Critical Revenue Cycle Success Strategies In An Era Of Integrations - - PowerPoint PPT Presentation

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Critical Revenue Cycle Success Strategies In An Era Of Integrations - - PowerPoint PPT Presentation

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Critical Revenue Cycle Success Strategies In An Era Of Integrations Thursday, February 16, 2012 presented by: Susan E. Ziel, Partner Catherine M. Weaver Phil Roberts Krieg DeVault Somerset, CPAs Senex Services Corp. P: 317.238.6244 P:

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Critical Revenue Cycle Success Strategies In An Era Of Integrations

Thursday, February 16, 2012 presented by:

Susan E. Ziel, Partner Krieg DeVault Catherine M. Weaver Somerset, CPAs Phil Roberts Senex Services Corp. P: 317.238.6244 Email: sziel@kdlegal.com P: 317.472.2230 Email: cweaver@somersetcpas.com PH: 317.613.1002 Email: robertspt@senexco.com

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Revenue Cycle and Payer C t t

CATHERINE M. WEAVER

Contracts

CMPE, CASC, CHFA SOMERSET CPAS, P.C.

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SLIDE 3

Today’s Discussion ‐ Overview Today s Discussion Overview

Revenue Cycle Collections Legal Considerations of Collections Bad Debt – Now What?

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SLIDE 4

Revenue Cycle Revenue Cycle

S h d li

  • Scheduling
  • Registration
  • Time of Service Payments

Appointment Scheduled

  • Time of Service Payments
  • Charge Capture
  • Coding

Patient Registration Patient Billed and

Cod g

  • Charge Entry
  • Claims Processing

Charge Capture Patient Pays

  • Payment Posting
  • A/R Follow Up

P ti t C ll ti

Charge Entry and Claim Fil d Insurance Payment P ti

  • Patient Collection

Filed Posting

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SLIDE 5

Monitor Revenue Cycle Monitor Revenue Cycle

  • Internal Standards

Internal Standards

 Income statements  Balance sheets

Balance sheets

 Productivity and accounts receivable information  Prior operating performance and measures (front

Prior operating performance and measures (front

  • ffice task work ranges)
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SLIDE 6

Monitor Revenue Cycle Monitor Revenue Cycle

  • External Standards

External Standards

 American Medical Association  Medical Economics

Medical Economics

 Medical Group Management Association  Specialty Specific Resources

Specialty Specific Resources

 Market Specific Resources  Peer Generated Resources

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SLIDE 7

Payor Contracts – Basics Payor Contracts Basics

  • Contracts

Contracts

  • Edit Reports
  • Denials by type
  • Denials by type
  • Denials by amount
  • Charges, Receipts, Adjustments
  • Days in A/R by Payor
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SLIDE 8

Payor Contracts ‐ Essentials Payor Contracts Essentials

C f C

  • Copy of Contract
  • Copy of all Exhibits and Addendums
  • Access to Provider Manual
  • List of the Payors Associated with the

Network

  • Payment Files and Crosswalks

y

  • Your Own Fee Analysis
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SLIDE 9

Contracts ‐ Watch Out For Contracts Watch Out For

“The Provider shall not increase its Charges for any C d S i th th t (3%) h Covered Service more than three percent (3%) each contract year. “ Usual and Customary – Whose Usual and Customary? Change to "Provider’s Usual and Change to Provider s Usual and Customary Charges” Term and Termination - Long period, only at anniversary,

  • nly with cause

Try for: With or without cause in 60-90 days

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SLIDE 10

Contracts ‐ Watch Out For Contracts Watch Out For

  • P

ti b i h d b H it l

  • Practices being purchased by a Hospital

System ‐ New Tax ID means new contract and reimbursement. and reimbursement.

  • Carefully analyze the current contract

Carefully analyze the current contract reimbursement to the new entity contract reimbursement –We have seen examples

  • f the Independent Practices having

negotiated a better paying contract than the Health System’s contract the Health System s contract.

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SLIDE 11

Consume Driven Health Care Consume Driven Health Care

I R C l d R i

  • Impacts Revenue Cycle and Requires

Change

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HDHPs & HSAs ‐ What are they? HDHPs & HSAs What are they?

  • A Health Savings Account (HSA) is a Special

Account Owned by an Individual Used to Pay for Current & Future Medical Expenses Current & Future Medical Expenses

  • HSAs are Typically Used in Conjunction with a

“Hi h D d tibl H lth Pl ” (HDHP) “High Deductible Health Plan” (HDHP)

  • It is Insurance that Does Not Cover First Dollar

Medical Expenses (Except for Preventive Care)

  • Can be an HMO PPO or Indemnity Plan as Long
  • Can be an HMO, PPO or Indemnity Plan, as Long

as it Meets the Requirements

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SLIDE 13

HDHPs/HSAs‐How do patients manage? / p g

W t C Worst Case:

