Download - Adopting a Proactive Revenue Cycle Model
Adopting a Proactive Revenue Cycle Model
Paola Turchi, MSHCA, FHFMA, FACMPE, CPCSr. Vice President of Client SuccessGlobal Healthcare ResourceAustin, TX
Presenter reports no conflicts of interest at the time of presentation.
• Solve issues inherent to reactive revenue cycle models
• Produce pre-visit, proactive revenue cycle processes
• Report metrics and key performance indicators to measure success
Learning Objectives
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Paola has a degree in Business Administration and Master’s in Healthcare Administration, with more than 20 years of experience in revenue cycle management. She is a Certified Professional Coder through AAPC, a Fellow Healthcare Financial Professional through HFMA and a Fellow Certified Medical Practice Executive with the American College of Medical Practice Executives through MGMA. She has a green belt Six Sigma Certificate from the University of California Irvine, and a Change Leadership Certificate from Cornell University. For the past several years, she has provided consulting services to more than 250 practices ranging from one-doctor specialty practices to large 1,200 physicians IDNs.
Paola’s expertise is in performing accounts receivable audits to identify and develop process improvement initiatives to streamline workflows and increase revenue, leading practice management (PM) implementations and conversions, and mentoring revenue cycle professionals. She also engages with organizations to develop performance metrics to assess internal trends and benchmark them against professional associations. She has presented at HFMA regional and MGMA national conferences on the topics of revenue cycle and managing self-pay collections.
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About Paola Turchi, MSHCA, FHFMA, FACMPE, CPC
https://www.linkedin.com/in/paola-turchi-mshca-fhfma-facmpe-cpc-4836727/
Which of the following best represent your organization?1. 1 to 25 Physicians Medical Practice
2. 26 to 50 Physicians Medical Practice
3. 51+ Physicians Medical Practice
4. Hospital or Ambulatory Surgery Center
5. Management Services Organization
6. Revenue Cycle Management Company
7. Other
Survey Question # 1
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Which of the following best represent your role in your organization?1. Medical Provider
2. C – Level Executive
3. Vice President or Director
4. Manager or Supervisor
5. Hands-On Contributor
6. Other
Survey Question # 2
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Poll Key = XHKVW
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What have we SURVIVED?
• 55% decrease in revenue • 60% decrease in patient volume• 61% decrease in compensation• 50% practices furloughed staff• 30% practices laid off staff• …
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Healthcare Leaders ARE Resilient
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Top two challenges inherent to reactive revenue cycle models
Claim denials
1Patient responsibility
2
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Revenue cycle challenge #1: Denials … Denials … Denials
https://www.changehealthcare.com/insights/denials-index
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Revenue cycle challenge #1: Denials by Region
https://www.changehealthcare.com/insights/denials-index
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Revenue cycle challenge #1: Denial Reasons
https://www.changehealthcare.com/insights/denials-index
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Revenue cycle challenge #1: Denial Sources
https://www.changehealthcare.com/insights/denials-index
of claims submitted for the first time are denied or rejected
30% of denials are never worked due to lack of time of knowledge
60%of denials are preventable
90%
How does this challenge affect YOUR practice?
of denied claims can be overturned
70%It costs around $25.00 to appeal a claim
$25
Looking at the numbers
Scenario I Monthly
Estimated Denied Revenue (7) $90,057.60(3*4*5)
Recovered Reimbursement (8) $63,040.32(2*4*6)
Lost Revenue (9) $27,017.28(7-8)
Estimated Cost Impact (10) $24,000.00(1*6)
Estimated Net Denial Impact(Revenue Loss)
$51,017.28(9+10)
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(5) Denial Rate (6) Denied Claims
16% 960
(5) Denial Rate (6) Denied Claims
6% 360
(1) Cost/Appeal
$25.00
(2) Success Rate
70%
(3) Avg Claims/Month
6000
(4) Revenue/Claim
$93.81
Scenario II Monthly
Estimated Denied Revenue (7) $33,772.60(3*4*5)
Recovered Reimbursement (8) $23,640.12(2*4*6)
Lost Revenue (9) $10,132.48
Estimated Cost Impact (10) $9,000.00(1*6)
Estimated Net Denial Impact(Revenue Loss)
$19,132.48(9+10)
$31,885.80
Revenue cycle challenge #2: Patient Responsibility
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https://www.kff.org/report-section/ehbs-2020-summary-of-findings/
The average deductible amount among all covered workers was $1,364 in 2020, up from $646 in 2010
Average Deductible Increases
26% of covered workers are in a plan with a deductible of at least $2,000 for single coverage
111% Increase
$646
$1,364
2010 2020
Revenue cycle challenge #2: Patient Responsibility
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Revenue cycle challenge #2: Patient Responsibility
We are seeing more billing to go to collections and/or written off
70%
18%
82%
30%
N = 224
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We are seeing longer time frames to collect payment in full
https://www.hfma.org/content/dam/hfma/Documents/PDFs/CareCredit-contentpillar-covid-consumerism-strategies.pdf
Somewhat + Very much so
Somewhat + Very much so
Not at all
Not at all
19%
81%
We are finding it more difficult to collect from patients
Somewhat + Very much so
Not at all
(1) InstaMed Trends in Healthcare Payments Ninth Annual Report: 2018(2) Becker’s Hospital Review -Kylie Kaczor 09/05/18
(3) The Association of Credit and Collection Professionals, Collector Magazine, February 2015
of patients would consider switching providers for a better healthcare payment experience (1)
56%of practices’ income comes directly from patients (2)
30% Collecting from patients could cost up to FOUR times more than collecting from payers (3)
4X
How does this challenge affect YOUR practice?
