9/28/2015. HFMA s Patient Friendly Billing Focus. Initiatives: Best Practices. Agenda. Iowa Hospital Association Annual Meeting October 6, 2015

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1 HFMA s Patient Friendly Billing Initiatives: Best Practices Iowa Hospital Association Annual Meeting October 6, 2015 Sandra Wolfskill, FHFMA Director Healthcare Finance Policy HFMA Agenda Meet Jack! HFMA s Patient Friendly Billing Focus Learning from High Performing Revenue Cycles Q & A 2 Jack s Story This is the story of Jack, a man with a sinus infection, and his encounters with the healthcare system... Source: HFMA s Patient Friendly Billing Report 3 1

2 Hope is not an effective strategy for change. Tom Atchison 4 HFMA s Patient Friendly Billing Project The Patient Friendly Billing project promotes clear, concise, and correct patient friendly financial communications. Featured Reports Reconstructing Hospital Pricing Systems An overview of the hospital pricing system, its evolution, and the objectives driving pricing system reform Consumerism in Health Care: Achieve a Consumer Oriented Revenue Cycle Providing patients timely estimates, communicating about financial assistance, and other consumer focused practices Strategies for a High Performance Revenue Cycle Ready to use ideas and critical practices for implementing and achieving revenue cycle excellence Patient Friendly Billing e Bulletin HFMA's Patient Friendly Billing e Bulletin, sponsored by Emdeon, provides practical how to strategies and information for improving patient financial communications, achieving transparent pricing, and creating a more patientfriendly revenue cycle. 5 Highly Effective Habits Research Has Shown that High Performing Revenue Cycles Focus on Six Key Areas Patient Friendly Billing Project Research Report Key Revenue Cycle Competencies People Processes Technology Metrics Communication Culture 2

3 Patient Friendly Billing Strategies People Processes Technology Metrics Communication Culture C Suite Set high expectations for revenue cycle positions Devote organizational resources to improved training and compensation Develop & participate in intraorg. teams around revenue cycle Use patient experience as cornerstone for setting revenue cycle strategy Appreciate community dynamics and those with greatest impact to the organization when prioritizing tech needs Encourage improved monitoring of rev cycle processes through use of traditional and nontraditional metrics Develop & enforce systems of accountability around monitoring and reporting Support organizational alignment around clear, correct and patient friendly messaging Set clear and transparent financial assistance policies & procedures Demonstrate value for the revenue cycle through significant commitment of time and resources Establish systems to reward high revenue cycle performance Revenue Cycle Leadership Apply high standards to hiring Emphasize education Take a career approach to revenue cycle positions Leverage compensation and work arrangements for employee satisfaction Use formal structures to obtain stakeholder input Target revenue cycle improvements around the consumer s experience Adopt established improvement methodologies incl. those not traditionally used in healthcare Selectively use technology for interactions with customers Manage for investment value Dedicate IT staff to the revenue cycle Measure and report frequently Look beyond traditional metrics for success Seek the consumers perspective Drive a positive sched/reg experience Provide estimates of financial obligations Promote financial assistance Support clear & simple billing & collection materials Recognize importance of external communications Support rev cycle at highest level Garner appreciation for rev cycle from nonfin staff Find purpose through the patient Demand high performance Make innovation a priority Source: Strategies for a High Performing Revenue Cycle, HFMA, 2009, p4 7 People Successful Strategies Establishing high standards for hires Devoting significant resources to education Taking a career approach to revenue cycle positions Leveraging compensation & work arrangements for employee satisfaction 8 Processes Successful Strategies Adopting formal process improvement methodologies Targeting improvements around revenue cycle areas affecting the consumer s experience Using formal structures to obtain stakeholder input: Organization Consumer Physician Payer 9 3

4 Technology Successful Strategies Selectively using technology for interactions with customers Managing for investment value Ensure solid processes are in place prior to seeking automation fixes Dedicating IT staff to the revenue cycle 10 Metrics Successful Strategies Define multiple levels of metrics Strategic Operational Individual Actionable data Commitment to action Education Results 11 Communication Successful Strategies Supporting a positive scheduling/ registration experience Providing estimates of financial obligation Publicizing financial assistance Supporting clear and simple billing & collections materials 12 4

