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Ralph Llewellyn – rllewellyn@eidebailly.com

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Accounts Receivable Days Gross Revenue Net Revenue Operating Margin Net Margin Days Cash on Hand Debt Service Coverage

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Every dollar found hits the bottom line Low hanging fruit is typical available

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A successful revenue cycle is a complex process which involves multiple  areas of your organization requiring constant interaction.

SCHEDULING
(-5
POST
PAYMENT REVIEW
CASH POSTING
REGISTRATION
INSURANCE
VERIFICATION
PROGRAM
ADMINISTRATION
SELF PAY
COLLECTIONS
CUSTOMER
SERVICE
THIRD PARTY
FOLLOW- UP
BILLING
CULTURE
PEOPLE
POINT OF SERVICE
COLLECTIONS
FINANCIAL
CLEARANCE
FINANCIAL
COUNSELING
DENIALS
MANAGEMENT
MGMT/QUR
o
CDMP
MEDICAL
RECORDS
CDM/CHARGE
CAPTURE

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Tools available Communication process Frequency Customize to your organizational structure Identify current KPIs and set targets

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Assure policies and procedures are in place to outline expectations. Shadow individuals to observe tasks. Instruct staff to document processes: Have other staff follow the steps to fill in gaps. Perform chart-to-payment reviews. Provide feedback for staff education and training. How often are P&P reviewed and updated?

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No standardization of processes Variation in charge capture Non-compliance with billing rules and regulations Inability to hold staff accountable Billing delays when staff member is out of the office

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Days in A/R: < 45 Days Aged Insurance Pending A/R as a % of Total Ins Pending A/R Report by discharge date < 20% over 90 days  < 5% over 180 days (By financial class and further into any carriers with  timely filing limits < 180 days.  Remove credit balances) Discharged Not Final Billed-DNFB < 5 days of average daily revenue Credit Balances < 1 day of daily revenue Denial Write-Offs < 1% of monthly net revenue Point of Service Collections > 3% of monthly net revenue Registration Error Rate < 5% of daily registered patients Mail Return < 5% of mailed items Claim Hold Days 2-3 business days

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Summary aging sorted by: Financial Class Aged by buckets ( unbilled, 0-30, >30, >60, etc.) Date of service when working timely filing Last billed date when working aged accounts with activity Without credit balances Detail aging to focus on:  Timely filing limits – accounts at risk Credit balances (state unclaimed property) Aged accounts with payment still in primary financial class Established high dollar amounts Unapplied payments

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A screenshot of a cell phone

Description generated with high confidence

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Contractual   Post  only as reported on remittance advice. Denied charges that can be appealed. Administrative adjustments based on organizational policies and procedures: Small balance write-off Untimely filing Provider not enrolled Medical necessity Late Charge Medicare Bad Debt (ability to run report) Segregation of duties: Biller completes log for review by coworker Manager approves Posted by data entry clerk or payment posting staff

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Can “make or break” the patient experience  Frontline of the organization’s customer service Keep registrars informed of changes  New service being provided Provider joining organization Media release When faced with a new challenge, who can assist with resolution? Grievance process Phone etiquette    Patient focus vs. answering incoming calls  Knowledge of billing system   current  balance/payment verification

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50% of claim data originates with the Registration Staff Patient demographic information Encounter specific information Insurance coverage Primary vs. secondary or tertiary Insured Relationship to insured Group number Remaining 50% is comprised of Coding, Charge Entry and Billing required data.

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Identify patient  Choose patient type based on services to be provided Verify insurance eligibility PCP referrals Determine pre-authorization status Complete required registration document Obtain/explain signature requirements HIPAA notice Conditions of Admission/Consent for treatment Patient Rights and Responsibilities Medicare Secondary Payer Questionnaire  Collect copay or minimum balance  Substantial increase in patient deductibles  Scheduling Patient Portal education

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Verification of coverage Phone call Online payer portals  Vendor (billing system or clearinghouse) Price estimates Online credit card and receipt processing Insurance card scanner Payment options Scripting (essential for upfront collection success)

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Do these duties belong in Patient Access?

How do we expect registration staff to perform these duties? ABN – LCD/NCD should be built into order entry Pre-authorization – Before services are performed May not be aware until patient has presented Often lack Privacy to discuss diagnosis with patient Medical terminology skill set to answer questions Access to provider when issues arise Consideration for “need to know”.

