Rev Up Your Revenue CycleAnalyzing Operations toEnhance RevenueCommunity HealthCare Association of the Dakotas

August 15, 2006

Presented by Rebekah S. Wallace

CMPE, CPC

Agenda

Measure Key Indicators Available Benchmarks

Organize Analysis Plan Development

Move Motivate Implement

Monitor Re-assess

Objectives

Discuss specific key performance indicators Review industry benchmarks Discuss how to communicate results &

motivate action Determine what the numbers mean & how to

identify root causes of problems Discuss action plan development & ongoing

assessment

“A goal without a plan is just a wish.”

--Antoine de Saint-Exupery

What are the Goals for Your Health Center? Financial Stability Customer service focused Experience growth Expanding services Satisfied providers and staff Excellent patient care

Revenue Cycle

What is the revenue cycle? Begins with appointment scheduling and ends

with payment resulting in zero balance due How do I know if we are doing a good job? The numbers don’t lie….

Measure…..Start Here!

Operational Measures Patient satisfaction

Can be conducted internally or externally Conduct prior to making changes to obtain

baseline data Keep questions simple & limited (around 5) to

encourage completion Share results with staff – do not keep secret! Conduct regularly

Operational Measures

Patient cycle time – Measuring the length of time from the patient’s entry to the patient’s exit Note time patient signs in & time patient

checks out If average wait time is unacceptable to clinic,

study can be expanded to include key stops in the cycle

Operational Measures

Cycle time vary from specialty to specialty – medical practices typically range from 30 to 90 minutes

• Mastering Patient Flow, MGMA

Patient Cycle Time

Date: June 22, 2006Appointment Time: 9:15 a.m.Length of Scheduled Appt. Time: 15Provider: Welby

Key Area Time1. Time patient checks in 9:03 a.m.2. Time patient was registered 9:15 a.m.3. Time clinical staff member received pt. 9:23 a.m.4. Time clinical staff member left patient 9:40 a.m.5. Time provider came in the room 10:00 a.m.6. Time provider left the room 10:20 a.m.7. Time patient left the exam room 10:20 a.mComments

Operational Measures

New Patients How many new patients is the Health Center

acquiring on a monthly basis? Factor in determining growth of the center &

can assist in strategic planning

Operational Measures

Patient Visits Track patient visits by provider by the month Fluctuate staffing to cover seasonal & daily

peaks & valleys Track & question if patient volumes decline or

do not increase as expected

Operational Measures

Time to next available appointment Varies by specialty Sick patients seek prompt care or they will go

elsewhere Appointment No-Show rate

Track no show rates by provider on a monthly basis

Best Practices maintain no show rates of less than 10%

Operational Measures

Phone Volume The phone is your friend Track your phone volumes & reasons for calls Staff appropriately during peak times ….

Monday mornings! Minimize unnecessary phone calls – set

expectations for your patients on prescription calls, test results, etc.

Perfect World Medical Practice Incoming Telephone Call LogDate: ___________Position: Check out receptionist

Prescription Scheduling Referrals Test Results Referrals Nurse Other Totals7 to 8………………………………………………………………………………..8 to 9………………………………………………………………………………..9 to 10………………………………………………………………………………10 to 11…………………………………………………………………………….11 to 12…………………………………………………………………………….12 to 1………………………………………………………………………………1 to 2 ……………………………………………………………………………….2 to 3 ……………………………………………………………………………….3 to 4 ……………………………………………………………………………….4 to 5………………………………………………………………………………..5 to 6………………………………………………………………………………..Totals……………………………………………………………………………….

Revenue Cycle

Revenue Cycle Measures Days in Accounts Receivable Collection percentages

Amount of Accounts Receivable outstanding >120 days

Charge posting log Denial percentages

Revenue Cycle Measures

Days in Accounts Receivable Total accounts receivable

Divided by Gross FFS charges * (1/365) Best Practice varies by specialty

• Multispecialty, all owners 39.48 Make the result visual Calculate overall & by payer

Key Performance Indicators

Net Charges to Cash Collections: 95-97% Work with your system Separate by payer-mix Estimate based on payer-mix & number of

encounters

Revenue Cycle Measures

Percentage of accounts receivable outstanding > 120 days Median 20% * Best Practice 10%*

