Revenue Cycle. An operational overview and some ideas of how to negotiate the complex roads ahead. HFMA ROAD SHOW SUTTER CENTER FOR HEALTH PROFESSIONS

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1 HFMA ROAD SHOW SUTTER CENTER FOR HEALTH PROFESSIONS Presented by: Steve Thompson and the PFS Revenue Cycle Committee January 7, 2008 Revenue Cycle An operational overview and some ideas of how to negotiate the complex roads ahead. 1

2 Current Landscape of the Revenue Cycle Compliance Medicare Intermediary 6 Charge Capture & Entr y 7 Medical Management Customer Service Information Systems Provider Community 8 Medical Re cords & Coding Medicaid Fiscal Agent 9 Claims Submission Cost Containment PRO Insurance Companies 5 Registration POS Cash Collections 4 Financial Patient 10 Third Party Follow -up 11 Payment Posting Case Management 3 Consolidation/ Standardization Insurance Verification 2 Pre Reg & Pre Cert 1 Scheduling Revenue 14 Contract Negotiation / Admin 12 Rejection Processing 13 Denial & Appeal Management Diversification Employers HMOs/PPOs Cash Flow What is the Revenue Cycle The Revenue Cycle is one of the areas that has experienced the most change in recent years. Every hospital has experienced (or will experience) problems in areas such as pre-registration, insurance verification, registration/admitting, co-pay collections, charge entry, charge capture, coding, billing, denials, and collections. As the cost and demand of health care continues to rise, more pressure is placed on enhancing revenue as a solution to improving financial performance. Now more than ever, financial managers and administrators must rapidly identify revenue improvement opportunities that increase revenue, maximize reimbursement, and decrease write-offs to realize long-term profitability and improved results. 2

3 Revenue Cycle Think of the Revenue Cycle as an ongoing process where everyone works as a team to achieve stated goals. As long as we pull together we will be able to weather the storms ahead. Why is the Revenue Cycle Important? Collection of proper demographic and financial information. Assure all services rendered are charged for in a timely and accurate manner. Accurate diagnostic data collection and timely coding of accounts. Timely billing and ultimate collection of all monies due for the services rendered. Assure the financial integrity of the hospital to provide for current and future healthcare needs, staffing and technology. Appropriate financial reporting and trending of overall operations. Provides for the ability to fund current and future growth. IT HELPS TO KEEP THE LIGHTS ON 3

4 Goals and functions Your first goal in understanding the Revenue Cycle is to Understand and accept your direct level of responsibility. Then then find out who is responsible for the other areas and meet with them. Communication One of the most important tasks to perform is to establish clear and well communicated Revenue Cycle Goals throughout the organization. Never presume your goals are known or understood. Start by viewing each department within the hospital as a partner in the Revenue Cycle. As a partner, you want them to have a complete understanding of the importance of their role and where you can provide the assistance. They are not able to assist you if they do not understand the overall process. Have you explained the purpose of AR Days, collection ratios, late charges, charge audit losses due to poor documentation, etc. 4

5 Patient Access Increasing diversity of contracts and insurance plans High expectations from patients, families, care providers Impact on Patient Satisfaction Impact on Accounts Receivable and Reimbursement High accuracy required for all processes First point of contact How do you view this position within the organization Emerging / Changing Regulations Patient Access affects everyone 5

6 Patient Access Goals What is your overall percentage of pre admitted patients. What is your process for Direct and Emergency admits to assure you obtain correct information and determine overall coverage. Are you tracking your in-house patients to assure you have proper determination of eligibility. Do not let the Medicare Life Time reserve patient get by you. Are all your Medi Cal, COBRA and other patients coverage's current. Are all days authorized and concurrent review current for all of your in-house patients. Are you meeting on a regular basis with your case managers. Are you closely following your self pay and pending accounts? Key Performance Indicators Patient Access Registration error tracking Goal should be no greater than 3%, but should go for 0%. ( you know you have the best group of registration staff any where) Review sampling of registrations and use errors or omissions as an opportunity to train staff and answer questions. Develop training tool to allow the registration staff to understand their vital role in the Revenue Cycle. When training, think of the Nordstrom or Disney approach. The registration staff should be viewed as the frontline Concierge. It is important that they know the hospital departments and services and answer all questions with a helpful manner. 6