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Yearly Review Regulatory updates HCPCS and ICD-10 changes – Bundling/Unbundling Revenue Reliability Updates to billing system – Crosswalk to G/L  Payer Changes Pricing   Contract constraints Compare to highest paying fee schedule Medicare pays lesser of MPFS or charge Compliance Overarching governance and oversight of the Revenue Cycle functions

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Missed charges results in missed revenue opportunity: Revenue and usage report review Charge capture process: Documentation generated charges vs. manual entry  Paper charge tickets System interface issues Charge reconciliation    Assure all charges match patient record: Facility fee identified as site of services Drugs & supplies Infusion – Injection - Hydration Lab and Radiology Therapy services Contracted services Venipuncture

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How do CPT/HCPCS Codes get assigned  HIM adds to revenue code line during coding Hard coded into the Chargemaster Pharmacy Unit mismatch with HCPCS code  Amount administered doesn’t crosswalk exactly to HCPCS code definition Missing JW modifier reporting for medication waste Omission of outpatient nursing procedures IV therapy, injections, blood administration Unbillable due to missing nursing documentation Start and stop times Administration sites Drugs administered Flu/Pneumo vaccinations administered during inpatient stay Separately billable on the 012X type of bill to Medicare Part B Use discharge date regardless of date administered

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Payers are tightening their reimbursement by passing on changes to the providers: Tougher negotiations Complex contract terms Increasing denial rates Underpaying providers based on contracts Contribute to major drains on margins: Average facility loses 5% of annual revenue Preventable revenue loss Are staff aware of what’s in your contracts?

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Monitor reimbursement amounts to assure they align with payer contracts. Contact payer when underpayment is identified: Ability to have claim reprocessed vs. appealed Claim corrections and resubmission: Online options Identify denied line items and action required: Noncovered vs. denied

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Bill hold days Documentation not signed off on in EHR Monitoring reports Incomplete/inaccurate key patient data from registration Have registrar correct for education Late Charges Nonexistence of account notes in billing system for follow-up

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Payer specific portal to check claim status and make adjustments: Medicare Direct Data Entry (DDE) Payer portal sign-on with passwords Work queues: Payer specific vs. alpha-split Denials  Aged accounts Registration errors Coding edits

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Internal billing software edits. Clearinghouse edits. Transmission reports - Compare to system generated claim counts: 837 – Claims transmitted 999 – Acknowledges receipt of claim file 277 – Acceptance file (rejected claims) Work rejected claims within 24 hours: Skews billing reports when system shows claim was dropped but insurance company didn’t accept. No remittance advice denial will be received.

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90% of all denials are preventable. About 2/3 of these are recoverable. Payers may not allow an adjusted claim (be aware of contracts). Resolution and effort involved to overturn denials. Financial impact of denials on the organization’s bottom line.

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3%
MEDICARE
Denial Rate
MEDICAID
- 2017
COMMERCIAL
OTHER

Appeal Success Rate
- 2017
1%
MEDICARE
MEDICAID
OTHER
*50th
6%
COMMERCIAL
75th

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Conduct initial assessment to identify gaps in outstanding accounts. Consistent report monitoring: Daily, weekly, monthly, quarterly, yearly Compare findings from week-to-week or month-to-month, etc. Develop Action Plan as issues arise. Run reports in limited quantity to finish review of all accounts: Focus on assigning accounts by alpha Date of service ranges

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CAH Method I Professional services are billed on CMS-1500 to Medicare Part B  Paid at 100% of the allowed amount (80% Medicare + 20% coinsurance) Technical services billed under RC 037X on the CAH UB-04 TOB 085X Paid at 101% of reasonable cost CAH Method II Professional Charges Outpatient are billed on the UB-04 under revenue code 0964 with CAH NPI TOB 085X only QZ modifier is appended to HCPCS code Paid at 115% of the allowed amount  Inpatient billed on CMS-1500 to Medicare Part B  Paid at 100% of allowed amount Technical services billed under RC 037X on the CAH UB-04 TOB 085X Paid at 101% of reasonable cost for anesthesia and supplies