5 Communication Successful Strategies Every day, healthcare professionals conduct sensitive financial discussions with patients. But there have been no accepted, consistent best practices to guide them in these discussions until now 13 Culture Successful Strategies Supporting revenue cycle at the highest level Garnering appreciation from non financial staff Finding purpose through the patient Demanding high performance Celebrating success Making innovation a priority 14 Getting Started: Your Journey to High Performance! 15 5

6 Emerging Trends Value Based Payments Population Health Management Capitation Expansion of ACOs and Bundled Payments Reference Pricing 16 Emerging Trends Focus on Consumerism HDHP and Patient Financial Communication Patient Financial Communications Adopter program Education Toolkit Price Transparency Task Force report and Consumer Guide Transparency Pledge Medical Account Resolution 17 Emerging Trends Changing Infrastructure Requirements Enterprise management of service/episode specific revenue, anticipated cost and expected margin Enterprise wide Workflows, Scalable, Open Infrastructure Enterprise revenue and payment cycle management of patient care related AR and disbursements Enterprise management of contracts and subcontracts Enterprise revenue cycle and payment cycle business insights and analytics Source: Don Paulson, Innovation in Revenue Cycle, 2014 MAP Event Presentation 18 6

7 Conceptual View of the Patient Centered Revenue Cycle Physician & patient Identify need for service m EHR Provider takes initiative to complete pre arrival processes clinical and financial Post service completion of activities required to successfully resolve the financial components for patient and provider Time of service activities Patient arrival ; Clinical services and documentation; Revenue capture, Coding & Patient discharge 19 Applying the MAP Strategies: Measure Multiple levels from macro (Map Keys) to detailed to vendors First level Keys: - Net Days in A/R - Cash to Net PSR % - Discharged not final billed Days in A/R - Accounts receivable aging - Gross A/R days and Net AR days - Bad debt write offs as % of GPR - Charity write offs as % of GPR - Denial write offs as % of GPR 20 Applying the MAP Strategies: Measure Level 2: Departmental Performance Example Patient Access POS Collections Customer service scores Registration error rate Pre registration of scheduled procedures and services Conversion of self pay to insurance Central Scheduling Call abandonment rate 21 7

8 Applying the MAP Strategies: Measure Level 2: Department Performance Example HIM - $ delayed in HIM - DNFB days >3 days - Transcription turnaround time - Clinical chart turnaround time 22 Applying the MAP Strategies: Measure Payer Performance Scorecards: - Anonymous comparative data by payer - Denial rates as a % of visits/admissions - Types of denials - Overturn rates - Appeal turn around time - Average days to pay - A/R Aging - # and $ Outstanding appeals over X days old - # and $ Outstanding overturn denials over X days old 23 High Performance Award Winners Data from 2015 High Performing Revenue Cycle Award Winners: Aged A/R 90 Net Days in days and Bad Debt Cost to Cash POS Cash Charity Care A/R greater DNFB FBNS DNSP Write Off % Collect Collection Collection Write Off % Median % %.0255 Median 98.5% 20.5% 3.3% Percentile % %.0090 Percentile % 45.7% 6.5% % % % 36.4% 4.4% % % % 20.5% 3.3% % % % 12.7% 1.7% % % % 5.6% 1.1% Data from 2014 High Performing Revenue Cycle Award Winners: Aged A/R 90 Net Days in days and Bad Debt Cost to Cash POS Cash Charity Care A/R greater DNFB FBNS DNSP Write Off % Collect Collection Collection Write Off % Median % %.0261 Median 100.5% 16.1% 3.5% Percentile % %.0123 Percentile % 31.0% 8.6% % % % 23.4% 6.4% % % % 16.1% 3.5% % % % 9.0% 1.6% % % % 0.7% 1.3% Data from 2013 High Performing Revenue Cycle Award Winners: Aged A/R 90 Net Days in days and Bad Debt Cash POS Cash Charity Care A/R greater DNFB FBNS DNSP Write Off % Collection Collection Write Off % Median % % Median 100.0% 21.3% 3.5% Percentile % % Percentile % 46.9% 6.7% % % % 40.0% 5.4% % % % 21.3% 3.5% % % % 6.1% 1.3% % % % % 0.4% 8

