contain errors.

– Review the lists and resolving any errors.

– Submitting “clean claims” to third party payers for processing

– Reviewing and reconciling clearinghouse reports which then forwards electronic claims to appropriate third party payers

– Reviewing electronic acknowledgements that claims were received

– Columbia Best Practice: Department responsibility for the weekly evaluation of claim edit reports and “working” claims to get them to pass claim edits.


PAYMENT POSTING– Objectives

– Posting of payments to patient accounts after payment has been made is vital to ensuring an accurate accounts receivable

– Payment is posted timely, accurately, to the correct account to reduce A/R follow up

– Payments may include zero payments and the posting of a rejection/denial code

– Payments may include self-pay as well as insurance payments

– Electronic as well as manual payment posting processes

– Posting contractual allowances in concert with payments– Ensure that allowance codes are utilized appropriately

– Columbia University Best Practice– 1-2 days of receipt of payment


FOLLOW UP– Objectives

– In person, phone, and written communication with patient, the “responsible party", or insurance companies regarding unpaid patient account balances

– Determination that claim was sent to correct insurance company and that it is being processed

– Each claim may have multiple payors - primary and secondary insurance companies, patient

– If internal collection efforts fail, the account may be outsourced to a collection agency

– Credit balances are resolved by issuing refunds to patients and insurance companies


REJECTION & DENIAL PROCESSING– Objectives

– Evaluating claims that have been rejected or denied.– Discussions with the clinician that rendered the service

– Reviewing billing system claim information to determine whether incorrect information was entered (either demographic, insurance, procedure code or diagnosis information)

– Determining whether appropriate pre-authorization was obtained prior to the service being rendered. If the service was authorized, was the authorization number submitted with the claim

– Rebilling the claim with corrected information or contacting the insurance company to resolve or appeal the claim.

– Evaluating accounts for potential administrative write-offs (e.g. late filing, unauthorized service)


QUANTIFYING THE OPPORTUNITY:EXAMPLE OF DENIAL DISTRIBUTION BY REASON

13%

5%

36%9%

11%

2%

20%4%

Registration Data Collection Benefit Verification

Related/Included Coding Related Provider Enrollment

Claim Issue Other

By Volume

Total Denials $1.6M

* Hypothetical example


BREAK


Part 2BCOLUMBIA UNIVERSITY PATIENT CARE REVENUE CYCLE


HISTORICAL INFORMATION ABOUT COLUMBIA FACULTY PRACTICE REVENUE CYCLE

• 575,000 Annual Faculty Practice Outpatient Visits; 55,000 Inpatient Admissions

• 30 years ago, most CUMC physicians managed patient revenue independently and “owned” the economics

• Over time CU departments developed faculty practice plans with their own full-time faculty: Practice plans promoted program collaboration across departments; Clinical revenue generated supports academic mission & research initiatives

• Up until 1993 departments billed and collected on a multitude of billing systems

• In 1993, IDX was installed as the enterprise-wide billing system that became a common platform for faculty across CU clinical departments

• Common billing system more efficiently manages revenue cycle in ways such as: Interfacing with other CUMC information technology systems; Providing shared information for better monitoring of managed care contract compliance Scrubbing and submitting cleaner claims for faster payment turnaround and lower percentage of claim denials

• Future IDX enhancements also being developed, such as: Electronic patient eligibility Payor contract module Web based software version


Training Internal Control Priorities

–Cash Management

–Credit Balances

–Write -offs

–Charge Capture



Cash Management

–Use of Lockbox and Electronic Funds Transfer

–Secure Time of Service Cash Receipts

–Timely Deposits and Payment Posting

–Cash Reconciliation Procedures



Credit Balances

–Work all credit balances within 60 days of identification– (30 Days Best Practice)

–PREVENTION!– Identify and correct root causes of credit balances



Write-off Policies

–Use standard set of transaction codes for administrative, bad debt, small balance write-offs

–Ensure that appropriate approval mechanisms are in place for management review of account write offs



Charge Capture/Charge Entry

–Ensure timely capture of charges into billing system.

