Healthcare Revenue Cycle and Collection Considerations

Transcription

1 Healthcare Revenue Cycle and Collection Considerations Vince Marzula, BNY Mellon Paul Ishizuka, University of Washington January 30, 2012

2 UW Medicine School of Medicine, 4 hospitals, 30 primary care clinics, air ambulance company $3.6B; $1B SOM; $2.6B clinical enterprise; more than 30% of overall UW revenues and growing 65K admissions; 1.7M O/P and ED visits to hospitals and clinics 20,000 employees 2

3 Roadmap National Healthcare Update National issues Moody s outlook UW Medicine specifics for illustration Significance of the Revenue Cycle - Performance Improvement 3

4 The Last Two Years Focus. Healthcare providers have focused on improving profitability and managing liquidity and risk Repositioning. Steps to reposition to a new business model: higher quality, lower cost and increased scale Ramifications: Improved cost management, consolidations of hospitals into systems, alignment with physicians, direct focus on quality as a means to reduce costs. 4

5 Moody s Negative Outlook for FY 11 Moody s Investors Service CY 10: Stable operating margins and solid cash flow Rebound of markets and thus investment income Slowing of capital expenditures Negative outlook FY11 expect downturn in medians next year The economy. Weakening growth rates in revenues and volumes Cost savings harder to come by Capital spending on facilities on the rise Accelerated acquisitions and mergers Growing importance of governance and management 5

6 Concerns Supporting Challenges and Negative Outlook Top Line Pressures It s the economy, stupid Federal US economy stagnant. Inevitable Medicare reductions State economies face depressed revenue streams, historically high levels of unemployment Decreases in Medicaid/State funding Higher bad debt/charity care due to high unemployment Lower volumes Commercial payers - Lower rate increases; Future threat of Exchange-driven decline in employer-based health insurance Need for capital to update/reconfigure facilities Lack of sustained ability to improve efficiencies and reduce costs further 6

7 Gross Revenues HMC FY2011 Gross Revenue (000s) by Payor UWMC FY2011 Gross Revenue (000s) by Payor Commercial - $574,979 38% Medicare - $404,296 27% Medicare - $446,296 30% Commercial - $743,659 49% Self Pay - $178,050 12% Medicaid - $342,234 23% Self Pay - $59,336 4% Medicaid - $259,629 17% 7

8 UWMC Payor Profitability by FY Reported in Millions Commercial operating margin (profitability) has doubled in the last five years, while government $116 payors have generated operating losses. Collectively, Medicare and Medicaid operating losses have doubled during the same time period. $102 $125 $60 $70 FY07 FY08 FY09 FY10 FY11 $(12) $(26) $(15) $(39) $(14) $(31) $(40) $(22) $(35) $(46) Commercial/Other Medicaid Medicare 8

9 Cost Containment - View from Other States 9

10 Overall Net Revenue Impact HMC Impacts FY15 FY16 FY17 NET Shift from Commercial to Exchanges $ (13.0) $ (26.1) $ (39.2) NET Shift from Unsponsored to Exchanges NET overall impact $ 3.1 $ 1.4 $ (1.6) NWH Impacts FY15 FY16 FY17 NET Shift from Commercial to Exchanges $ (3.6) $ (7.2) $ (10.8) NET Shift from Unsponsored to Exchanges (0.2) (0.5) (0.9) NET overall impact $ (3.8) $ (7.7) $ (11.7) UWMC Impacts FY15 FY16 FY17 NET Shift from Commercial to Exchanges $ (16.4) $ (32.8) $ (49.0) NET Shift from Unsponsored to Exchanges NET overall impact $ (11.3) $ (26.7) $ (41.9) Total Impacts FY15 FY16 FY17 NET Shift from Commercial to Exchanges $ (33.0) $ (66.1) $ (99.0) NET Shift from Unsponsored to Exchanges $ 21.0 $ 33.2 $ 43.6 NET overall impact $ (12.0) $ (33.0) $ (55.4) 10

11 UWMC SOM Funding Trend 1.0 lions Dollars in Mil $ $90 $80 $70 $60 $50 $40 $30 $ Residency Directors ISIS Deficit Residents & Fellows HFFs Clinical Shortfall/Program Support $ $- FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 updated 10/10/11 11

12 IT Expenditures 35,000,000 30,000,000 25,000,000 20,000,000 15,000,000 10,000,000 5,000, Budget Operating Expenses (Net, Excludes Depreciation) Capital (Cash Disbursed) 12

13 UWMC Facility Expansion $300M 13

14 FY12 Process Improvement Progress FY 2012 (7/1/11-6/30/12) Pillars Total All Pillars Supply Revenue Transformation Chain Cycle of Care FY12 Total % FY12 Total Dates reported 7/1/11-9/30/11 7/1/11-8/31/11 7/1/11-9/30/11 FY12 Target $5,500,000 $13,100,000 $1,400,000 $20,000, % FY12 Realized $530,303 $1,674,810 $62,196 $2,267,309 11% FY12 Cost Avoidance $345,777 $345,777 FYTD Expected Target $1,375,000 $2,183,333 $350,000 $3,908,333 20% % Realized to Target 9.6% 12.8% 4.4% 11.3% $20,000,000 $17,500,000 $15,000,000 FY12 Target FY12 Realized $12,500,000 $10,000,000 $7,500,000 $5,000,000 $2,500,000 $0 Supply Chain Revenue Cycle Transformation of Care FY12 Total 14

