The Road to Performance Evaluating Metrics and Benchmark Trends in the Revenue Cycle June 2012
1. philosophy 2. resources 3. framework 2 Confidential Services
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Benchmarking 101 Benchmarking Identifies, understands, and adapts outstanding practices and processes to improve organizational performance Will be used increasingly by healthcare institutions to reduce expenses and simultaneously improve product and service quality Is an essential component of total quality management and is a continuous process by which an organization can measure and compare its own processes with those of organizations that are leaders in a particular area Can usually be classified into one of four categories: productivity, quality, time, and cost-related Can seem overwhelming but is vital Should be tackled one step at a time Can add millions to a company s bottom line when departments are benchmarked individually 5 Confidential Services
philosophy 6 Confidential Services
1. Vision 2. Milestones 3. Indicators 4. Available Data 5. Pulling It All Together 7 Confidential Services
define what success looks like 8 Confidential Services
integration into culture 9 Confidential Services
Much can be accomplished by teamwork when no one is concerned about John Wooden who gets credit. 10 Confidential Services
resources 11 Confidential Services
you re not alone 12 Confidential Services
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Source: Transcription Turnaround Time for Common Document Types, 2008 developed by the American Health Information Management Association and Medical Transcription Industry Association (AHIMA/MTIA) Joint Task Force on Standards Development 17 Confidential Services
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HARA Metrics and Projections Hospitals have seen GDRO days range between 55-50 days over the past 10 years and will most likely continue this trend as a result of challenges presented by HIPAA 5010, ICD-10, and healthcare reform Source: HARA 2011 reports 19 Confidential Services
HARA Metrics and Projections A/R aging has ranged between 22-27% and is expected to continue to rise, especially during the transition to HIPAA 5010 Source: HARA 2011 reports 20 Confidential Services
HARA and Projections U.S. hospitals are predicted to continue to see increases in total gross revenue written off as bad debt or charity, which is impacted heavily by a weak economy and unemployment Source: HARA 2011 reports 21 Confidential Services
HARA Metrics and Projections The nation s hospitals have submitted claims to all payer types from approximately 9 days to 13 days and will most likely see this rise as well in early 2012 during the transition to HIPAA 5010 Source: HARA 2011 reports 22 Confidential Services
framework 23 Confidential Services
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Creating a Results-Driven Process In order to benchmark successfully: 1. Select the processes you want to benchmark (e.g., Billing, Collections, etc.) 2. Understand specifically what your department s problems are and clearly define what you intend to study and accomplish 3. Choose relevant measurements and those that have solid industry comparative Revenue Cycle Scorecard benchmark data 4. Establish baselines and targets for the metrics you have selected and develop a benchmark comparison similar to the following: Indicator Target Month 1 Month 2 Month 3 Patient Access Registry Accuracy >98% 90% 92% 93% HIM DNFB days Coding Accuracy Rate PFS Gross Days in A/R % of A/R > 90 days <3 >99% <50 <15 4.5 94% 65 33% 4 95% 62 30% 4.7 93% 60 29% 25 Confidential Services
Creating a Results-Driven Process In order to benchmark successfully: 5. Study performance-boosting best practices, including talking to colleagues outside your organization. Participate in national associations, member blogs, and other appropriate listservs that provide discussion groups. 6. Conduct a literature search and attend educational programs to learn about best practices and adapt the most appropriate that will help achieve the results you need. Do not confine your search to your own industry there may be comparable processes in an entirely different industry from which you can learn. 7. Consider benchmarking with organizations that are roughly the same size as your own and in a similar region as your organization, because their best practices will be more likely to work in your organization. 8. Plan for and implement best practices. Decide which practices can be adapted to your organization. With staff support, move forward and make the necessary proposals and budget requests, develop policies and procedures, conduct required training, and implement new technologies. 26 Confidential Services
Creating a Results-Driven Process In order to benchmark successfully: 9. Determine the potential dollar value to your organization if you were to achieve the benchmark targets similar to the following: ABC Hospital Annualized Cash Before Improvement $240,838,385 Ongoing Cash Opportunity Bad Debt Write-Off Reduction (a) POS Collections, Patient Balances, Charity/Medicaid Denials Management Reduction (b) Small Bal Vendor, Implement Projects & Technology Benefit Forecast (Thousands) Additional Entitled New Revenue (c) Clinical Documentation, Charge Capture Audit, Coding Improvements OPPORTUNITY 100% 75% 50% $1,659 $1,244 $829 $2,132 $1,599 $1,066 $3,198 $2,399 $1,599 Time of Service Collections (d) $2,132 $1,599 $1,066 Total Ongoing Opportunity (P/L Impact) $9,121 $6,841 $4,561 Percentage of Annualized Cash 3.8% 2.8% 1.9% One-Time Cash Flow Impact OPPORTUNITY 100% 75% 50% DNFB Improvement (e) $15,332 $11,499 $7,666 Billed Days in A/R Improvement (f) $7,520 $5,640 $3,760 Total Opportunity Cash Acceleration $22,852 $17,139 $11,426 Percentage of Annualized Cash 13.3% 10.0% 6.6% Total Ongoing Over Years 2 & 3 $18,243 $13,682 $9,121 TOTAL OPPORTUNITY OVER 3 YEARS $50,216 $37,662 $25,108 27 Confidential Services
