Presenters. Agenda. Process Management in the Revenue Cycle. Mayo Clinic. Mayo Clinic

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1 Headline Space Here Mapping the Revenue Cycle: A Creative Approach Insert and Headline Real Here World Results from the (B13) Rick Rein, MHA Presenters Finance Analyst, Tricia Lanzel, CPA Finance Analyst, Scott Helmers Partner, Harvard Computing Group 2 Agenda Process Management in the Revenue Cycle Issues and Solutions for Process Mapping ing internal controls with Process Maps Future Plans for Process Mapping at Mayo Clinic Process Management in the Revenue Cycle Rick Rein 3 is the first and largest integrated, not-for-profit group practice in the world. Three shields of practice, education and research Patient Care Revenue of $5.2 billion in 2006 Unique Patients Physicians & Scientists Residents, Fellows & Students Rochester Arizona 322, ,389 1, , Florida 88, Allied Health 24,788 3,862 4, Harvard Computing Group ( 1

2 Process Management - Goals Understand the Revenue Cycle how work happens and where bulk of work is expended Business Process Opportunities Reduce administrative expenses Standardize processes Best practices Need areas to own the process How many people have a process management team or defined procedures in place for documenting processes? 7 8 Must be a Better Way Google Weren t building a bridge Didn t want to add FTE just to support product Simple Standard Is Visio your software of choice for process documentation? 9 10 Revenue Cycle Approach Identified workgroup Develop process mapping standards and template Verb, Noun Noun, Verb Color coding & font Develop timeline, target functions Begin face-to-face interviews with SMEs Revenue Cycle Approach Create draft map Top level Nitty gritty in the guidelines Repeat interviews and edit draft map Commitment made to mapping meetings Weekly review meetings to make sure all maps met standards Harvard Computing Group ( 2

3 Revenue Cycle Approach Posted maps in user areas Posted on web Easy to share - Visio Virtually no training Revenue Cycle Results Easy to identify process similarities and differences Questioned differences = greater understanding of needs/differences Best practice discussions emerged Revenue Cycle Results Identified what wasn t consistent and should it be Coding was biggest constraint Moved resources up front Process Mapping one of top 15 priorities for 2008 Issues and Solutions for Process Mapping Scott Helmers Harvard Computing Group 15 Issues and Solutions for Process Mapping Why is it hard to document processes? Six steps to process Creating easy-to-read process maps Why Is It Hard to Processes? Too many symbols Complex techniques Requires specialists Expensive products Harvard Computing Group ( 3

4 Creating Process Maps The Business Ecosystem You Need Symbols to represent tasks, decisions, resources, roles and other process elements A drawing tool that lets you create, edit and publish your process maps A technique to capture knowledge about the process and create a process map But first you need to understand the process BG Business Goals P Process T Technology Problems Occur When Problems Occur When BG P P T BG T Business Goals Process Technology Business Goals Process Technology Problems Occur When Ideal Alignment T BG P BG P T Business Goals Process Technology Business Goals Process Technology Harvard Computing Group ( 4

5 Continuous process Simplified Process Mapping Continuous process 1 Repeat Discover Repeat Discover ment for ment for change and Analyze Review change and Analyze Review Discovery Goals Understand enough about a particular process to be able to: and describe the process Complete a process by following the documentation Transfer process knowledge to others Change the way work is done the process Create points of input for future systems and change Link business requirements, processes and technology in a common framework Keys to Success Obtain management support Define objectives Identify project team members Identify subject matter experts Define capture methods Capture Methods Questionnaires/Surveys/Interviews Telephone Face-to-face Paper Web-based chat Observation Workshops 20 Questions Continuous process ment for change and Repeat Discover Analyze Review Harvard Computing Group ( 5

6 ation Goals the following: Tasks that make up the process Roles (not individual people) Guidelines, business rules, instructions, policies Resources, materials, data sources, applications and other tools Timing, time constraints Other supporting information relevant to the process 2 31 Software Requirements Process mapping software must allow you to Utilize your processing mapping technique to create a readable process map Add relevant data attributes 2 Create hyperlinks to supporting documents and systems Easily edit the process map Publish maps for various audiences 32 2 Usability Guidelines Audience: know your audience and target their requirements Information content: ensure the map is accurate and in the context of the process Layout: make the map simple and easy to follow Density: provide necessary information but don t clutter the map Comprehension: ensure that the content is clear and accessible Flow: minimize direction changes Leverage: link to relevant data, documents and systems Continuous process ment for change and Repeat Discover Analyze Review Review Goals During the Review Process of a Process Capture project the goals are to: Ensure the completeness of the maps Confirm the accuracy of the data Gain consensus for the as is or to be process Verify the processes captured and decisions made are in line with the goals and objectives for the project 3 35 Review Techniques Publish & Distribute Describe desired feedback Set due date for comments Indicate format for feedback Review Workshop Review, validate and agree on changes Identify areas for 3 36 Harvard Computing Group ( 6