15 Last Comments Indicators of Successful Management for Not-For-Profit Hospitals Ultimately, t l successful management teams are able to establish strong credibility, which is the underlying driver of many of these characteristics. Credibility can be established through: A demonstrated track record of meeting budgets Effectively implementing strategies Timely response to challenges Producing consistent, reliable and predictable operating performance Timely disclosure of favorable and unfavorable events *Moody s Investors Service, Special Comment August

16 FY12 Process Improvement Progress FY 2012 (7/1/11-6/30/12) Pillars Total All Pillars Supply Revenue Transformation Chain Cycle of Care FY12 Total % FY12 Total Dates reported 7/1/11-9/30/11 7/1/11-8/31/11 7/1/11-9/30/11 FY12 Target $5,500,000 $13,100,000 $1,400,000 $20,000, % FY12 Realized $530,303 $1,674,810 $62,196 $2,267,309 11% FY12 Cost Avoidance $345,777 $345,777 FYTD Expected Target $1,375,000 $2,183,333 $350,000 $3,908,333 20% % Realized to Target 9.6% 12.8% 4.4% 11.3% $20,000,000 $17,500,000 $15,000,000 FY12 Target FY12 Realized $12,500,000 $10,000,000 $7,500,000 $5,000,000 $2,500,000 $0 Supply Chain Revenue Cycle Transformation of Care FY12 Total 16

17 The Bank of New York Mellon BNY Mellon is a leader in Investment Management and Investment Services Investment Management Investment Services Asset Management Wealth Management Securities Servicing Treasury Services Multi-boutique investment manager 8 th largest US asset manager 2 Wealth management for individuals and families Oldest private bank established in US 11 th largest Top 3 global asset manager 3 ranked private bank in US 4 Full range of financial operations offerings $1.3 trillion $171 billion $26.3 trillion $1.7 trillion assets under management 1 in private client assets 1 assets under custody and administration 1 $11.8 trillion outstanding debt serviced 1 $1.8 trillion tri-party balances daily 1 Cash management and global payments services average payments processed daily 1 162,000 transactions conducted daily currencies in which we transact Healthcare Focused Expertise Design and deliver innovative healthcare revenue management solutions Combine healthcare revenue cycle solutions, financial services, and investment management solutions into a comprehensive, client centered approach Provide unparalleled customer service 1 Aggregate assets under management of $1.2 trillion 2 Institutional Investor, Pensions & Investments, Barron s Penta, Proprietary content of The Bank of New York Mellon Corporation The Bank of New York Mellon Corporation. All Rights Reserved. 17

18 Healthcare Industry Observations The administrative cost Increased patient responsibility The Insurance shift Fast growing High Deductible Plans Plan Sponsor cost sharing Non insured or under insured Declining Medicare and Medicaid reimbursements Changing business models Proprietary content of The Bank of New York Mellon Corporation The Bank of New York Mellon Corporation. All Rights Reserved. 18

19 BNY Mellon s Revenue Cycle Management Proprietary content of The Bank of New York Mellon Corporation The Bank of New York Mellon Corporation. All Rights Reserved. 19

20 Healthcare Provider/Payer Workflow Healthcare Provider / Payer Workflow Payers Contract t Negotiations: Define plan terms with employers, providers, and individuals Pre payment actions: Claims Processing actions: Payment actions: Eligibility, Authorization, Receive paper or electronic Initiate payment (ACH or Referral verification claims and adjudicate (EDI check) EDI 270/271/278 file 837) Send Remittance detail exchanges Claim status (EDI 276/277) (EOB, EDI 835/ERA) (270/271/278) (837) (276/277) (835) Providers Pre-Admin/Admin actions: Registration Eligibility, Authorization, Referral verification Estimation service Charity Care Identification Ability to Pay Collect copay/deductable POS payment Post-visit actions: Charge validation/ charge to code validation Deposit POS payments Post POS payments to patient account Insurance billing / claims submission (Commercial, Government, private) Remittance activities: Review claims status Reassociation Process Post electronic remits (direct, image lift & patient) Post manual remits Work exceptions Contract Management/Denial Management Work flow adjustments, short-pays, denials Rebilling, secondary billing and/or contractual dispute Patient billing (statement and/or EBPP) Post-payment activities: Post to G/L and balance bank statement Work credit balances adjust accounts or issue refunds Pay bills Invest funds Collect bad debt Integration, Analatycis. Decision Support, Business Intelligence and Reporting Proprietary content of The Bank of New York Mellon Corporation The Bank of New York Mellon Corporation. All Rights Reserved. 20