Creating a Results-Driven Process In order to benchmark successfully: 10. Measure results and do a payback analysis. Assess the progress your organization has made by comparing baseline data with current performance. Document the costs incurred and the benefits that have resulted. Monitor quality to make sure improvements in performance are maintained. Periodically raise the bar or change the process for continuous improvement. 28 Confidential Services
Top 10 Things Not To Do 1. Get stuck in a rut 2. Set your goals too large 3. Bring reams and reams of paper to the meetings 4. Try and do it all yourself 5. Assume that someone else in the organization is doing it 6. Analyze benchmarks in a silo 7. Let technology stifle your goals 8. Push the information out to your team 9. Use benchmark meetings as a way to point out flaws in coworkers and the organization 10. Just kidding there are only 9 29 Confidential Services
Top 10 Things to Do 1. Keep your benchmark meetings short and concise set up subgroups to meet separately to identify issues and develop action plans 2. Setup annual reflection/goal setting days 3. Communicate to all relevant employees why you are tracking benchmarks 4. Include the right people 5. Arm Wrestle your CEO or CFO into letting you attend the national MAP event 6. Question the numbers over and over again 7. Pictorialize your goals 8. Ensure that you have access to the right data from associations on a timely basis 9. Reward success 10. Stay the course and bring chocolate to meetings 30 Confidential Services
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Thank you Jim Garvin Vice President of Solution Development (636) 527-7001 j_garvin@dell.com
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HFMA Map Metrics HFMA periodically publishes best practice targets for revenue cycle areas including: 34 Confidential Services
AHIMA Metrics Some other sample AHIMA productivity benchmarks include: Source: Using Benchmarking for Performance Improvement, (2003 AHIMA Practice Brief 35 Confidential Services
Case Study: Health System in the Southwest Benchmarking in Practice Started system-wide benchmarking in 2004 Wanted to create streamlined and consistent reporting for revenue cycle information Used various methods and systems in each hospital for calculating and reporting revenue cycle information Decided to develop one standard scorecard that each facility would use to report revenue cycle metrics Challenges Action Taken Benefits Deciding what data and benchmarks would depict the health of the revenue cycle across all hospitals Apples-to-apples comparison of data The necessary data had to be readily available Deciding what targets to use based on HFMA, HARA, and other sources Gaining buy-in from staff about the changes being implemented Six major areas were selected to be monitored, including revenue outcomes, registration, and preservice coordination, HIM, case management, contracting and revenue recovery, and patient account services Targets were established for all of the goals in the six areas and monthly reporting started; at year end, a revenue integrity meeting is held, and facilities receive awards and recognition Sense of camaraderie and healthy competition among the facilities The scorecard has evolved from being an excellent executive report to an excellent education tool Net revenue increase of 24% over the past 6 years Increase in cash collections of ~ 13% and a decrease in A/R days from 78 days to 42 days 36 Confidential Services
Case Study: Large Physician Clinic Benchmarking in Practice An HIM director at a large physician clinic had 21 transcriptionists Each averaged about 140 lines per hour using conventional word processing software and cassette tapes The transcription unit supports 80 physicians at a cost of 15 cents per line Challenges Action Taken Benefits Needed to increase productivity while maintaining quality Transcription processes were not state-of-the-art in the organization Little knowledge of benchmarks or appropriate targets HIM director determined that in similar settings, 1 transcriptionist supports 4 physicians, and researched transcription best practices on the AHIMA and American Association for Medical Transcription websites and in AHIMA s Communities of Practice Talked to peers on local HIM association board and posted a discussion thread on the Ambulatory Care Community of Practice; attended a national convention, visited vendors, attended lectures on best practices and transcription technology, and identified goals for lines/hour and cost per line Identified 10 transcription departments of similar size and scope and interviewed the HIM director or transcription manager at each; decided to pursue new software, templates, and a digital dictation system; planned for an incentive program and explored allowing transcriptionists to work from home Productivity continues to increase with an expected average of 275 lines per transcriptionist Cost per line is expected to decrease to approximately 12 cents per line 37 Confidential Services