7 Continuous process ment for change and Repeat Discover Analyze Review 4 Analysis Goals Identify inconsistencies or inaccuracies Ensure completeness Highlight redundancies Identify bottlenecks Examine process times Evaluate resource allocation Identify opportunities for process Continuous process ment for change and Repeat Discover Analyze Review 5 Process ment Goals quality Drive change or preserve effective processes Decrease processing time Eliminate bottlenecks Reduce number of tasks how tasks are done Make roles and responsibilities more clear Continuous process Repeat Discover 6 Repeat Goals Process capture is not a one-time event because processes change and evolve 6 ment for Repeat as necessary change and Analyze Review Harvard Computing Group ( 7

8 Simplified Process Mapping with Visio add-in Creating Process Maps Drawing tool built on Microsoft Visio Deliberately small symbol set Simple mapping technique integrated with software 44 Example ing Internal Controls with Process Maps Tricia Lanzel 45 Internal Control Evaluation (ICE) Mayo elected to follow Sarbanes Oxley 2002 Audit needed flow charts of control processes Originally each area allowed to create own flow No standards were followed! How do you document internal controls? 47 Harvard Computing Group ( 8

9 Record Payments and Make Adjustments JE = Journal Entry Enterprise = MCR = MCA = MCJ = EAU = A/R = Accounts Receivable FS = Services JE = Journal Entry PFS = Patient Services Enterprise = MCR = MCA = MCJ = EAU = Apply Fees Payments Received Via Mail Payments Received Via Lockbox Employee Healthcare (MCR/MCA) Allowance for Doubtful Accounts/ Charity Care Contractuals/ Medicare Receive Notification of Amount of Daily Deposits Security PA0701 Deliver Daily Payments to Cash Posting Area PA0706 Unbilled and Unfinalized Review Summary Claims Data PA0401 Review Accounts Receivable Rate Calculation Quarterly PA0404 / Monthly Calculation of Revenue Reduction Activity to Determine Appropriate Percentage by Payer PA0408 Deliver Deposits by End of the Day Clerk Sort, Batch, and Copy Checks Courier PA0707 Rate Percentages Developed PA0702 Rate Percentages Developed Reserve Unbilled and Unfinalized A/R at Overall Blended Discount Rate PA0401 Prepare and Reconcile Deposit PA0708 / Apply Approved Percent to A/R Balance Monthly / Apply Approved Percent to A/R Balance Monthly Sort and Validate Deposits PA0402 PA0405 PA0703 Armored Car Send Deposit by Armored Car Prepare Journal Entry PA0709 Prepare and Distribute A/R Analysis for Review PA0403 Controller Review Estimates at Monthly Meeting with PFS and FS Leadership PA0406 PA0402 Team Lead Send Deposit Information to System Balancing PA0704 Prepare Journal Entry Reporting and Close Apply Fees PA0407 System Balancing Post Payments Manually PA0705 Reporting and Close JE: Record Payments dr Cash cr Accounts Receivable Record Payments and Make Adjustments Systems Balancing JE: Record Employee Healthcare Accrual dr Mayo Plan Complimented Care cr Employee Contra-accounts receivable Billed JE: Record Allowance for Doubtful Accounts/Charity Care Accrual dr Provisions for bad debt expense/ Charity Care cr Allowance for Doubtful accounts/ Allowance for Charity Care JE: Record Contractual/Medicare Reporting and Accrual Close dr Major Contract Rev Reductions/ Medicare Reduction cr Major Contract Allowances/ Medicare Reserve Apply Fees Problems ing Process, not how work happens Difficult to Read left, right, up, down Hard to pin point where handoffs were Managers frustrated during sign-off, never knew where to look 49 Status: Draft After using Process Map Last Revision Date: 08/27/2007 Revenue Patient Care, Billing and Collections PA07 Record Payments and Make Adjustments - Insurance and Patient Payments (MCA) PURPOSE: This process describes the steps involved in recording payments and making adjustments for payments received via the mail and lockbox. APPLICATIONS: HealthQuest PA07 A-A PA07 PA07 PA07 Key: Revenue Patient Care, Billing and Collections Status: Draft PA04 Apply Fees - Accruals for Discounts and Allowances (MCA) PURPOSE: This process describes the steps involved to prepare the critical reserves including: charity care accrual, revenue reductions accrual, employee healthcare (MCA/MCR), and allowance for doubtful accounts. APPLICATIONS: Business Objects, HealthQuest, Lawson, Mayo Revenue Information System, Replicated Database PA04 Key: A-A A-A PA04 Last Revision Date: 09/19/2007 ICE Benefits Clean, easy to read Easily view opportunities for standardization Very easy to see hand offs/controls Controls affixed directly to flow Policy/procedures linked directly to flows PA Harvard Computing Group ( 9

10 ICE Benefits ICE Team creates maps Change in real time with customers High-level revenue flow helpful for clinical staff Meeting Facilitation ICE Benefits Start point End point Not off on tangents No independent mapping Outside customers do not need to spend time on mapping ICE Time Savings Fall hours per month Fall hours per month Expenses cut in half! Future Plans Information Technology Pharmacy Research Accounting Summary Ensure that the audience for your maps can read and use them Good process maps Make the process more visible process performance Simple, standard-format maps are most effective A central process mapping team can save time and money 59 Contact Information Rick Rein,, Rein.Richard@mayo.edu Tricia Lanzel,, Lanzel.Tricia@mayo.edu Scott Helmers, Harvard Computing Group x103 shelmers@harvardcomputing.com 60 Harvard Computing Group ( 10