  • Patients Chose for the Low Premium Option
  • They Do Not Fully Fund Their HSA
  • They Avoid Health Care to Avoid Extra Cost
  • They Do Not Actively Participate in Healthcare

Choices & Healthy Lifestyle Choices

  • They Do Not Understand Their Plan
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SLIDE 14

HDHPs & HSAs‐How You Manage HDHPs & HSAs How You Manage

R i Wh P ti t h HDHP Recognize When a Patient has a HDHP d f h

Identify HDHP Names with Your Payors

Look for Zero co‐pay on Cards

Look for High Deductibles on Cards

Ask the Patient

When in Doubt, Call the Insurance Company

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SLIDE 15

HDHPs & HSAs‐How to Manage HDHPs & HSAs How to Manage

Collect at or Prior to the Time Of Service

Staff Should be Pre‐certifying Everything to Determine if Deductible Has Been Met

If the Deductible Has Been Met, Nothing is Due

If the Deductible Has Not Been Met, the Contracted Amount is Payable by the Patient Patient

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SLIDE 16

Your Role with Insurance Your Role with Insurance Carriers

Patients may not understand their plan

 Educate yourself and your staff on the

plans

C i Pl i diff i D C d  Certain Plans may require differing Dx Codes

 Ask Payors to attend monthly staff

meetings to educate staff meetings to educate staff

 Make it your mission to help the patient

understand their responsibility understand their responsibility

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SLIDE 17

Tools Tools

  • AMA Model Managed Care Contract
  • MGMA – Practice Perspectives on Payor

Performance

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Legal Considerations in the C ll ti P

SUSAN E. ZIEL

Collection Process

NURSE ATTORNEY AND PARTNER KRIEG DEVAULT LLP

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Bad Debt Requirements Bad Debt Requirements

CFR 8 B d d b i b d b

  • 42 CFR 413.80. Bad debt reimbursed by

Medicare but only if:

D b l d i d i d f

 Debt relates to covered services, derived from

deductible/coinsurance amounts

 Reasonable collection efforts were made  Reasonable collection efforts were made  Debt uncollectible when claimed as worthless  No likelihood of recovery in future

No likelihood of recovery in future

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Covered Services Covered Services

C d i

  • Covered services
  • Medically necessary
  • Prior authorization/certification
  • Fee schedule
  • Exceptions to fee schedule
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Reasonable Collection Efforts Reasonable Collection Efforts

  • C

bl ff t f M di d ll

  • Comparable efforts for Medicare and all non‐

Medicare patients

  • Issuance of bill post discharge/death to
  • Issuance of bill post‐discharge/death to

patient or third party responsible for financial

  • bligations

g

  • Subsequent billings, collection letters,

telephone calls

  • May include collection agency and court

action, as necessary

  • Documentation required
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SLIDE 22

Collection Efforts (cont.) Collection Efforts (cont.)

S i l S i A

  • Social Security Act

 1128A: illegal remuneration to Medicare patients

includes waiver of coinsurance/deductible includes waiver of coinsurance/deductible amounts, subject to certain exceptions

 1128B(b): illegal remuneration to Medicare

1128B(b): illegal remuneration to Medicare patients

  • OIG Fraud Alert (1991)

( 99 )

 Routine waiver of coinsurance and deductible

amounts after billing Medicare for full charge represents a false claim

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Collections Collections

D b d d ll ibl i h l i

  • Debt deemed uncollectible without applying

Medicare “reasonable collection efforts” if indigence confirmed and no evidence of indigence confirmed and no evidence of improvement in patient’s financial condition

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Indigence/Financial Need Indigence/Financial Need

  • Establish before discharge or within reasonable
  • Establish before discharge or within reasonable

time before current admission

  • Determined by provider not patient

Determined by provider, not patient

  • Take into account patient’s total resources
  • Determine no other source legally responsible

Determine no other source legally responsible for bill

  • File documentation : policy, application,

supporting documentation

  • Sliding scale, extended payment, or both

d l f ( ) h

  • Update at least every four (4) months
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Patient Agreement to Pay for Services

W i i fi i /

  • Writing to confirm patient/guarantor

payment obligations beyond those made in admission paperwork admission paperwork

 Scope of services  Anticipated fee(s)  Anticipated fee(s)  Anticipated third party payer payments, if any  Patient/guarantor obligations  Patient/guarantor obligations  Enforceability

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B d D bt N Wh t?

PHIL ROBERTS

Bad Debt – Now What?

PRESIDENT & CEO SENEX SERVICES CORP.

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Bad Debt – Now What? Bad Debt Now What?

  • Best Practices You Should Expect

p

  • FICO Scores for Bad Debt Patients
  • Patient Satisfaction

at e t Sat s act o + Maximized Bottom Line

  • You Can Have Both!

You Can Have Both!

