Mercy Health: A Revenue Cycle Turnaround Story Shannon White , - - PowerPoint PPT Presentation

Mercy Health: A Revenue Cycle Turnaround Story

Shannon White, President and COO, Ensemble Health Partners Anthony Seminaro, Regional CFO, Mercy Health Youngstown

Now more than ever, a healthy revenue cycle is an essential component to the viability of an organization; one that requires an innovative approach and impeccable coordination.

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Current Industry Environment

• Growing financial

pressures require hospitals and healthcare systems to improve key performance indicators.

• 98 percent of C suite

members are considering

• utsourcing clinical

and nonclinical functions to a third- party vendor

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https://www.prnewswire.com/news-releases/by-2022-average-hospital-costs-must-be-reduced-by-24-to-breakeven-and-outsourcing-may-be-the-solution-says-black- book-300643743.html https://images.magnetmail.net/images/clients/HFMA/attach/HFMA_MAP_Outsourcing_the_Revenue_Cycle.pdf

About Mercy Health

21 Hospital System $3.5B Annual Net Revenue One ministry serving eight regions in Ohio and Kentucky

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• Uncharted waters – unprecedented financial deficit
• Disparate systems and vendors
• Missing a master plan
• Lack of accountability
• System conversions represented significant risk
• Leadership structure not suited for size of organization
• Not in the detail
• Silos

Mercy Health Revenue Cycle: A Challenging Road Ahead

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Prior to April 2014 Decentralized business office structure April 2014 to October 2015 Partnership with large national RCM vendor Developed centralized business office in Mason, OH November 2015 Ended relationship with national RCM vendor Begin remigration back to native patient accounting systems December 2015 Begin migration

• f Kentucky

markets to future state patient accounting system February 2016 Ensemble assessment completed and recommendations presented March 2016 Ensemble began RCM leadership agreement with Mercy Health May 2016 Mercy Health purchased Ensemble Health Partners. Ensemble becomes a wholly owned subsidiary of Mercy Health and continues to lead Mercy Health Revenue Cycle

Ensemble Engagement Begins Pre-Ensemble

A Recipe for Disaster

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Multiple Patient Accounting Systems Decentralized Unionized Markets Outsource to Insourcing Operations Varying Market Sizes Across Multiple States

A Recipe for Disaster

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97% 40

10

50+

$130M

Cash Collections to Net Revenue Ratio Cash Collections Shortfall

Unbilled Days Holding in Accounts Receivable

Outsourced Revenue Cycle Vendors Basis Points Point-of- Service Collections

Case Study: Vendor Analytics

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Number of Vendors: 18 Invoices Audited: 369 Line Item Charges Audited: $2.77M

A Challenging Road Ahead

• Errors identified in lookback: $2.2M
• Monthly error run rate: $100K-$200K
• Average Error Rate: 6.76%
• Cost Savings: 5%

The Ensemble Difference Mercy Health

Case Study: Performance Improvement Through Insourcing

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A Challenging Road Ahead The Ensemble Difference Mercy Health MVA Vendor

• Baseline Annual Cost: $2.1M
• Baseline Annual Cash: $20.7M
• Cost to Collect: 10.1%

Worker’s Compensation Vendor

• Baseline Annual Cost: $2.4M
• Baseline Annual Cash:$21.2M
• Cost to Collect: 11.3%

MVA Vendor

• Baseline Annual Cost: $1.7M Cost Reduction
• Baseline Annual Cash: $3.7M Cash Increase
• ROI: 4,618% Increase
• Cost to Collect: 9% Reduction

Worker’s Compensation Vendor

• Baseline Annual Cost: $2.1M Cost Reduction
• Baseline Annual Cash:$2.2M Cash Increase
• ROI: 5,488% Increase
• Cost to Collect: 10% Reduction

Ensemble Denials and Recovery Differentiators

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Real-time reporting engine leveraging 835s and close tracking of appeal success rates. Advanced analytics to predict denials and pinpoint denial root causes. Integration of legal expertise to challenge non-compliance with ERISA laws and other local laws. Deep clinical skills to work complex denials. Intelligent workflow (Ensemble IQ) to escalate denials early via fully integrated web scraping. Appeal process automation to increase productivity for technical appeals.