21 Integrated Comprehensive Collections for BNY Mellon Proprietary content of The Bank of New York Mellon Corporation The Bank of New York Mellon Corporation. All Rights Reserved. 21

22 POS Patient Estimation Patient validation Patient eligibility and service coverage Patient service estimation Patient collections Patient reconcilement Proprietary content of The Bank of New York Mellon Corporation The Bank of New York Mellon Corporation. All Rights Reserved. 22

23 835 Direct Connections BNY Mellon Process Extensive Payer network of connections All payer types Dedicated D t d payer development team 835 Remit ACH Bank enrollment Multiple updates per day Hospital Proprietary content of The Bank of New York Mellon Corporation The Bank of New York Mellon Corporation. All Rights Reserved. 23

24 Lockbox Image Data Lift for BNY Mellon Lockbox Image lift Customized ministry processes High accuracy and client satisfaction Long standing partnership Capture preferred data from EOB s Zero dollar Paid Balanced 835, ST-SE SE to check Validate data capture to 837 Ministry web validation and correction (optional) Index images to all data captured Electronify all EOB s for data processing Correspondents data indexing Hospital Proprietary content of The Bank of New York Mellon Corporation The Bank of New York Mellon Corporation. All Rights Reserved. 24

25 BNY Mellon Solution - Patient EBPP Patient EBPP can connect via Web Services technology to HC Provider Website to support the following capabilities: Patients can securely view electronic statements and transaction history on-line 24/7 via web and mobile device Patients can make secure, online payments with credit card & ACH Patients can receive notice of new invoices & notices Hospital Patient Statement File E-Bill to Patient Patient EBPP Electronic Bill Presentment & Payment Hub with Patient Archive Additional payment/connectivity options: HC provider can schedule recurring payments via desired patient payment plans Provider s Website IVR / Call Center 3 rd Party Agency Patients can make payments via telephone interactive voice response (IVR) 24/7 Patients Enable third party collection agencies to leverage full complement of paper & electronic payment options HC Provider s call center can process credit card & ACH payments via same web platform HC Provider receives one consolidated payments file Patient 835 file is processed in the workflow CC, echeck, ACH Consolidated Payment File (Web, Phone, IVR,) Proprietary content of The Bank of New York Mellon Corporation The Bank of New York Mellon Corporation. All Rights Reserved. 25

26 BNY Mellon Solution Patient Pay Lockbox / Statement Print Lockbox Open invoice for exception handling and remittance validation Hospital Auto correct if match is made to check Web exception process if match is not made Print mail Full featured print shop Integrated into workflow Direct patients to EBPP option Proprietary content of The Bank of New York Mellon Corporation The Bank of New York Mellon Corporation. All Rights Reserved. 26

27 BNY Mellon Workflow Services Hospital Proprietary content of The Bank of New York Mellon Corporation The Bank of New York Mellon Corporation. All Rights Reserved. 27

28 BNY Mellon Workflow Service Examples Reassociation Denial Management and Workflow Auto and manual matching ACH and Check Full and partial payment match Reporting Workflow based on your specific business rules Claim correction and rebill Administrative corrections Clinical corrections Patient Pay flow Charge Analysis Validate charges to national standard procedures Identify potential missing charges Identify charges outside of norm for proper documentation Improve department revenues Reporting Contract Management Validate service lines against adjustments t & contract terms Identify underpayments, under billings & over payments Appeal letter package Business Intelligence and Analytical Reporting Trend analysis reporting (macro and micro Dashboard reporting File Normalization Normalize file to interface with application File layout and content System integration Web services, API & automated screen input Contract performance Proprietary content of The Bank of New York Mellon Corporation The Bank of New York Mellon Corporation. All Rights Reserved. 28

29 Integrated Comprehensive Collections Proprietary content of The Bank of New York Mellon Corporation The Bank of New York Mellon Corporation. All Rights Reserved. 29

30 Claim Submission Example Proprietary content of The Bank of New York Mellon Corporation The Bank of New York Mellon Corporation. All Rights Reserved. 30

31 Claim Submission Considerations Business Edits Validate business rules, edits, and payer specific arrangements (i.e. HIPAA type level 7) Validate claim information from eligibility (270/271), referral (278) and authorization transactions (278) Charge Analysis Validate charges to national standard procedures Identify potential missing charges Identify charges outside of norm for proper documentation Contract Analysis Pre adjudication of Claim Revenue forecasting and analysis Proprietary content of The Bank of New York Mellon Corporation The Bank of New York Mellon Corporation. All Rights Reserved. 31

32 NOTICE/DISCLAIMER: The BNY Mellon portion of this presentation and its contents are proprietary information of BNY Mellon and is for informational purposes only. The presentation may not be reproduced or otherwise disseminated in whole or in part without BNY Mellon's prior written consent. BNY Mellon expressly disclaims any responsibility for the accuracy or completeness of the material contained in the BNY Mellon portion of this presentation and excludes all liability whatsoever for any damage which may be suffered by any person as a consequence of any information in the BNY Mellon portion of this presentation or any error or omission therefrom.

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