Mississippi Primary Health Care Association Annual Conference -June 11-14, 2014 Harrah s Tunica Resort Understanding HRSA s Financial Program Requirements Michael Holton President/CEO Holton Healthcare Consulting, Inc. 919-571-3266 mholton@holtonhealthcare.com
The Health Center Site Visit Guide is a review instrument used by the Health Resources and Services Administration (HRSA) to assess an organization s compliance with the Health Center Program requirements as well as a resource to assist grantees in identifying ing areas for performance or operational improvements. Health centers may also use this Guide as a self assessment resource as it provides a series of prompting questions for both program requirements and performance improvement.
Section I Need II Services Program Requirement 1 - Needs Assessment 2 Required & Add l Services 3 Staffing 4 Hours/Locations 5 After Hours Coverage 6 Admitting/Continuum of Care 7 Sliding Fee Discounts 8 QI/Assurance Plan
Section III Management & Finance IV Governance Program Requirement 9 Key Mgmt Staff 10 Contractual/Affiliations 11 Collaborative Relationships 12 Fin Mgmt/Control Policies 13 Billing & Collections 14 Budget 15 Program Data/Reporting 16 Scope of Project 17 Board Authority 18 Board Composition 19 Conflict of Interest
Section Appendices Appendix A Cross-Cutting Reference B Recommended References C Optional Summary Grid D HC Performance Measures E ARRA Grant Progress Review
Prior to Visit Bylaws, most recent grant application, organizational chart, most recent NGA, Staff roster, productivity reports by provider compared to budgeted projections, QI/QA plan, health care plan, last two financial audits,, most current YTD financial statements Onsite Availability Board members roster & patient status, board minutes for prior year, standing & ad hoc committees, board assessment tools, patient satisfaction survey results, ED annual performance form, Fiscal, administrative, personnel and MIS policy/procedure manuals; Employee handbook Chart of accounts, monthly financial reports Schedule of patient charges; sliding fee scale policy, procedures and forms, IRS 941 reports Aged accounts receivable & accounts payable reports Encounter form examples Fixed assets ledger/depreciation schedules Board and key staff member paid invoice files YTD budget analysis of reimbursable services; most recent P&L; payer mix by clinic; Medicare & Medicaid cost reports Copies of contracts, insurance policies, fidelity bonds Informational brochures; strategic plan; Medicaid RAs for three months; missed appointments Board reports, last three audits, incentive programs
Program Requirement 7 - Sliding Fee Discounts How is sliding fee scale program structured? Do patients t pay 0 at 100% of poverty or less? Nominal fee? How are patients charged at 101-199% of FPL? Patients at 200% and above the FPL pay 100% of charges right? Is the sliding fee scale updated annually to comply with latest FPL? Approved by board of directors How about overall health center fee schedule? What is the application process for the sliding fee scale program? How do you document family size? How do you document tincome level? l? How do you verify information? Do patients sign that the information they ve provided is true? How about difference e languages? ges?
Program Requirement 7 - Sliding Fee Discounts How about referral agreements where the health center does not pay? Do the arrangement include service to all patients regardless of their ability to pay? How about referral agreements where the health center pays? Do you receive invoices for services provided to SFS patients and the write off portion? Does your health center have two or three different sliding fee scale programs, say for dental, medical and behavioral health? How do they differ and why? Does the health center routinely evaluate them to assure they don t create barriers to care? Is policy approved by Board of Directors? Is there signage and at front desk and through website communicating the availability of the program and in appropriate languages? Billing and Collections conducted in an efficient, respectful and culturally appropriate manner so that there are few barriers to care
Program Requirement 9 Key Management Staff Maintains fully staffed management team appropriate for size and needs of health center. CEO, CMO, CFO, CIO, Nursing, etc. Directly employed? Senior staff goals, performance evals, backgrounds and competencies, board/management communication. Program Requirement 10 Contractual/Affiliation Agreements Appropriate oversight and authority over all contracted services Any Sub-recipients meet Heath Center Program requirements
Program Requirement 11 Collaborative Relationships Makes effort to establish and maintain collaborative relationships with other health care providers in the service area, including: Other FQHCs, hospitals, health departments, private providers, elected officials, and other community stakeholders, including social services. Letters of support? Written letters or support of agreements are very important. Primary care association support? Medical Director or other physicians involved in community, i.e., local medical society? Business relationships?
Program Requirement 12 Financial Management & Control Internal control systems; GAAP, independent audit & findings Monthly financial reports, budgets, adequate cash, AR, AP, disbursements, chart of accounts, accounting procedures, profitability? Business plans, PMS, recording of transactions, Auditor selection, signatory policies, provider productivity, Fair Labor Standards Act.