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Establishing a proactive revenue cycle model
Identify your current KPIs
1
Identify your opportunities
2Improve front office processes
3Improve business office processes
4
Measure success
5Create a loop of continuous feedback
6
Establish a PROACTIVE revenue cycle
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Proactive Model
Pre-Visit
Time of Service
Account Resolution
Pre-Visit
Time of Service
Account Resolution
Reactive Model
Benefits of a PROACTIVE revenue cycle
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Decrease write-offs
& bad debt
Decrease denials
Decrease days in AR
Decrease operational
costs
Increase employee
satisfaction
Increase patient
satisfaction
Increase revenue
Increase physician
satisfaction
Step 1: Identify your current KPIs
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Days in AR*: Average number of days it takes a practice to collect
31 AR over 120*:Percentage of AR that is greater than 120 days old
10% Adjusted FFS collection percent (NCR)*:Percentage of total potential reimbursement collected out of the total allowed amount
98% Denial rate: Percentage of claims denied by the payers
5%
*Data Dive – Cost and Revenue Survey 2021 Report Based on 2020 Data – Better Performing Practices for Multispecialty
Days in AR =Total payments - credits / Avg daily gross charge amount (Total gross charges/365 days)
AR over 120=Total AR over 120 / Total AR
NCR = Total payments - credits / Total charges -Contractual adjustments
Denial rate = Total # of denied claims / Total # of claims submitted
First Pass Resolution Rate vs. First-Pass Rate
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First pass resolution rate (FPRR): Percentage of claims that get paid upon first submission
95%First pass rate: Percentage of claims that do not get rejected by the clearinghouse nor the payer
98%
FPRR = Total # of Claims Paid / Total # of Claims Submitted
First pass rate = Total # of Claims Rejected / Total # of Claims Submitted
Why are your claims being rejected or denied?
Step 2: Identify your opportunities
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Demographic errors
Missing authorization
Credentialing
Coding errors
Billing errors
Do you have a denial management tool?1. Of course, we do
2. No, we have not been able to implement one
3. Almost there, we are in the process of getting/implementing one
4. Not applicable
Survey Question # 3
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Poll Key = FLBLE
Common Front-Office Opportunities
Step 3: Improve Front Office Processes
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Pre-visit processes check list
Step 3: Improve Front Office Processes
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Capture demographic information
Check eligibility &
benefits
Obtain prior authorization
Calculate patient out of
pocket expenses
Communicate payment
expectations
Collect pre-payments
Most patients are comfortable with estimates that fall within 10% of the actual cost
How do you calculate your patient estimates?
1. I wish, we do not have the tools to calculate estimates
2. We use a printed cheat-sheet or/and a spreadsheet
3. Our practice management system calculates the estimates
4. We have a third-party application that calculates the estimates
5. Other / Not applicable
Survey Question # 4
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Poll Key = OGQXB
How do you determine the allowable amounts?
1. Our contracts are loaded in the system
2. Our system uses historical 835 data
3. 1 & 2
4. We use a standard fee schedule
5. Other / Not applicable
Survey Question # 5
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Poll Key = NKAQH
80% of patients were surprised by a medical bill in 202086% of patients want to
know their patient responsibility upfront80% of patients want an
online estimation tool for provider visits
Transparency
71% of patients are confused by medical bills 30% of patients delay bill
payments because they don’t understand their responsibility 11% of patients are
uncertain about what payment method to use
Simplicity
82% of patients want to make their payments in one place75% of patients want to
enroll in eStatements from providers85% of patients prefer an
electronic payment method
Options
What do patients want?
