Developing a Business Plan to Increase Third Party Reimbursement

1. Developing a Business Plan to Increase Third Party Reimbursement June 28, 2003 Presented by: Michael R. Taylor Precision Resources, Inc.

2. Business Plan Purpose • Estimate potential revenue from third party billing and collections • Identify operational changes necessary to increase revenue from third party payers • Document steps and resources needed to implement billing and collections functions

3. Program Profile:First Step to Plan Completion • Developing a program profile is the first step to complete your business plan • The program profile documents pertinent program operating characteristics that the financial model uses to calculate potential third party reimbursement

4. Sample Program Profile:Happy Center for Primary Care • Grantee type: School-Based Health Center • Services offered: • Primary care • EPSDT • Behavioral health services • STD/HIV screening • Family planning • Annual patient volume = 1,000

5. Sample Program Profile:Happy Center for Primary Care • Annual billable visits = 2,500 • Patient income distribution: • <100% FPL = 40% • 100 – 125% FPL = 30% • 126 – 150% FPL = 10% • 151 – 175% FPL = 10% • 176 – 200% FPL = 10% • Patient employment rate = 60%

6. Sample Program Profile:Happy Center for Primary Care • Patient age distribution: • 0 - 4 years old = 5% • 5 – 10 years old = 38% • 11 – 13 years old = 26% • 14 - 18 years old = 26% • >18 years old = 5% • Patient gender distribution: • Male = 40% • Female = 60%

7. Sample Program Profile:Happy Center for Primary Care • Patient distribution by payer: • Medicaid FFS = 30% or 300 patients • Medicaid managed care = 15% or 150 patients • S-CHIP = 20% or 200 patients • Commercial FFS = 10% or 100 patients • Commercial managed care = 10% or 100 patients • Self pay = 15% or 150 patients

8. Sample Program Profile:Happy Center for Primary Care • Visit distribution by payer: • Medicaid FFS = 30% or 750 visits • Medicaid Managed Care = 15% or 375 visits • S-CHIP = 30% or 750 visits • Commercial FFS = 5% or 125 visits • Commercial Managed Care = 5% or 125 visits • Self pay = 15% or 375 visits

9. Sample Program Profile:Happy Center for Primary Care • Staffing levels (FTEs): • Billable providers • Other clinical staff • Payer contact information & program service eligibility • Medicaid • Medicaid Managed Care: Majestic Care • S-CHIP: GLH • Commercial: Green Cross

10. Sample Program Profile:Happy Center for Primary Care Third party payment rates by CPT code:

11. Sample Program Profile:Happy Center for Primary Care • Missed Revenue: • Clinical staff who are not regarded as billable providers by health plans • Additional costs: • Itemization of costs to implement billing and collections functions

12. Now It’s Your Turn • Develop a program profile for your program • Accuracy is not important - guess if you need to • The point is to familiarize you with the process and the tool so that you can use it later • A blank profile template is included in your binders • Take 20 minutes to complete the template

13. Populate Financial Model:Second Step to Plan Completion Use the information in your completed program profile to populate the designated fields in the financial model

14. Review Populated Model:Third Step to Plan Completion Populated financial model for Happy Center for Primary Care

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