–Ensure accurate recording of charges into billing system



Faculty Practice Revenue Management

–Faculty Practice Revenue Management Policies & Procedures issued Fall 2004:– Website: http://www.cumc.columbia.edu/facultypractice/policies/



IDX Payor Mix Analysis Charges July 2003 - June 2004

Managed Care Out-of-Network

9%

Medicare24%

Medicaid11%

Medicaid Managed Care

8%

Self-Pay5%

Other2%

Commercial5%

Managed Care In-Network

36%

IDX Payor Mix Analysis by Payments July 2003 - June 2004

Managed Care Out-of-Network

12%

Medicare16%

Medicaid3%

Medicaid Managed Care

3%

Self-Pay14%

Other4%

Managed Care In-Network

39%

Commercial9%

Charge & Payment Payor Mix of Columbia Faculty Practice Groups on IDX



Clinical Revenue Improvement Project

Introduction and Background

– Timeline

– Participants

– Stockamp Consultants




Goals

– Create “Hub & Spoke” Responsibility/ Accountability Model (Culture Change)

– Establish Faculty Oversight & Leadership

– Implement a Consistent Set of Efficient Business Practices Across All Units

– Maximize Revenue

– Improve Internal Controls

– Improve Employee Satisfaction

– Improve Patient Satisfaction.

– Improve Provider Satisfaction

– Data Driven Management: Weekly & Monthly




Clinical Revenue Office

• Accounts receivable follow-up: New approach , New Tools & Training

• Coordination with CPPN

• Insurance Verification

• Patient Call Center

• Coordination with Departments




Department Practice Access Sites: “Front-End” Re-Engineering

• Process Redesign

• New Approach & New Tools & Training

• Securing Patient Visits Before they occur



PATIENT REVENUE CYCLE PROCESSESFRONT END:

Revenue Cycle Process Process Owner

Work Driver / Process Control

Job Aids Management Reporting

1 Appointment Scheduling /Registration Department Patient / Physician

Phone Call

Minimum Data Set Criteria; FSC Selection Reference Sheet

ONTRAC Exception Report; Staff Performance Reviews

2 Insurance Verification CRO ONTRAC Worklist Situation Response

Guidelines; FSC Selection Reference Sheet; Passport

ONTRAC Securing Sponsorship Summary; IV Ineligible Report; Staff Performance Reviews; IV Productivity Report

3 Authorization/Pre-Certification/ Referral Department ONTRAC Worklist Situation Response


ONTRAC Securing Sponsorship Summary; Auth Productivity Report; Staff Performance Reviews

4 At Risk Decision Department ONTRAC Worklist Situation Response

Guidelines ONTRAC At Risk Decision Report

5 Point of Service Check-in Department ONTRAC Worklist Situation Response


ONTRAC Securing Sponsorship Summary; Rejection Report; Staff Performance Reviews


PATIENT REVENUE CYCLE PROCESSESBACK END:

Revenue Cycle Process Process Owner

Work Driver / Process Control

Job Aids Management Reporting

6 Coding and Charge Capture

Department Charge Tickets;

Encounter Forms Charge Lag Reports; Staff Performance Reviews

7Billing Department Charge Tickets; IDX

Edit List; QUIC List TRAC Summary; TRAC Billing WIP Report

8Denial Processing Department

and CROQUIC List, TRAC Worklist, Correspondence

Situation Response Guidelines, WebCis, Passport, NeuroNet

TRAC Summary; TRAC Follow-up WIP Reports; Staff Performance Reviews

9A/R Follow-up CRO TRAC Worklist Situation Response

Guidelines, WebCis, Passport, NeuroNet

TRAC Summary; TRAC Follow-up WIP Reports; Staff Performance Reviews

10Cash Posting Department Remittance Advice Cash Report; TRAC Summary; Staff

Performance Reviews



Data Driven Management

• Weekly management meetings

• Faculty Oversight Committee

• Performance standards, metrics and benchmarks



Columbia University Revenue CycleKey Performance Indicator Dashboard

Dec 2004 – Feb 2005

CRO (6 Departments)

