Accelerating your revenue cycle webinar series Draft 2 _ 072013

Accelerating your
Revenue Cycle:
From Patient Encounter Through Account Resolution
Chastity D. Werner, RHIT, CMPE, NCP
NextGen Educational Series
July 22, 2014

Learning Objectives
Characteristics of Best Performers
Efficient Encounters = Revenue Cycle Success
Measuring Revenue Cycle Performance
Identifying Your Opportunities

Accelerating your Revenue Cycle:
• Technology
• Staff
• Payers
• Process

Technology
• Systems
 Interface when possible
 Efficient templates

Technology
• HIE

Technology
• EHR/PMS communicate
• Upgraded regularly
• Continued education
• Embrace new opportunities

Schedulers
Efficient, strong phone & customer service skills,
understands billing process, well trained in patient
collections and payer policies and procedures.
Staff
• Right fit
• Productivity
• Weekly meetings
Front desk
Smiles, friendly, efficient, multi-tasking abilities, high
energy, strong communication skills, organized, well
trained in patient collections.
Set expectations:
They represent your office
Patients are first
Team environment
Billing issues affect all departments
Reasons for underproduction
Do not know what to do
Do not know how to do it
Do not know why they are doing it
My way is better
Something else is more important
I must be doing it, you left me alone
I am rewarded for not doing it
Weekly meeting
Charges/payments
Payer updates/changes
Patient issues
Upcoming events
Training
Areas of concern
End it on a positive note!
Always follow-up on questions/concerns

Staff
• Team player
• Reinvest
• The “Why” factor

“The lowest level of performance by any employee,
allowed to continue without corrective action, becomes
the highest level of performance that can be required of
any other employee in a similar position with the
employer.”
Reference: Rosemarie Nelson MGMA Healthcare Consultant
The ROI of IT: Best Billing Practices

Payers
• Credentialing
• Payment rules
• Appeal process
• Stay up-to-date
http://www.ama-assn.org/ama/pub/physician-resources/practice-management-
center/health-insurer-payer-relations/payer-specific-information.page?

Payers
• Pre-auth/Pre-cert rules
• Contracted fee schedules
• Electronic options
• User names & passwords
Reference: AMA 2012 National Health Insurer Report Card

Process
• Does it make sense?
• Uniform
• Set expectations
• Policies & procedures
 Standardized
 Update regularly

EFFICIENT ENCOUNTERS =
REVENUE CYCLE SUCCESS

Efficient encounters
• Scheduling
• Eligibility & benefits verification
• TOS
• Claims generation
• Payment processes
• Account resolution
• Collection process

Efficient Encounters = Revenue Cycle
Success
Capture the right information
Account review
Patient expectations
Patient demographics
Work #, cell phone, email
Guarantor details
Employer information
Insurance details
“Ms. Smith,
I see you have a past due amount of
$50.00. How would you like to take care
of that today? We accept Visa,
MasterCard, or do you have an FSA?”
“We expect payment at the
time of service. ”

Sources: (left) Kaiser Family Foundation/Health Research and Educational Trust, Employer Health Benefits Annual Surveys, 1999–2012; (right) authors’
estimates based on CPS ASEC 2001–12, Kaiser/HRET 2001–12, CMS OACT 2012–21.
Projected average family premium as
a percentage of median family
income, 2013–2021
Cumulative changes in insurance
premiums and workers’ earnings,
1999–2012%
%
180%
47%
38%
Projected
172%
Success

Success
Percentage of Covered Workers
Enrolled in a Plan with a General
Annual Deductible of $1,000 or More for
Single Coverage
Note: These estimates include workers enrolled in
HDHP/SO and other plan types. Source: Kaiser/HRET
Survey of Employer-Sponsored Health Benefits, 2006-
2010.
“National health expenditures are
expected to increase from $2.9 trillion
to $5.5 trillion. Business and
households are projected to pay half
of total nation health care costs in
2023, while the federal government
will pay 32% and state and local
governments will pay 18%.
Confronting Costs: Stabilizing U.S. Health Spending While Moving
Toward High Performance Health Care System. 2012

Success
Reference: InstaMed Trends in Healthcare Payments Annual Report: 2012
% of providers
who knew patient
responsibility at
the TOS
% of patients
who knew their
financial
responsibility
It costs between
$0.05-$0.74 to check
eligibility
How much will it save
you to know what your
patient owes at the
TOS?