Denial Avoidance - Timeline & Results

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• f first-pass

denial data (away from write-

• ffs) as focus

Client Benchmarks:

• 2015 initial denial

rate: 10.85%

• 2016 initial denial

rate: 10.29%

• 2017: initial denial

rate: 9.34%

Case Study: Denial Avoidance Financial Impact

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A Challenging Road Ahead

• .94% Denial rate reduction in less than 12 months
• $174.2M Gross charge denial reduction
• 65% Appeal overturn rate
• $13.4M Net impact (appeal overturn rate)

The Ensemble Difference

First Pass Denial Rate YTD 2016: 10.29%

Mercy Health

Case Study: Patient Accounting Conversion

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INCREASED NET REVENUE BY

$41,358,277.73 POST EPIC GO LIVE

THROUGH DOCUMENTATION BASED CHARGE CAPTURE AND REVENUE EDUCATION

$3,326,706.76 REDUCTION IN NET AR

OVER 3 MONTH TIME PERIOD THROUGH WORKFLOW AND SYSTEM EFFICINCIES

$5,100,000 Net Benefit

FROM CHARGE MASTER CONFIGURATION INITIATIVES RETURN TO BASELINE GROSS REVENUE WITHIN 4 DAYS

5.4% Net Revenue Increase

CASH FLOW NORMALIZATION < 90 DAYS [EPIC PUBLISHED AVERAGE 180 DAYS]

Mercy Health: 6 Hospital Market in Ohio

Mercy Health Systemwide Impact of Automation

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CLAIM STATUS INTEGRATION RESULTING IN OVER

30,000 ACCOUNTS QUALIFYING FOR AUTOMATED

STATUS AND FOLLOW UP AUTHORIZATION, VERIFICATION, NOTICE OF ADMISSION, AND VERIFICATION AUTOMATION RESULTS IN 75.9% OF WORKFLOW AUTOMATION

$7.5M – $7.8M BENEFIT

IN REDUCED FTE EXPENSE THROUGH AUTOMATION OF WORKFLOW POINT OF SERVICE 95.83% IMPROVEMENT POST AUTOMATED ESTIMATES AUTOMATED STATUSING

EQUIVALENT TO 33-38 FTEs AT

AVERAGE PRODUCTION PRE-ACCESS AUTOMATION WORKFLOW

EQUIVALENT TO 118 FTEs, OVER 90,000 MONTHLY ACCOUNTS

PRE-REGISTRATION AND AUTHORIZATION DAYS OUT IMPROVEMENT FROM 1-2 DAYS TO

5 DAYS OUT (NON-EPIC) 10 DAYS OUT (EPIC)

AUTOMATED CHARGE CAPTURE AUDIT OF ALL ACCOUNTS RESULTING IN OVER $15M ADDED

NET REVENUE

100% VENDOR INVOICING REVIEWS IDENTIFIED $3.3M OF INVOICING

ERRORS RECOVERED

Avoiding Disaster and Heading to Excellence

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Clear and Concrete Steps:

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• 1. Establish routine meetings with CFO or VP finance – Gain Vision and Buy-in
• 2. Develop a scorecard
• 3. Set a benchmark to measure against – Understand the definitions
• 4. Establish a multi-disciplinary taskforce
• 5. Creating Sustainable Success

1) Establish Regular Top-Level Meetings

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• Key participants: CFO or VP finance
• Recommended Cadence:

Monthly at Minimum and promote an open door concept for any arising concerns

• Suggested Structure:
• KPI Review (performance against benchmark and change since last meeting)
• Action plan and status review
• CFO expectations
• Assess current resources and structure
• Updates on any new service line thoughts or payer changes

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2) Develop a Scorecard

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3) Set a Benchmark

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• Suggested sources
• MAP – Best for …
• HBI – Best for …
• MGMA – Best for …
• Dig in and understand the “why” behind your variance from industry benchmark
• Three key questions to ask:
• 1. Do I have a resource opportunity? Staffing/Capital etc.
• 2. Do I have a technology opportunity? Manual vs. automated processes
• 3. Do I have a leadership opportunity? Who is the agent for operational improvement
• Understand the definitions of the metrics
• What is a Denial? First Pass and Write-offs?
• Cost to collect
• Cash to net revenue
• MAP Application