Indicator Baseline December January February February GoalGoal

Variance

Cash Receipts $10,846,767 $12,637,130 $12,975,524 $11,976,046 $11,936,309 $39,737

A/R Days 112.9 85.4 85.0 85.1 70.0 -15.1

A/R > 365 Days 31.4% 15.1% 13.8% 14.0% 15.0% 1.0%

Billing WIP $13,340,683 $7,202,456 $7,300,560 $6,623,850 $5,878,854 -

$744,996

Charge Lag Days 18 18 22 20 5 -15

Pre-registration (Min Data Set) N/A 74% 80% 80% 90% -10%

Pre-service Secured N/A 78% 89% 86% 92% -6%


COLUMBIA UNIVERSITYORTHOPAEDIC SURGERY – Case Study

BEFORE July 2000 12 independent physicians, average staff of 3 per office, 5 major locations

Each maintained their own charts, appointment protocols, billing fees and office policies

SINCE July 2000 Major initiative to centralize all work flow processes



Created teams:

Medical records

Appointment scheduling

Surgical scheduling

Secretaries

Billing and collections

Front desk reception



•Physicians were polled as to their preferences and templates were created as to the needs of each physician - how long should a new patient be scheduled for, are x-rays needed first, what types of patients will they see, what insurance plans do they participate in, what equipment is needed in the OR for a surgery.

•All charts were centralized and a standard chart format established (what is included and where in the chart). There is one chart per patient seen by the group.

•Secretaries are shared one for each 2 physicians.

•There is one appointment scheduling phone number created for all physicians.

•Front Desk Teams (including a front desk biller) are set up at the 5 major locations, where they are trained to collect demographic info, referral forms, HIPPA forms, research questionnaires

•Billers, upon check-out, collect copays and past due balances and post charges and payments at time of service.



Today:– 17 physicians with a centralized staff of 67.

– Higher expenses but revenues increasing even faster

– Reduced charge delays and billing rejections because of attention to front desk

– Ability to add physicians without adding staff

– Better referrals, no missed phone calls, filing up to date

– Maximized use of the operating room



TODAY:– A/R is 67 days (vs. CU goal of 70 and actual of 88 days in September 2004)

– 3 day charge lag (vs. CU goal of 5 days and actual of 17 days in September 2004)

– 90% of patients have secured billing information before they arrive (vs. CU goal of 92% and actual of 73% in September 2004)


COLUMBIA UNIVERSITY TUITION REVENUE CYCLE

Part 3

The tuition revenue cycle involves a continuum of activity from student recruitment to matriculation, including billing and collection. This includes the student application, interview and screening process. Tuition rate setting and financial aid considerations are also key components.



Recruitment

Inquiry

Application

Interview

Acceptance

Financial AidRegistration / Billing

Collection Cash Financial Aid

Cash FAS

Applications

Acceptances

Yield


CUMC ADMISSIONS

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College of Physicians & Surgeons Mailman School of Public Health

School of Dental & Oral Surgery School of Nursing

Admit Rate

(left axis)

Applications

(right axis)LEGEND:



Tuition Setting Metrics

– Demand / yield

– Student retention

– Economic trends

– Socioeconomic mix of applicant pool

– Availability of financial aid

– Affordability of competition

– Public opinion of quality of education

– Track record of graduates



Net Tuition Revenue Example

Gross Tuition $10,000,000

Less: Institutionally Funded Financial Aid $ 3,000,000

Net Tuition Revenue $ 7,000,000

Tuition Discount 30%



Financial Aid Considerations

– Tuition / Aid• Low / Low

• High / High

– Need based

– Merit based

– Family / student contribution

– Employer reimbursed tuition

– Competition

– Loan availability

– Net Tuition Revenue



CUMC Sources of Student Support

Total Cost (Tuition, Living, Fees)

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MD Bio SciPhD

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SPH F/T

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Dean

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GLOSSARY

Appendix


GLOSSARY• Bad debts Bad debts are amounts considered to be uncollectible from accounts

and notes receivable which were created or acquired in providing services. "Accounts receivable" and "notes receivable" are designations for claims arising from the rendering of services, and are collectible in money in the relatively near future.