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CAH electing/qualifying for Pass-Through Exemption All professional services are billed on the CAH UB-04 under RC 0964 to Medicare Part A TOB 085X, 011X and 018X (Outpatient, inpatient and swing-bed claims) Reimbursed at 100% of reasonable cost Technical services are billed under RC 037X on the CAH UB-04  TOB 085X paid at 101% of reasonable cost TOB 011X and 018X payment included in the daily per diem rate (reasonable cost) NOTE:   Medicare and most other payers require billing minutes not units when billing CRNA professional services

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Formerly referred to as “Locum Tenens Arrangements”. Substitute physician who practices in place of another physician who is temporarily absent for no more than 60 continuous days. Vacation Medical leave Continuing education Sabbatical Physician leaves a Group practice	 Medicare definition of physician Modifier Q6

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A non-physician provider NP, PA, CNM,  do not meet the definition A substitute provider cannot be a non-physician provider nor can be billed as one Billing option while waiting for enrollment Used to grow a practice Caution when using outsourced agency to fill ER schedule

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Cost to collect upfront less than when done on the back-side Net patient revenue collected at POS Nationally best practice collections are 2.68%  Midwest average is .04% to 1.23% for high performing organizations Prompt Pay Discounts Average organization offers 20% Range is from 10% to 50% Nationally Midwest average prompt pay discount is 15% - 20% Cost to Collect  Full cost to collect divided by net patient revenue Nationally    Total 3% Point-of-service 0.07% Business Office 1.20% Midwest    Total 4% Point-of-service 0.93% Business Office 1.81%

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Posting  errors Corrected/ adjusted claims Posted to  incorrect  encounter Primary payer disputes Coordination of benefits Duplicate payment Liability claim Overpayment  Patient payments Transfer  balance  Up-front collections

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Lay the foundation on the front end: Patient expectations Options available Share deductible/coinsurance information Educate staff so as to communicate same message throughout each step of patient encounter. Follow-up with patient balance due in a timely manner. Establish policies and procedures and follow them for self-pay balances. Look for opportunity to automate processes and reporting capabilities. Publish contact information on all correspondence and website.

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Frequency of statements Manual vs. automated process Weekly vs. monthly Prompt pay discounts – post adjustment at time of payment At time of service Within “XX” days from first statement Negotiating tool for large balances remaining due Underinsured vs. Uninsured Minimum balance Guarantor Patient Contract requirements (Medicaid copay amounts)

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Optimize revenue growth without relying entirely on new volumes.  Reduce revenue erosion Shift the organizational thought process to performance which centers on collection of the services provided.  Software & clearinghouse edits don’t make up for  Missed charges Undocumented services (start/stop times for infusion or observation) Documentation that doesn’t support medical necessary New Services Notification of coding and billing staff Medical necessity rules  Documentation requirements Focus on assisting with obstacles the revenue cycle is facing vs. blame.

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Shift Ownership to the stakeholders.  Ancillary departments Providers Management Look to three key areas for overall organizational success. Physicians Provide documentation training to explain the revenue impact of inaccurate documentation. Address and work together on their pain points with the revenue cycle process. Target ways for staff/tools to maximize their performance. Patients Faced with higher financial obligations for healthcare services than in the past. Educate them on their coverage/out of pocket obtained at time of insurance verification.  Be prepared to offer options for meeting financial responsibility. Payers Insurance Matrix

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Revenue Cycle cannot continue to operate in a silo. Whose job is it? Seek buy in from all departments within the organization.  Send the same message to your patients and communities in every area of the organization. Dedicate IT staff.  Focus on letting the public and staff know that your organization WANTS to be the best.

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Providers  Pre-authorizations  Provider not enrolled Referrals Documentation deficiencies Medical necessity denials - ABN Coding Incidental service denials due to lack of modifiers Assure proper coding of combined accounts for same DOS Claims processing Timely filing limits Appeal processes Account follow-up

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Supporting Revenue Cycle at the highest level Top leadership that understands and appreciates critical role of financial performance in supporting care delivery. Garnering appreciation from non-finance staff Perform Revenue Cycle 101 training to non-revenue cycle departments. Demanding high performance Leadership demonstrates passion to do better and drives excitement around improvement initiatives.  Celebrating success Foster an attitude of gratitude. Make innovations a priority Focus on staff willingness/adapters of new processes and technologies. Willingness to devote time and resources to issues affecting financial services. Help participants understand positive impact within their own departments.

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Are you prepared to lead the Organizational Culture change as it relates to the Revenue Cycle?

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J.A.

The revenue cycle

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