*MGMA Cost Survey 2004

Revenue Cycle Measures

Monthly Patient Revenue Collected Total dollars collected each month

• Previous six months• Same month past two years

Influencing Factors• Changes in number of encounters• Changes in payer-mix

Revenue Cycle Measures

Total Patient Revenue Collected

$0.00

$100,000.00

$200,000.00

$300,000.00

$400,000.00

$500,000.00

$600,000.00

April-05 May-05 June-05 July-05 August-05 September-05 September-04 September-03

Series1

Revenue Cycle Measures

Charge Posting Lag: < 2 days In clinic should be done at the conclusion of

the visit Offsite – within three days of service

Revenue Cycle Measures

Missing Charge Rate: < 1% % of unbilled charges compared to services

performed < 1% of charges missed on audit Missing encounter forms, daily reconciliation

of encounter forms to schedule

Revenue Cycle Measures

Claim Denial Rate Target = < 5% of total claims Reduce re-work & get paid faster What is your denial rate?

Revenue Cycle Measures

Bad Debt Rate: < 3-5% of Net Revenues Bad debt write-offs divided by net revenues Watch improper use of contractual

adjustments Average bad debt as % of self-pay charges =

9% 2004 UDS

Patient Accounting Personnel

Accounts handled per biller per day (Billing) Median = 75 (Range 15 to 1,000)

Accounts handled per day (Collections) Median = 40 (Range 12 to 125)

Patient Accounting Support Staff per provider Range = .65 -.87 FTE per provider FTE Manager, coding, charge entry, insurance,

billing, collections, payment posting, refunds, adjustments, cashiering

Denial Management

Decide how to correct, critical thinking Is the denial something that can be corrected If so, what steps should be taken

Create “common denials” & action spreadsheet By Payer CPT/HCPCS Code, denial code, action to take Accessible on the network to all billers

Denial Management

Decide how to correct, critical thinking How many duplicate claims does your health

center submit?• Busy work, inefficient• Delays payment (again)

Proactive Denial Management

Formal denial analysis Use denials to train & make operational

changes Denial analysis spreadsheet or system

generated reports• Summary• Detailed• Graphic depiction

Denial Spreadsheet Summary

Payer Clinic RA Date # DenialsTotal

Claims% Total

Denials

Medicare Part B 7/22/2005 0 8 0.00%

Select Benefit Administrators 7/15/2005 1 1 100.00%

Medicare Part A 7/25/2005 0 1 0.00%

Medicare Part A 7/14/2005 0 18 0.00%

Medicare Part A 7/20/2005 3 19 15.79%

Medicare Part A 7/6/2005 0 102 0.00%

Medicare Part B Iowa   7/1/2005 14 67 20.90%

Totals     18 216 8.33%

Denial Detail Spreadsheet

Type of DenialSample

# ANSI Percent Description of Denial

           

Billing 95 18 29.40% Duplicate Claim/Service

Billing 35 29 10.80% Time limit for filing has expired.

Registration 25 24 7.70%Payment for charges adjusted. Charges are

covered

       under capitation agreement/managed care

plan.

Denials by Functional Area

59.50%

27.80%

7.20%

5.50%

Billing

Registration

Other

Clinical

Financial Measures

Gain/loss per provider RVUs generated by provider Staffing ratios Patients seen by provider Gross charges & collections generated by

provider Clinic Fee Schedule Coding utilization

Financial Measures

Gain/Loss per provider Budget expected Understand & communicate to provider &

management what will need to be done to achieve target

Monitor monthly and year-to-date

Financial Measures

RVUs generated by provider Relative units of measure that indicate the

value of health care services and relative difference in resources consumed when providing different procedures or service

Standardized, unbiased method of analyzing resources involved & professional work component assigned

Financial Measures

RVUs generated by provider Can be utilized to benchmark provider

productivity Compensation per total or work RVU Expense per RVU Etc.