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SLIDE 28

Best Practices Best Practices

  • Expect Patient Stewardship

G d C ll l

  • Good Collections = Patient Retention Tool
  • Selecting a Good Collection Partner:

 Healthcare exclusive/focused  Compliance – Fair Debt Collection Practices Act, the Fair Credit

Reporting Act (and the FACT Act), the Telephone Consumer Protection Act, the Health Insurance Portability and y Accountability Act (and the HITECH Act), the Graham Leach Bliley Act, and the IRS Dash 2 regulations (for buyers only to comply with issuance of 1099‐C)

 Industry – ACA, DBA, HFMA, MGMA  Patient Centric – training, principles, pledges, etc.

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Bad Debt in Perspective Bad Debt in Perspective

  • ACA: Fastest growing segment of bad debt in

ACA: Fastest growing segment of bad debt in economy

  • Trending toward 7 % of hospital revenue

g 7 p

  • MGMA: Patient responsible heading for 30%
  • ACA: < 10% recovery average for health care

ACA: < 10% recovery average for health care bad debt

  • Most providers don’t have good insight into their
  • st p o de s do t a e good

s g t to t e

  • wn performance — measures, benchmarks,

data

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Bad Debt in Perspective Bad Debt in Perspective

30 00% 35.00% 15.00% 20.00% 25.00% 30.00% 0.00% 5.00% 10.00% 326 351 376 401 426 451 476 501 526 551 576 601 626 651 676 701 726 751 776 801 No

  • In today’s economy, at 365 Days 99% of Bad Debt

326 ‐ 350 351 ‐ 375 376 ‐ 400 401 ‐ 425 426 ‐ 450 451 ‐ 475 476 ‐ 500 501 ‐ 525 526 ‐ 550 551 ‐ 575 576 ‐ 600 601 ‐ 625 626 ‐ 650 651 ‐ 675 676 ‐ 700 701 ‐ 725 726 ‐ 750 751 ‐ 775 776 ‐ 800 801 ‐ 825 No Hits FICO Scores

Patients will NOT qualify for mortgage

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Today, Bad Debt Really Matters Today, Bad Debt Really Matters

  • Avg. hospital net profit: 1‐3 %
  • Low margin, high volume business
  • We’re not utility companies – no cancels

y p

  • $100 K in new recovery = $5 M in revenue @ 2 %

margin

  • Today, CFO measured on bottom line
  • Increased recovery = increased profit !

y p

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Drivers Drivers

  • Mergers, integration
  • Revenue enhancement and/or cost reduction
  • Create working capital/boost cash on hand

g p

  • Create more predictable cash flow
  • Bank or bond refinancing
  • Streamline vendors and collection process
  • Quick recapture for merging physicians

Quick recapture for merging physicians

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Understanding Bad Debt Sale Understanding Bad Debt Sale

  • Recover A/R sooner, simpler, and more
  • Same file format as collection firm
  • Same ability to recall, manage accounts, “control”

P id i id h fil i l d l “ i h ”

  • Provider is paid when file is placed, plus “gain share”
  • Buyer takes risk: non‐recourse
  • Boost collections or replace traditional collections
  • Boost collections or replace traditional collections
  • Enhance overall recovery
  • One‐time transaction to boost days cash on cash

One time transaction to boost days cash on cash

  • Industry estimates of 750‐1,000 hospitals selling
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Program: 2ndary Sweep Up Program: 2 Sweep Up

  • Sell old, inactive balances
  • #365 days to 5 5 yr old accounts
  • #365 days to 5.5‐yr‐old accounts
  • $10,000,000 annual bad debt placement

X .90 percent unrecovered 9 p = $9 M X 5 years = $45 million X .0075 = $337,500

  • Equivalent to hospital revenue $17 M in revenue @ 2 %

margin g

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Program: 2ndary “Booster” Program: 2 Booster

  • Call back placements @ 365 days
  • Sell monthly
  • Boost net recovery by 1‐3 percent (12‐13% ++)

d l d h

  • Paid at placement and/or “gain share”
  • $10 M placement over 12 months X .0075 = $75,000
  • Equivalent to hospital revenue $3 75 M in revenue @ 2 %
  • Equivalent to hospital revenue $3.75 M in revenue @ 2 %

margin

  • Most don’t have a 2ndary program ‐ you should!

Most don t have a 2 program you should!

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SLIDE 36

Understanding Bad Debt Sale Understanding Bad Debt Sale

  • CMS 2008 Joint Signature Memorandum

 “Clarification of Medicare Bad Debt Policy/Bad

Debt Policy Related to Accounts at a Collection A ” Agency”

  • Subsequent Recovery
  • Reconcile on following report
  • Top hospitals sell regularly without affecting

C R i Cost Reporting

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Questions for the Panel

Catherine M. Weaver, Somerset CPA PH: 317. 472‐2230 Email: cweaver@somersetcpas.com Susan E. Ziel, Krieg DeVault Law PH:317.566.1110 l l kdl l Email: sziel@kdlegal.com Phil Roberts Senex Services Corp Phil Roberts, Senex Services Corp. PH:317.613.1002 Email: robertspt@senexco com Email: robertspt@senexco.com