• Charity allowances Charity allowances are reductions in charges made by the provider of services because of the indigence or medical indigence of the patient. Cost of free care (uncompensated services) furnished under a Hill-Burton obligation are considered as charity allowances.

• Coinsurance The amount a patient is required to pay for medical care in a fee-for-service plan after the patient has met the deductible. The coinsurance rate is usually expressed as a percentage. For example, if the insurance company pays 80 percent of the claim, the patient pays 20 percent.


GLOSSARY• Co-payments are payment sharing amounts that the patient is responsible for as a

result of the coverage the patient has with the insurance company. Patient co-payment amount usually are applied to each visit and range from $5-20 per visit. Patients may also have co-payment amounts may also represent a percentage of allowed charges

• Courtesy allowances Courtesy allowances indicate a reduction in charges in the form of an allowance to providers, clergy, members of religious orders, and other as approved by the governing body of the provider, for services received from the provider. Employee fringe benefits, such as hospitalization and personnel health programs, are not considered to be courtesy allowances.

• Covered Expenses Most insurance plans, whether they are fee-for-service, HMOs, or PPOs, do not pay for all services. Some may not pay for prescription drugs. Others may not pay for mental health care. Covered services are those medical procedures the insurer agrees to pay for. They are listed in the policy.


GLOSSARY• Deductibles are payment sharing amounts that the patient is responsible for. A

deductible is usually the first $X dollars per a specified period (usually per year) which the patient is responsible for.

• Normal accounting treatment: reduction in revenue Bad debts, charity, and courtesy allowances represent reductions in revenue. The failure to collect charges for services rendered does not add to the cost of providing the services. Such costs have already been incurred in the production of the services.

• Preexisting Condition: A health problem that existed before the date your insurance became effective.

• Reasonable and Customary Charges Most insurance plans will pay only what they call a reasonable and customary fee for a particular service. If your doctor charges $1,000 for a hernia repair while most doctors in your area charge only $600, you will be billed for the $400 difference. This is in addition to the deductible and coinsurance you would be expected to pay.


GLOSSARY– Types of Insurance Coverage

• Indemnity Fee-for Service - This is the traditional kind of health care policy. Insurance companies pay fees for the services provided to the insured people covered by the policy. This type of health insurance offers the most choices of doctors and hospitals. You can choose any doctor you wish and change doctors any time. You can go to any hospital in any part of the country.

• HMO (Health Maintenance Organization): Prepaid health plans. You pay a monthly premium and the HMO covers your doctors' visits, hospital stays, emergency care, surgery, checkups, lab tests, x-rays, and therapy. You must use the doctors and hospitals designated by the HMO.

• PPO (Preferred Provider Organization): A combination of traditional fee-for-service and an HMO. When you use the doctors and hospitals that are part of the PPO, you can have a larger part of your medical bills covered. You can use other doctors, but at a higher cost.


GLOSSARY– Medicare

• Medicare is the Federal health insurance program for Americans age 65 and older and for certain disabled Americans. If you are eligible for Social Security or Railroad Retirement benefits and are age 65, you and your spouse automatically qualify for Medicare.

• Medicare has two parts: hospital insurance, known as Part A, and supplementary medical insurance, known as Part B, which provides payments for doctors and related services and supplies ordered by the doctor. If you are eligible for Medicare, Part A is free, but you must pay a premium for Part B.

– Medicaid • Medicaid provides health care coverage for some low-income people who cannot

afford it. This includes people who are eligible because they are aged, blind, or disabled or certain people in families with dependent children. Medicaid is a Federal program that is operated by the States, and each State decides who is eligible and the scope of health services offered

Session 5 – Revenue Cycle

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Session 5 – Revenue Cycle

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Session 5

Documents

Session 5: Academic Medical Center Revenue Cycles