9 MAP Strategy: Apply Sharing performance with payers Comparing denial rates among payers Driving improvement in appeals resolution days Comparing average days to pay Using scorecard data to change managed care contract terms 25 Improving the Patient Experience Eliminating Babel 26 Perceived Lack of Transparency May

10 MAP Strategy: Perform Use data to reduce days in A/R Use data to improve denial resolution rates and times Lower denial rates equates to $X increase in cash collections Reduce bad debts 28 Finding Your Opportunities Identify segments of the revenue cycle where performance is lagging Prepare a Gap Analysis to confirm specific target areas Use the ideal revenue cycle steps from the Gap Analysis and best practices from industry sources to redesign for the future 29 Gap Analysis Sample Best Practice Activity: Pre service Totally integrated electronic scheduling system used for all scheduled services; single database used to allow scheduling to view all system resources and enterprise wide MPI Electronic scheduling option available to physician offices through secure network ABN process integrated into scheduling and completed at earliest opportunity based on written order and coded diagnosis Rules based work distribution and delinquency monitoring tool used to route accounts for processing and to identify processing requirements for scheduling and pre service work Facility Current Activity Gap Narrative Metrics 100% of services which should be scheduled are electronically scheduled 100% of services which should be scheduled are electronically initiated by the physician offices 100% screened prior to provision of service 100% of scheduled and preregistered cases monitored to identify processing requirements for scheduling and pre service work 30 10

11 Getting Started Implement a disciplined approach to process improvements: Identify members of the process improvement team Use MAP Key data or other metrics to educate the team Calculate value of closing the gap between your current performance and best practice or best peer performance Identify best practice work flows to better align people, process and technologies Customize best practice work flows to your organization 31 Getting Started Implement a disciplined approach to process improvements (continued): Calculate resources needed to implement changes Set performance goals; calculate budgetary impact Identify job descriptions, obtain approvals and recruit staff Develop training materials and train staff Obtain approvals for new work flows and changes Test work flows and implement Measure results; continue to modify work flows 32 The Revenue Cycle Model Must Change Historical Model The Near Future Gather basic info before & at the time of service. Most billing processes are post service, amounts due based on data gathered after service, calculated retrospectively. Patients notified of financial obligations after insurance is billed & paid. Pre Service At Service Post service: Retrospective Data Gathering and Processing Pre Service: Prospective Data Gathering and Processing At Service Post Service Gather info before & at time of service. Prospectively calculate expected outof pocket costs. Providers bill at or right after time of service. Many times, patients know in advance what they owe & agree on terms. Insurance bill verifies what the patient already expects

12 Lessons from High Performing Revenue Cycles Pre service/time of service Moving point of service collections to higher level by focusing on potential vs. actual collections Individual employee level monitoring and reporting Focus on finding resources, educating patients about financial responsibilities and payment plan options Time of service - CDI 34 Lessons from High Performing Revenue Cycles Post Service clean claims count! Standard work Extensive pre bill edits Get it right first time Corrections to process rather than continued correction work Electronic transactions (276/277 claim inquiry and response) Use data to convince payers to alter denials pattern and improve post acute care services 35 Lessons from High Performing Revenue Cycles More tips: Continuous attention to all forms of patient financial communications Organization wide emphasis on education and sharing information at all staff meetings to raise understanding of the importance of revenue cycle Employee selection process focusing on skills and teaching technical components of jobs; invest in the success of the newbies Proactively managing your IT vendor(s); technology as tool to support, not drive process 36 12