How About: Monthly cash budget, with projections for at least 12 months? Monthly statements prepared for finance committee and board? Balance sheet? Income statement showing variances from budget? Encounter activity by payor type? Monthly provider productivity report? Receivables status report? Are expenses properly allocated? To cost centers; multiple funding sources; multiple sites? Disbursements: Written purchasing and cash disbursement policies? Separation of disbursement duties; reviewed and approved by 2 people Review and approval documented? 11
How About: Chart of Accounts: Adequate for good financial statements? Provide income data by payer with write off information and expense levels? Patient Services Revenue Accounting: Contractual allowances? Doubtful accounts? Grants and contracts receivable; wraparound settlements? Settlements and other receivables? Prepaid expenses? Capturing: Accounts payable; accrued payroll; uncompensated bsences: Deferred and unearned revenue; depreciation; bad debt write off? Know break-even point? Adjust to variances a from budget? Take action when not meeting budget expectations? Access to a line of credit to assure adequate operating cash? How does the health center record revenues? Charges; write offs, etc. 12
How About: The annual audit: How is the auditor selected, RFP? How often? What is the role of the Board in auditor selection? Does Board review and approve the annual audit report? Signatory Policies: Who are authorized signers? Who primarily signs checks? Is more than one signature required to clear financial transactions? Is there a $ threshold requiring more than one signature? Can checks be made out to self? Provider Productivity: Tracked and reported regularly? CMO review and discuss with management team? Productivity is adequate for: Benchmarks established by health center Health center s projected revenue National benchmarks Provider contracts reflect productivity expectations? 13
Program Requirement 13 Financial Management & Control Health center has systems in place to maximize collections and reimbursement for its costs in providing health services Participate in Medicare, Medicaid and SCHIP..have numbers? Make every reasonable effort to collect private insurance? Reasonable effort to secure payment from patients based on their ability to pay? Systems include written policies and procedures addressing billing, credit and collections
Billing and Collections Systems: Encounter form: Have one? On and off site forms which include all services? Reflect practice of all providers? ICD and CPT current codes that also meet State billing requirements? What is lag time for posting services? How about missing encounter forms? What is procedure for offsite encounters? Medicaid and Medicare All site sunder scope of project? Each have its own Medicare number? Electronic billing? Rates for Medicare and Medicaid are reasonable? All claims billed at least weekly? Are billing procedures clearly written? Other third party: Procedure for secondary insurance? Collections procedures after 30days of no response on claims? Self Pay Payment at the time of service? P&Ps in-place when they don t? What happens after 30 days of non-payment? How about 90 days? Outside billing companies how does health h center assure that they will collect the $ s Accounts Receivable: Days of net revenue tied up in AR? Are indicators acceptable or are collections lagging? Are rejected claims corrected and resubmitted within a week? If not, how often? 15
Program Requirement 14 Budget Budget reflects amounts necessary to accomplish service delivery plan, including the number of patients to be served. Annual operating/business plan approved by the Board? Variances reviewed by Board? How often? Capital plan?
Budget tsystems: Have a Capital Plan? Approved dby Board? d?wh When? Annual Budget Appear reasonable and appropriate in terms of accomplishing the service delivery plan? In particular, the number of patients to be served? ed? 17
Program Requirement 15 Program Data Reporting Systems Systems in place that accurately collect and organize data UDS, FSR, Health Care Plan, Business Plan Support management decision making Reporting on clinical measures; Business Plan measures PMS General Capacities PM have a CHC/FQHC module? Billing, capitation management, general ledger, registration, scheduling, patient tracking, word processing, email, etc. Support & maintenance agreements Policies and procedures Data collection, organization, storage, security, back-ups, Reporting Mgmt., clinical, billing; UDS; HRSA Performance Measures How is EMR system working? How about future needs for IT
Based on UDS data Total cost per patient Medical Cost per medical encounter Based on Financial Audit Change in net assets as a percent of expense Working capital to monthly expense ratio Long term debt to equity ratio
Measurement: quantity of service provided Data source: UDS Description: Total accrued cost before donations and after allocation of overhead divided by total patients Formula: UDS Report - Table 8A, Line 17, Column C/Table 4, Line 6, Column A (T8AL17CC/T4L6CA)
Total Cost Per Patient 2010-2012 Trend 2010 2011 2012 Change % Total Cost Per Patient $ 630 $ 654 $ 687 57 9.0 National Average Cost increasing Cos c e s g Increase reasonable?
Total Cost Per Patient Includes other costs on table 8a, line 12 Other costs may be associated with patients not counted in UDS such as some WIC patients Nationally other services amounted to 3.30% of total cost before donations in CY 2012 Goal affected by change in patient volume and possibly service mix (i.e., dental vs. medical)
Measurement: medical cost efficiency Data source: UDS Description: Total accrued medical staff and medical other cost after allocation of overhead (excludes lab and x-ray cost) divided by nonnursing medical encounters (excludes nursing and psychiatrist encounters) Formula: (T8AL1CC + T8AL3CC) /(T5L15CB - TT5L11CB)
Lab & X-ray costs excluded Often largely purchased by indigent care population Pharmacy and other functional costs excluded Overhead included Different than Medicare FQHC rate Medicare excludes physician care in hospital Affected by Productivity and production Expenses staffing mix
Measurement: financial performance during the audit period Data source: Audit Description: Change in net assets divided by total expenses Formula: (Ending Net Assets - Beginning Net Assets)/(Total Expense)
Change in Net Assets as a Percent of Expense - Other Considerations Includes non-operating income and expense FQHC settlement accruals Interest and investment income and expense Gains and losses on disposal of assets Includes restricted income Income restricted for future use Includes income for capital ldevelopment Includes everything that affects the value of the corporation during the audit period May include out of scope activity
Program Requirement 16 Scope of Project Health center maintains funded scope of project including any increases based on recent grant awards. Grant awards last 5 years Project Growth Current capacity Planned Expansions Staffing needs, including management staff, Medicare & Medicaid billing numbers Funding sources PMS/EMR systems Time planning is appropriate
Appendix Cross-Cutting Reference documents and Websites Recommended Reference Documents Optional lsummary Grid Required Health Center Performance Measures American Recovery and Reinvestment Act (ARRA) Gran Progress Review HRSA Document Access http://bphc.hrsa.gov/about/sitevisitguide/
Resources & References Attend NACHC Seminars and Other Training Opportunities Financial/Operations Management Strategic/Business Planning Maximizing Revenue & 3 rd Party Reimbursement Practice Operations Management Webinars Suggested Reference Materials in Program Requirements Document 45 CFT Part 74
Questions and Answers www.holtonhealthcare.com @ mholton@holtonhealthcare.com
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www.holtonhealthcare.com Mike Holton 919-571-3266 mholton@holtonhealthcare.com l h l h 32