Financial Measures

Staffing ratios Varies by specialty Typically calculated by FTE physician

• Multi-specialty, hospital owned, greater than 50% primary care physicians

− Best Practice, total support staff per FTE physician = 4.12

Staffing Ratios

  Category   Medical Group Management

  Per FTE Physician Association  

General Administrative - Admin. Assistants, Chief Officers, 0.25 per 1 FTE Physician

directors, site managers, human resources & marketing staff    

Patient Accounting Support Staff - Business Office manager, 0.72 per 1 FTE Physician

insurance, billing, credit, cashiering, collections, charge entry staff    

General Accounting Support Staff - accounting, bookkeeping 0.08 per 1 FTE Physician

& accounting data input staff      

Staffing Ratios

  Category   Medical Group Management

  Per FTE Physician Association  

Information Technology - data processing, computer 0.11 per 1 FTE Physician

programming & telecommunications staff      

Housekeeping, Maintenance, Security -   0.14 per 1 FTE Physician

housekeeping, maintenance & security staff      

Medical / Receptionists - medical receptionists, switchboard 1.16 per 1 FTE Physician

operators, schedulers, & appointment staff      

Staffing Ratios

  Category   Medical Group Management

  Per FTE Physician Association  

Medical Records -     0.31 per 1 FTE Physician

medical records, coding & x-ray film library staff      

Clinical Support Staff - registered nurses, licensed practical 1.49 per 1 FTE Physician

nurses, medical assistants & nurses aides.      

Total employed support staff   4.94 per 1 FTE Physician

         

Financial Measures

Patients seen by provider Set expectations Monitor and communicate Compare to national benchmark of peer

providers

Ambulatory Encounters

    25th Percentile 50th Percentile 75th Percentile

Family Practitioner   3,265 4,185 5,088

Pediatrician   3,549 4,476 5,511

Nurse Practitioner   2,351 2,992 3,740

Physician Assistant 2,814 3,297 4,543

Pediatric Nurse Practitioner 1,633 2,730 3,641

OB/GYN General   2,102 2,892 3,794

• MGMA 2005 Physician Compensation & Production Survey

Financial Measures

Gross charges & collections generated by physician Measure & communicate monthly Set targets Compare to industry benchmarks by specialty

Financial Measures

Clinic Fee Schedule Is there a standardized methodology for

establishing fees? Is every procedure code evaluated in

comparison to your payer allowable? Are you leaving money on the table?

Fees-Standardized Methodology

Utilizing RVUs provides consistent, objective methodology for health centers to establish fees

Conversion factors established by Center Multiple conversion factors can be

established for varying sets of CPT codes i.e., Evaluation & Management codes 99201-99499 can

have a different conversion factor form Surgery codes 10021-69990 if desired.

Fees –Standardized Methodology

Fees can be easily adjusted when Health Center updates conversion factor

Same methodology that some payers are using to reimburse you

Conversion Factor

$ number that payers use to convert RVUs into reimbursable amount

$ number that Health Center can use to convert RVUs into fees for services provided

Medicare conversion factor for 2006 = $37.8975

Sample Fee Schedule

Conversion Factor = $63.00

      Sample Sample Sample Sample

Code: Description: RVU StandardMedicare

Part Insurance Insurance

      Fee

B Allowa

bleCompany

ACompany

B

99202 Office/ Outpatient Visit 1.72 108.36 60.57 107.50 99.76

             

99203 Office/Outpatient Visit 2.56 161.28 90.13 160.00 148.48

             

99222 Initial Hospital Care 2.98 187.74 107.79 186.25 172.84

             

99231 Follow up 0.90 56.70 32.52 58.25 52.20

  Hospital Care          

Financial Measures

Coding Utilization Compare individual providers evaluation &

management code utilization to CMS & national data by specialty

Display graphically Significant variances could indicate under/over

-coding issues Conduct coding & documentation review

E & M Coding Utilization Example

New Patient Evaluation & Management Visits

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

40.00%

45.00%

50.00%

Provider Data

CMS Data

MGMA Data

Provider Data 0.00% 24.48% 33.85% 36.98% 4.69%

CMS Data 2.65% 20.46% 42.89% 27.11% 6.87%

MGMA Data 8.50% 38.46% 40.31% 10.96% 1.77%

99201 99202 99203 99204 99205

E & M Coding Utilization Example

Established Patient Evaluation & Management Code Utilization

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

Provider Data

CMS Data

MGMA Data

Provider Data 0.62% 28.11% 45.83% 25.06% 0.37%

CMS Data 3.99% 8.37% 59.55% 25.59% 2.48%

MGMA Data 2.01% 17.44% 66.07% 13.45% 1.03%

99211 99212 99213 99214 99215

E & M Coding Utilization Example

We’ve Got Issues… NOW WHAT?