13 Lessons from High Performing Revenue Cycles More tips: Ask your patients! Make the managed care department your best friend Integrating hospital and physician revenue cycles keys are standardization, policies, training, redefining standard work/processes Make patients part of the solution, not part of the problem example = COB issues Measure and track performance 37 Lessons from High Performing Revenue Cycles More Tips Adopt the ongoing process improvement lifestyle: continuous process improvement; zero defect mentality; annual upgrading of skills Get by with a little help from your friends! Start every day the KPI way! Be technology crazed eliminate anything manual that you can Prioritize service recovery 38 Lessons from High Performing Revenue Cycles More Tips Focus on the team and team goals Champion the value of education and learning from all sources; re educate, re certify all staff annually in CRCR and PFC MAP! 39 13

14 Patients Benefit Focus on clinical care at time of service Understands Outof Pocket Liability Single point of contact for finances Reduces back end problems (denials, etc.) Engaged Knows how account will be resolved 40 High Performing Must Haves Organizational culture that elevates the importance of the revenue cycle Belief in KPIs and willingness to use them Be good at what they need to be good at Accelerate improvements take action and execute 41 Your Challenge Organizations must continue to do more with less Greatest opportunity is the value of your data Don t keep sticking your toe in the water to check the temperature.do something about it.jump in The way to achieving high performance is through performance tracking and implementing successful practices 42 14

15 The Excuses! The Master Excuse List This is too much work The data is too hard to collect No one will look at it anyway Why is this really important? But, we ve always done it this way! The Solution Structured, deliberate approach; accountability Communicate, communicate, communicate DO WE HAVE ENOUGH STRESS??? The picture on the next slide has 2 identical dolphins in it. It was used in a case study on stress levels which may exist prior, during or after a conversation with your CFO. Look at both dolphins jumping out of the water. The dolphins are identical. A closely monitored, scientific study revealed that, in spite of the fact that the dolphins are identical, a person under stress would find differences in the two dolphins. The more differences a person finds between the dolphins, the more stress that person is experiencing. Look at the photograph and if you find more than one or two differences, you are under a lot of stress in your life and need to leave now for a vacation!

16 In Closing Talk is cheap! Action takes effort!! And a TEAM! Key = Measure, Apply, Perform Think of the revenue cycle secret sauce as using tools to identify opportunities leading to a never ending set of improvements Aim for the moon! Net Days in A/R Aged A/R >90 days DNFB FNBS Bad Debt Cash as % of Net PSR POS Cash Charity 90 th Percentile 27.2 days 10.7% 2.8 days 0.0 days 0.5% 104.8% 38.5% 6.4% 46 Questions Contact Information: Sandra J Wolfskill, FHFMA Director, Healthcare Finance Policy, Revenue Cycle MAP HFMA swolfskill@hfma.org HFMA 47 Revenue Cycle Leadership Supervisory Strategies Communication Strategies Technology Strategies Strive for performance monitoring and reporting that is frequent and actionable. Seek opportunities to provide feedback as close to performance occurrence as possible Explore metrics that others are using and how they are using them to discover new ways to learn more about your organization s revenue cycle performance Streamline the number and repetitive nature of patient interactions Ensure clarity in patient communications (i.e., billing statements, financial assistance/charity care applications, etc. Explain what the patient can expect and how to obtain help Use easily understood language in multiple formats (e.g., online, print, etc.) and in multiple languages as needed Ensure consistency between staff scripting and other communications (e.g., web sites, printed materials, etc.) Ensure solid processes are in place prior to seeking fixes through automation In addition to financial factors, weigh impact on patient base when making a business case for technology investments 48 16

17 Revenue Cycle Leadership Human Resource Strategies Hire only the most appropriate staff Create detailed job descriptions Create revenue cycle career paths Develop and provide continuing education, specifically targeting problem areas Drive employee satisfaction through compensation, performance bonuses, and/or flexible work arrangements Promote revenue cycle importance by finding opportunities to demonstrate the impact on patient satisfaction Educate staff about the many ways their actions can influence the patient s experience Demand revenue cycle performance excellence and celebrate when high achievers are able to obtain it Organizational Strategies Apply intra-organizational teams around key challenges Support patient focus groups or advisory councils Prioritize process improvements based on what will have greatest patient impact Use established improvement methodologies 49 17