Robin Bradbury 800.355.0410 robin@ereso

1. Robin Bradbury 800.355.0410 robin@ereso.com

2. “Top Ten Questions” September 21, 2010 Keystone and Philadelphia Regional AAHAM Chapter Meeting

3. Revenue Cycle 101 When performance is measured, performance improves.

4. Revenue Cycle 102 Objective measures are always better than subjective measures.

5. Registration Patient Data Payer Contracts Charges The Process..… Billing Claim Payment Cash Adjustments Self-Pay Collection Other Payers Cash Bad Debt

6. Time and Energy

8. Question # 1 What are the “key” measures for the Revenue Cycle?

9. Key Measures • Days in Revenue Outstanding • Cash Collections • Cash as a % of Net Revenue • Write-offs as a % of Revenue • Aged AR Greater than 90 Days • Days in Discharge to Final Bill • Up-front Cash Collections

10. Benchmark Data • HARA report • Geographic region • Your facility

11. Free Benchmark Studyhttp://www.ereso.com

13. ValueProposition Actual Example

14. Question #2 How do you document and share this information with the Revenue Cycle staff?

15. Key Measures • Monthly Dashboard • Posted key measures in Revenue Cycle areas • Monthly team meetings • Teach the staff what “Days” are

16. Question #3 What is our cost to collect a dollar?

17. Benchmarks • Good comparative measure (common definition) • Important consideration when evaluating investment in resources – more cash intake may be worth it • Outsourcing consideration • National average for hospitals is $.03 per dollar collected • Smaller Critical Access hospitals closer to $.05 per dollar collected

18. Question #4 Do we have expectations and performance standards for our Revenue Cycle staff and …..

19. Question #4 (continued) …do we monitor performance and provide incentives for excellence?

22. Expectations and Performance Standards • Front end, middle and back office resources • Raise performance level awareness • Align goals • Creates healthy competition • Cream will rise to the top

23. Expectations

24. Key Revenue Cycle Metrics HFM toolbox HARA Zimmerman

25. Incentive Plans • 96% of other industries have incentive plans for employees • Healthcare – less than 50% • Be creative with incentives

26. Question #5 How are we managing the patient-responsible dollar?

27. Uncompensated Care by Type of Provider Source: Hadlye and Holahan analysis of 1998 -2000 data, 2004

28. Emergency Room • 1/3 of ER patients have no insurance • 29% national average collect in ER • Discharge collection process • Need centralized exit point • Keep license • Train staff to bring back to discharge

29. When Respondents Who Had Received Recent Medical Care learned the Cost of their Treatment 63% don’t know the treatment costs until the medical bill arrives; 10% never know the cost. When did you learn what the total cost of the treatment would be, including the amount that the insurance company would pay? Source: Great-West Healthcare 2005 Consumer attitude toward healthcare survey

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31. Page 31 Self Pay Strategy

32. Estimate, Validate, and Advocate • Estimate Charges, insurance coverage and patient portion • Validate the information • Advocate for the patient to deal with the obligation • Cash, Check or Credit Card • Payment plan • Medicaid Eligibility • Charity Care • Reschedule? • Software is available to do this

33. The largest group of newly uninsured – some 811,000 people in 2001 - had annual incomes in excess of $75,000. • In contrast, the number of uninsured with annual incomes of less than $25,000 fell 25% from 1995-2001. • Forty percent of the uninsured population is from ages 18-34 – a group that is typically in good health and presumably considers their money better spent elsewhere. • Many large insurance companies recognize these statistics and as a result are starting to offer customized programs for these groups – especially the young and healthy. Work status of uninsured head of household Nearly 85% of the uninsured are in working families. Source: Employee Benefit Research Institute estimates from 2001 Census Data “Uninsured does not mean indigent and definitely not uncollectible.”

34. GDRO by Payer Averages • Self pay 175 • Medicare 34 • Commercial 65 • Medicaid 70

35. Capture all of the charges for the services that your providers perform. Insure that you are billing all parties that are responsible for payment Collect all cash up front for all scheduled surgeries and all co pays from non scheduled services Segregate self pay into charity, other payers and accounts with a propensity to pay. Sell or send the rest to collection.

36. Question #6 Has a Chargemaster and APC review and assessment been performed recently?

37. Outpatient Treatment Inpatient Treatment EKG EKG Lab Lab XRAY XRAY DRG Coding APC Coding Lab EKG XRAY APC APC DRG Payment APC

38. APC/CDM Assessment • Outpatient revenues are significant in rural/community hospitals • CMS indicates a 47% underpayment • APC Index of 3.0 • Better performers have these common aspects: • Dedicated ownership of process (75%) • Supported by technology (47%) • Independent reviews (46%)

39. Effective APC Program • Quarterly review of APC payments compared to charts • Change processes to capture all charges • Retroactively re-bill when appropriate • Improve APC reimbursement

40. Question #7 What are our days in Discharge to Final Bill?

41. Days from Discharge to Final Bill • Indicator of effective front end, charge capture and coding process • Clients have wide range from 3–25 days • Break into parts • Sample accounts • Determine where the bottlenecks are • Doctors sign-off • Coding • Daily billing

42. Potential Solutions • Outsource Coding Department • Use Super Coders on an as needed basis – train staff • Set goals and expectations • Monitor top ten

43. Question #8 Are we getting paid what we should be paid for services performed?

44. Same Services More Dollars

45. Reimbursement % by Payer • EOB review – sampling • Use of software to monitor payment • Outside review on contingency fee • Payer report cards and payer meetings • Most hospitals are leaving 2% to 5% on the table of non-government reimbursement if not using a contract management service

46. Question #9 Do we have an unpaid claims tracking mechanism?

47. Unpaid Claims Tracking • Monitoring • Trends • Improve the front end processes • Unpaid claims versus denial tracking • Should take a systemic view - unbilled and denials

48. Unpaid Claims Measurement Tool

49. Question #10 Do revenue cycle stakeholders regularly engage in clearing open items and process improvement meetings?

50. Regular Clearing Meetings • Collaboration between multiple functions, backgrounds, and skill sets • Focus on large dollars • Recurring errors • Open communication and no finger pointing • May require senior management involvement