“If you have always done it that way, it is probably wrong.”

--Charles Kettering

Organize

Revenue Cycle Assessment Detailed review of processes which impact

your revenue cycle…..• Scheduling• Patient Registration• Pre-Appointment Activities• Charge Structure & Contracting• Charge Capture• Billing & Accounts Receivable Management• Patient Collections

Organize

Start with no preconceived notions Document work flow Interview Staff Compare actual work to internal policies Compare to “best practices”

Organize

Scheduling Scheduling templates Call volumes Walk-ins

Patient Registration Accuracy Privacy Pre-registration

Organize

Pre-Appointment Insurance verification Check for outstanding balances Check for needed updates to financial

information Pre-appointment calls

Organize

Charge Structure & Contracting Reviewed & updated annually Charges cover costs Contracts pay at or above Medicare FFS No specific unaddressed payment issues with

commercial insurance plans

Organize

Charge Capture Onsite: entered immediately after the patient

visit – before the patient leaves the premises Reconciled daily to ensure no lost charges Offsite: within three business days

Organize

Billing & Accounts Receivable Management Claims out within two days of date of service Claim denial rate < 5% Duties segmented by payer type

(& cross trained)

Organize

Patient Collections Everything possible collected at the time of

service Expectations are established for patients and

employees Onsite financial counseling Consequences for nonpayment

Organization

Patient Collections “Utopia” 100% collections of all non-insured self-pay or

sliding fee scale balances for current & previous visits

Insured patient’s co-payments, deductibles & coinsurance received at the time of service

Patient Collections

Largest obstacles to collecting dollars at the time of service? Staff concerns Lack of staff training Expectations for patients are not established Lack of consequences

Manage

Analysis of data gathered during review Review all notes, data for each process Look for inefficiencies Identify gaps Get others involved Develop solutions for identified issues

Manage

Plan Development Write down the following

• Description of the change• Reason for the change• Potential financial impact of the change (where

possible)• Personnel or departments involved

Prioritize changes – easiest to implement & most financial impact- do first

ManageDetailed Action Plan Sample

  Action: Start: End: Person:

1Better communication TOS payment

expectation      

1.1 Review credit & collection policies 5/1/2005 5/15/2005 Jane

1.2 Develop written payment policy      

1.21Prepare list of key elements for payment

policy 5/15/2005   Bill

1.22 Draft text of policy 5/20/2005   Bill

1.23 Review by CFO 5/21/2005   Jane

1.24 Present to Board for Approval 6/14/2005   Jane

1.25Train registration/intake personnel - new

policy 6/20/2005   Lynn

1.26Begin requiring all new patients to sign as

part 7/1/2005   Lynn

 of registration; existing patients to sign at next

visit      

         

“Change has a considerable psychological impact on the human mind. To the fearful it is threatening because it means that things may get worse. To the hopeful it is encouraging because things may get better. To the confident it is inspiring because the challenge exists to make it better.”

--King Whitney Jr.

Motivate

How do you motivate staff to change? Communicate, communicate, communicate

• Goals• Changes• Timeliness• Progress

Involve staff in change process, incorporate their ideas

Move

“It’s not that some people have

willpower & some don’t. It’s that some

people are ready to change & others

are not.”

-James Gordon, M.D.

Move

Communicate to Motivate How the health center needs to change Why the health center needs to change Current financials Health center goals Each staff person’s role Do a formal presentation

Monitor

Track selected measures on monthly basis

Share & post results

Modify plans when necessary

Celebrate

Celebrate progress & successes

Sincere thank you will go a long way

Keep momentum going

Maintain enthusiasm

Final Thoughts

Ongoing Process

Flexibility is key

Be open to employee suggestions

If a first you don’t succeed……..

Final Thoughts

“I have not failed. I’ve just found

10,000 ways that don’t work.”

-Thomas Edison

Questions?

Rebekah S. Wallace CMPE, CPC

rwallace@bkd.com

Thank You!

BKD, LLP

901 E. St. Louis Street, Suite 1000

Springfield, MO 65801-1190

417-865-8701

@bkd.com