7 Clinical Support/Charge Capture Proper charge capture is the initial step in the journey of revenue collection. What type of system is used to capture all of your charges, Manual, automatic, Hybrid. What reports or methods are used to assure you capture all of your charges daily. How are the Department Managers notified of errors. Have the departments evaluated charge tickets, charge screens or other source documents at least yearly. Have the departments compared their charge tickets to the CDM. Late Charges what is your definition of a late charge and are the departments aware of your standards. Key Performance Indicators- Clinical Support/Charge capture Charge Capture Most effective approach track late charges What is your definition of a late charge From date of discharge or from date of service If process for charge capture is correct, charges should be in the system within the stated time frame regardless of patient discharge disposition. Current process is to track charges from date of service and report on accounts that are beyond the stated bill hold of 5 days. 7

8 Health Information Management The ultimate role of the HIM department is to assure appropriate statistical tracking of diagnostic and other information. What is the total dollars and number of accounts pending on your unbilled report. Do you track ageing of these accounts and assure that you do not have accounts nearing a billing limitation. How do you communicate issues and concerns to the HIM department. Do you have a process to track Medical Record requests and set a specified turn around time. Key Performance Indicators Health Information Management Health Information Management A major key in the overall Revenue Cycle Process Tracking unbilled accounts due to diagnosis important, but not the most important process. Timely management of the patient record, compilation of data and physician compliance are vital to a strong revenue cycle. This is affectionately tracked through the Physician incomplete report and ultimate suspension due to incomplete records. If the documentation is incomplete or missing, the impact on the Revenue Cycle is significant. Amount of time to provide requested records to the Business Office. 8

9 Patient Financial Services Patient Financial Services (PFS) is the final repository of the Revenue Cycle and are responsible for assuring the account is handled appropriately. I often view our functions as Forensic Tracking It is not uncommon for the account to be dead on arrival and we are charged with determining the cause. Should we try CPR on this account! Claims Submission PFS Prompt and accurate, claims submission is mandatory for timely resolution of claims. Electronic claims scrubbing and submission provides for rapid turnaround of claims. Goal is to achieve a clean submission rate of 96% or greater. Look for the areas that are preventing this from happening and resolve. Future trends demonstrate the need for proper claims submission and tracking of data. 9

10 Follow Up processes - PFS Follow up tools are no longer a Nice thing to have. They are a Must thing to have. Automated tracking and reminder processes required to keep up with the current and ongoing complexity of account handling. Growth in OP business creates a much larger volume of accounts for less dollars. These accounts cannot be handled in the same manner or time frames as Inpatient claims. Contract compliance and tracking required to assure the hospital is collecting every dollar they are entitled. Productivity Monitoring - PFS Productivity monitoring Daily production compared to goal. Each hospital must determine these goals based on their systems. Avoid the trap of creating reports that look good, but end up taking staff all day to complete. Simplicity is the key if you must track information manually. Computer tracking based upon work queues, action codes and account notes. Cash collections by collector Ageing analysis by collector (Greater than 90 days). Be open to setting friendly competition. 10

11 Bonus Opportunities PFS Bonuses or other rewards It is never a one size fits all, but at the same time you do not want to create a division within the office Look at working units as a team Develop partial bonuses and rewards based on unit goals. Also, make sure that part of the bonus is tied to the overall performance of the department, customer service and overall patient satisfaction. Bonus Model PFS Bonuses or other rewards $ Example: $ Potential Bonus $1,000 (might as well get their interest) $ Team Goals 60% $ Customer satisfaction 15% $ AR GT 90 Days (LT 20%) 10% $ Total Cash Collections 10% $ AR Days 5% 11

12 Revenue Cycle Operational Overview Summary Never hesitate to communicate your goals, needs and spread the praise. Always look for the next level of improvement. (Or according to Agent Fox Mulder (The X Files) The truth is out there ) Always look to partner with other areas to assist in accomplishing the tasks at hand. Make sure that you never forget to let your team know how important they are to you and to the organization. Record Retention An Overview Record Retention is an area that is often misunderstood and generally always filled with more questions than answers. In the new era of electronic medical records, the entire process of record retention is under greater scrutiny. 12

13 Record Retention Whenever a provider develops a Record Retention policy, it is important to pay particular attention to the following: Legal requirements and considerations Frequency of use of a record Space constraints Departmental structure Record Retention LEGAL CONSIDERATIONS Minimum retention requirements are not always the best approach. A number of requirements will state 7 years, but perhaps 10 years are better. Always consider current and future litigations Retention process should consider the maximum amount of time a record should be maintained. Records for minor children require special handling. In most situations, there is a retention requirement to maintain the records for a period of time beyond the age of becoming an adult. 13