Before the appointment (Time of service) check list
Step 3: Improve Front Office Processes
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Verify demographic information
Get a copy of the insurance
card
Check eligibility &
benefits
Verify prior authorization
Collect pre-payments Obtain ABNs
Chances of collecting after the patients leave the office drops to 62% (1)
Charge capture and coding processes check list
Step 3: Improve Front Office Processes
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Code services within 24 hrs.
Follow LCD & NCD
guidelines
Leverage technology: rules engine
Solve any real-time
edits
Reconcile encounters
Provide physician education
Common Business Office Opportunities
Step 4: Improve Business Office Processes
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Billing processes check list
Step 4: Improve Business Office Processes
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Leverage technology:
charge capture
Import charges daily
Reconcile encounters
daily
Leverage technology: rules engine
Submit claims & statements
daily
Solve rejections
daily
Insurance follow up check list
Step 4: Improve Business Office Processes
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Leverage technology:
queuing system
Address all denied claims
Address all unpaid claims
Check for payment
discrepancies
Prioritize based on
timely filing requirements
& $$
Prioritize based on payment
velocity & $$
Charges = AdjustmentsCharges = PaymentsAllowable ~ Contract
How do you track underpayments?1. We use an automated tool
2. We visually track it
3. We are implementing a process
4. We don’t track contract adherence
5. Not applicable
Survey Question # 6
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Poll Key = QVKQR
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Audit your contracts at least annually
https://www.mgma.com/data/data-stories/new-years-resolution-optimizing-audits-of-your-m
Automating Processes – RPA & ML
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• This is a subfield of artificial intelligence• Studies the ability to improve performance
based on experience• The more data is processed through ML the
smarter it gets
• Software technology that uses robots to emulate human actions interacting with digital system and software
• Can automate revenue cycle processes with humans only managing exceptions
Robotic Process Automation (RPA) Machine Learning (ML)
• Eligibility verification• Prior authorization• Payment posting• Claim status• Simple appeals (Medical records)
Use Cases for Revenue Cycle
• Improved employee morale• Productivity• Reliability• Accuracy
Benefits
Are you using Robotic Process Automation RPA?1. Of course, we do
2. No, we have not been able to implement one
3. Almost there, we are in the process of getting/implementing one
4. Not applicable
Survey Question # 7
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Poll Key = DQASQ
Which process are you automating through RPA?
Survey Question # 8
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Patient follow up check list
Step 4: Improve Business Office Processes
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Leverage technology:
credit card on file program
Leverage technology:
text messages w/ability to pay
Leverage technology:
payment plans
Leverage technology:
queuing system
Prioritize based on $$ & act quickly
Follow all debt collection rules
Step 5: Measure your success
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*Data Dive – Cost and Revenue Survey 2021 Report Based on 2020 Data – Better Performing Practices for Multispecialty
Days in AR*
31AR over 120*
10% Adjusted FFS collection percent (NCR)*
98%
Denial rate
5%First pass resolution rate (FPRR)
95%First pass rate
98%
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Step 6: Create a loop of continuous process improvement
Plan
DoCheck
Act
• Gather data• Identify opportunities• Establish a baseline• Develop a plan
• Implement changes• Monitor trends• Assess success
• Identify additional opportunities• Determine the next cycle
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Top 3 takeaways
Track your KPIs:•You can not improve what
you do not measure
01Be proactive:•Check eligibility•Estimate out-of-pocket
expenses•Use denials to improve
processes
02Empower your staff:• Seek and trust their feedback• Encourage continuing education
03
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Resource Links• Best Practices for Resolution of Medical Accounts– HFMA/ACA
https://www.hfma.org/content/dam/hfma/Documents/industry-initiatives/best-practices-medical-resolution-medical-accounts.pdf
• Patient Financial Communications Best Practices – HFMA https://www.hfma.org/content/dam/hfma/document/policies_and_practices/PDF/19968.pdf
• Role of Supervisory Guidance https://www.consumerfinance.gov/rules-policy/final-rules/role-of-supervisory-guidance/
• CFPB New Rules Tool Kit https://www.ontariosystems.com/accounts-receivable-management/cfpb-collections-new-rules-tool-kit/
• Standardizing denial metrics for revenue cycle benchmarking and process improvement https://www.hfma.org/industry-initiatives/standardizing-denial-metrics-revenue-cycle-benchmarking-process-improvement.html
• The Change Healthcare 2020 Revenue Cycle Denials Index https://www.changehealthcare.com/insights/denials-index
• Pre-Registration: Working the Health Care Revenue Cycle at the Earliest Patient Encounter: https://www.experian.com/assets/healthcare/white-papers/white-paper-pre-reg-working-the-healthcare-revenue-cycle.pdf
Paola Turchi, MSHCA, FHFMA, FACMPE, [email protected]