Consistent Results Driven By Analytics

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Cash Collections CFO Summary Reporting Key Indicators to Industry Best Practices Quarterly Executive Summary Reporting

Daily Cash Collections Tracking

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Monthly CFO Summary Client Example

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Contents: Category Report Description

Net Revenue Trending

Net Revenue Trending YTD with Comparison to Same Period Prior Year and Prior 90 Day Rolling Average

Cash Trending

Cash Trending YTD with Comparison to Same Period Prior Year and Prior 90 Day Rolling Average

Cash Performance

Cash Performance Trending to Cash Goal Point of Service Collections

Point of Service Collections Trend

POS Collection Performance with comparison to Net Revenue

Gross Revenue Trending by Patient Type Revenue Trending YTD with 90 day comparison by Patient Type (I/O/E) Gross Revenue Trending by Payer

Revenue Trending YTD with 90 day comparison by High Level Payer Group.

Gross Revenue by Department

Revenue Trending YTD with 90 day comparison by Charge Department

Case Mix Index Trending

Average CMI Trending by Month by Type with comparison to prior year and prior 90 day average

Payer Mix Trend

Payer Mix percentage trend with 90 day comparison by payer group. Unbilled

Unbilled

Unbilled Days and Dollars Trending with special focus of DNFB vs. DNFS Adjustment Trending

Contractual Adjustment Trending

Contractual Trending YTD with 90 day comparison by T-Code

AR Debit Balance Comparison (Insurance vs

Month End Debit Summary Aging with comparison to prior year end and prior month. Focus on Insurance vs. Self Pay Breakout

AR Comparison by Payer

Month End Summary Aging by High Level Payer Group with comparison to prior year end and prior month. Focus on Insurance vs. Self Pay Breakout

AR Debit Trending EOM

Current Month End Summary Aging by High Level Payer Group

Change in AR

Month End Change in AR vs. Prior month by High Level Payer Group

Credit AR

Month End Credit Balance AR Trend

Denial Write Off Trending

Denial Trending YTD with 90 day comparison by Denial Category

Initial Denial Rate

Trending of Initial Denied Dollars as a percentage to total charges

Underpayments

Trending of Underpayment Dollars Accounts Receivable Denial & Underpayment Tracking

CFO - Revenue Cycle Monthly Reporting Package July 2018

Net Revenue and Cash Performance Revenue Trending

Key Indicators at a Glance

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Executive Summary Example

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Revenue Cycle Performance: Results Start Here

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*Total Financial Impact represents the net improvement/savings since Ensemble’s Engagement as of December 31, 2017 from the initial tracking baseline

• f fiscal year 2015 at the time of Parallon departure

Revenue Cycle Performance Tracking Timeline FY 2015 - 2017

Revenue Cycle FTE Benchmarking

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Primary Staffing Sources: Healthcare Business Insights (HBI) https://www.healthcarebusinessinsights.com/ Healthcare Financial Management (HFMA) https://www.hfma.org

Key Considerations of Staffing Increase/Decrease

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• Percentage of Manual Charge Entry vs. Documentation based charging
• Current state and ability to build claim edits in Host System
• Outsource Vendor utilization in Accounts Receivable (WC/MVA, Small Balance, Self-pay)
• Clearinghouse functionality regarding accelerated secondary claims vs. paper print and mail
• Percentage of client bill/industrial bill that requires invoicing
• Managed Care contract language surrounding clean claim turn around; appeal methodology and timeliness
• Insurance Follow Up Work Queue escalation and build
• IVR functionality in Customer Service
• Statement vendor vs. internal print and distribution
• Percentage of Electronic Remittance to Paper Remittance and Lack of OCR technology
• Usage of Lockbox for payments and correspondence
• Correspondence work queues and flow vs. manual mail movement
• Account centric electronic document storage vs. paper storage (EOBs, correspondence, itemized statements, etc.)
• Revenue Cycle analytics surrounding critical areas such as denial tracking, appeal monitoring, audits, etc

4) Establish Multi-Disciplinary Taskforce

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• It takes a team and the coach is the CFO and/or finance leader
• Key participants:
• Patient access
• HIM and coding
• High volume and $ charge areas (radiology, surgery, ED)
• Case management/utilization management
• Recommended Cadence:

Depending upon KPIs could be weekly, but at minimum monthly

• Suggested Structure:
• KPI Review (performance against benchmark and change since last meeting)
• SCRUM (each leader speaks)
• What happened since last meeting
• What actions are currently underway
• Any blockers
• Address denial patterns, payer changes, charge lag, unbilled edits etc.