14 Records Use Frequency of use How often you use the records dictate the time you want to maintain in hard copy. As noted earlier, space constraints should be considered. Are the records stored on site (Expensive per square foot) or in an offsite location (ease of retrieval). When a record is needed, what resources are expended in retrieval. Always consider internal and external resources. Is the record information vital to overall patient care and satisfaction? Space Needs and Considerations Space Constraints Evaluate overall storage space to assess immediate needs. If space is limited, but retrieval is critical, it may be necessary to consider ancillary storage close to the department. Assess the overall cost to store records on site as opposed to paying for outside storage and retrieval. 14

15 Departmental Needs Departmental Structure Providers need to assess the overall requirements for each department. One size does not fit all and retention guidelines can change within a department. Some providers may consider a central repository and manage the retention/destruction centrally. There is no perfect approach to this process. General Guidelines General Retention Guidelines Minimum 6 years for general records that may prove valuable for litigation, statistical or business purposes. The 6 year period generally exceeds the normal time frame for civil actions. Other record retention should be considered based on previously stated needs and regulatory compliance. 15

16 Health Information Management Health Information Management Adult and Emancipated Minor legal is 7 years following discharge recommend 10 years following discharge or final treatment. Unemancipated Minor legal is at least 1 year after the patient has attained the age of 18 and no less than 7 years following discharge same as legal for the 1 year, but 10 years from date of discharge or final treatment. Pregnant Legal does not specify any difference from above recommend 19 years following discharge or final treatment. Special Considerations Special Considerations Consideration regarding potential civil action that alleges inadequate patient care. Information from a large malpractice insurer indicates that 99% of all claims are filed within 10 years of the occurrence giving rise to the claim. This is the reason for the recommended 10 year retention. 16

17 Computerized Records Computerized Records The law does allow for the retention of an electronic record, if the electronic record accurately reflects the information set forth when the record was generated in its final form, (Civil Code ) Care must be exercised to not want to over store information since it does not require the overall physical storage of paper. Each facility is advised to approach this in a well thought out manner Electronic Medical Records Electronic Medical Record Requirements Employ an off-site electronic backup storage Use an imaging mechanism that can copy signature documents Have a mechanism to ensure that medical information, once put in electronic form, is unalterable Create safeguards that maintain the confidentiality of the records and that prevent access by authorized persons Establish mechanisms that allow authentication of entries by electronic signature keys, and Provide procedures for system maintenance. 17

18 Electronic Medical Records Contd. HIM Imaging requirements Contd. A system for identifying the person making the signature; Safeguards for ensuring the confidentiality of identifiers; A mechanism for determining the identity of the signer and for storing information; A means for recording the date and time of the attestation; A back up procedure for prolonged periods of computer down time ; and A process by which the signer can verify the correct recording of the attestation. Record Retention Business Records Business Records Audit Reports Bank Deposits Bank Statements Cash Receipts Charge Slips to patient Claims and charges to Patients, fiscal intermediaries, Third party payers 7 years 6 years 6 years 6 years 6 years 6 years 18

19 Record Retention Business Records. Contd. Business Records C.C.R (Medi Cal keeping and availability of records Each provider shall keep, maintain, and have readily available, such records as are necessary to fully disclose the type and extent of services provided to a Medi-Cal beneficiary. Required records shall be made at or near the time at which the service is rendered. Such records shall include, but not be limited to: Billings TAR All medical records, service reports and orders prescribing treatment plan Record Retention Business Records, Contd. Business Records C.C.R (Medi Cal keeping and availability of records Records of medications, drugs, assistive devices, or appliances prescribed or ordered for, or furnished to beneficiaries Copies of original purchase invoices for medication, appliances, assistive devices, written requests for laboratory testing and all reports of test results and drugs ordered for or supplied to beneficiaries. Copies of RA s which accompany reimbursement to providers for services or supplies provided to beneficiaries Identification of the person rendering services. Records of each service rendered by non physician medical practitioners shall include the signature of the non physician medical practitioner and the counter signature of the supervising physician. 19

20 Change is good as long as I don t have to do anything Is this the End? Can I retire now? 20

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