5) Keys to Creating Sustainable Success

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• CFO buy-in is a must
• Leadership buy-in also a must
• Patient access
• HIM and coding
• High volume and $ charge areas (radiology, surgery, ED, case management)
• Goals and performance monitoring. Early and often
• Focus on increasing revenue vs cutting costs
• Drive vendor engagement and performance visibility at the board level
• Create/foster a culture of success

Sustaining Consistent Results

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Technical Skill + ___________ = Results

Creating A Great Culture!

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Giving Back – over $100k raised YTD for local charities. Associate-Led SWAG Committee – serves as voice for associates and develops future leaders at Ensemble. SMART Program – Established onboarding for new hires company wide with over 100+ SMARTs. Leadership In Training Program – a broad leadership development foundation providing future leaders hands-on experience throughout the entire revenue cycle. Professional Development – Ongoing professional development is important from top leaders to associates, kicking off Lead Now and R Factor training in 2018 and holding our annual EDGE Conference and Leadership Retreat. Diversity and Inclusion – comprised of four committees, workplace, workforce, marketplace and community, the Diversity and Inclusion team is made up of 22 associates with a vision is to ensure the Ensemble culture is diverse and in it’s workforce, associate experiences, and thinking in an inclusive environment.

Culture, Accountability and Performance Starts at Onboarding

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• Attend General Orientation
• Complete Role Based

Training

• Onboarding Checkpoints
• Obtain Professional Revenue

Cycle Certification

• Continuing Education and

Career Paths

Associate Onboarding

• Attend applications training as

needed for role

• Attend a standard New Leader

Orientation within the first 45-60 days of hire

• New Leader 60-Day Touch

Base with Executive Leadership

• Obtain Professional Revenue

Cycle Certification

• Ongoing Leadership

Development

Leader Onboarding

• Attend General Orientation
• Customized Executive

Assimilation

• Executive 60-Day Onboarding

Survey

• Obtain Professional Revenue

Cycle Certification

• Ongoing Leadership

Development

Executive Onboarding

Continued Training and Education Drives Results

Ongoing training and education opportunities show Ensemble’s commitment to the professional development of our associates:

• CRCR Certification
• SMART (Specialized Mentor And RevCycle Trainer) Program
• Competency Testing
• Leadership Development
• Leadership Training Series
• Lunch and Learns
• EDGE Conference
• ACFO Program
• Revenue Cycle Leadership Program

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• E

nsemble’

Proven Results: End-to-End Revenue Cycle Management

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Recovered $207,206,218 of cash shortage $70M Added Cash Realization above overall shortfall Cash collections as % of net revenue from 96.49% to 103.28% $239,805,900 in post denial and underpayment recoveries Identified and recovered $2.126,485 in invoicing errors $28,347,725 annualized reduction in cost to collect expense 45 patient accounting conversions in a 30 month period $30,423,208 net revenue increase from charge capture initiatives Unbilled reduction of 5.1 days $36.7M RTP from Medicare Credit balance reduction of 1.4 days 29.4% reduction of insurance A/R over 90 days 85.8%

Mercy Health: 21 Hospital System, $3.5B Annual Net Revenue

The Trust Continues to Build

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Client Testimonials

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”Ensemble Health Partners first partnered with the Mercy Health family in May 2016, and has quickly proven its benefit to our ministry, our patients and the communities we serve. Ensemble’s accountability, performance and commitment to excellence have produced results. Cash collections have improved exponentially under Ensemble’s leadership, elevating our performance among the nation's best. At the same time, Ensemble has improved customer service with compassion and integrity, integrating closely with our other support services to ensure the improvements are sustainable and problems are identified and corrected upstream before they become significant issues. Above all else, we are a more responsive and reliable operator with the professionals at Ensemble leading our revenue cycle strategy.”

John Starcher, President and CEO, Mercy Health

Questions

Solutions@Ensemblehp.com