Success
Reference: http://www.aetna.com/provider/medical/service_med/electronic_med/edi_calculator/EDI_Savings_Calc.html
Eligibility & benefits verification
• Increase time with patients
• Faster payments
• Increased efficiency

Success
Automate
Centralize
Payer websites
Is it worth it? Choose your criteria:
Services
Payers
Everything
Use the
information
obtained!
3 days in
advance

Success
Compare
coverage to
expected treatment
& fee schedule
Contact
patient–
patient
counseling
Set alerts in
system &
schedule
Collect at
TOS

Success
TOS
• Confirm information
• Collect at check-in
• Collect at check-out
“How would you like to pay
today? We accept Visa,
MasterCard, cash and checks.”

Success
“If patient payments are not managed correctly, they can cost three to five times
more to collect than payer payments due to paper-based, manual processes.
These costs are further escalated by rising patient bad debt, which was estimated
to have been more than $65 billion in 2010.”
TOS Collection % for Providers
Reason the provider
did not collect

Success
TOS
• Complete record 24 hours
• Computer Assisted Coding (CAC)
• Interface charges

Success
Claim generation
• Charge lag 24 hours (48
hours out of office services)
• Claim scrubbing
 Edits
 Correction
Do you update your
claim edits on a
regular basis?

Success
Utilize a
clearinghouse
Submit charges
within 24-48
hours
Initial follow-up
24 hours
Level 1 rejections
997 claim rejection report
277u claim status
report

Success
Reconciliation
ERA/EFT
PPACA
Zero pays
Automate
46%
51%
6% increase over 2
year period
Reason payer
payments were not
received electronically

Success
Reference: www.cms.gov/.../HIPAA-Administrative-Simplification/.../Deadlines-and...
Payment processing
• PPACA

Success
Reference: AMA 2012 National Health Insurer Report Card
96 – Non-covered
charge(s). At least
one Remark Code
must be provided.
Claim Adjustment
Reason Codes
(CARC)
Claim adjustment
reason codes
communicate an
adjustment, meaning
that they must
communicate why a
claim or service line
was paid differently than
it was billed. If there is
no adjustment to a
claim/line, then there is
no adjustment reason
code.
16 – Claim/service
lacks information
which is needed for
adjudication. At least
one Remark Code
must be provided.
www.wpc-edi.com/reference/codelists/healthcare/
204 – The
service/equipment/drug
is not covered under
the patient’s current
plan.

Success
Reference: AMA 2012 National Health Insurer Report Card www.wpc-edi.com/reference/codelists/healthcare/
Remittance Advice
Remark Codes (RARC)
Remittance Advice Remark Codes
(RARCs) are used to provide
additional explanation for an
adjustment already described by a
CARC or to convey information about
remittance processing. Each RARC
identifies a specific message as shown
in the RARC List. There are two types
of RARCs- majority are supplemental
to the CARC codes, but some are for
information purposes only.
N130 – Consult plan
benefit documents or
guidelines for information
about restrictions for this
service.
N179 – Additional
information has been
requested from the
member. The charges will
be reconsidered upon
receipt of that information.
N386 – The decision was based on
a National Coverage Determination
(NCD). An NCD provides a
coverage determination as to
whether a particular item or service
is covered. A copy of this policy is
available at
www.cms.gov/mcd/search.asp. if
you do not have web access, you
may contact the contractor to
request a copy of the NCD.

Success
Payment Processing
• Contractual
• Non-contractual
• Post all zero pays
• Utilize system automation
• Reconciliation

Success
Payment processing
• Reconciliation Process:
 1)Separate deposits
 2)One batch per deposit (i.e. ERA/EFT)
 3)Uniform batch description
» (i.e. $34,584.03 Anthem 5/6/2013)
 4) Match to bank deposits to system
» Download each into Excel format
» Data sort by dollar amount
» Utilize other data to compare if needed

Success
Patient Statements
• Electronic statements
 Cost 58% less than paper
• Make it convenient
• Two statements
 Day 0
 Day 30
• Collection letter Day 60
• Day 75 turnover
E-statements save providers
approximately 42% compared
to paper statements.
In paying their
medical bills
electronically
It is estimated that consumers in
the U.S. will spend more than
$300 billion online in 2016.
Increased 7%
from 2011-2012
% of patients
receiving
medical bills
via email
Reference: Gartner Group, HFMA, and HH&N Research

Success
Account resolution
• 24 hours after submission
• Universal note area
• 277/997 reports
• Automate when possible
• Appropriate reports
• Review notes & tasks
• 14-21 days clearinghouse
• 31+ days payer website/phone
Payer
High $$$ Down
DOS
Group by Patient

Success

Success
100 claims a day X 20 days a month
2,000 claims
20% denial rate
2,000 claims X 20% = 400 claims
33% of denials are never recovered
400 X 33% = 132
132 X $100.00 (average reimbursement) = $13,200 monthly
Source: The Physician Billing Process: 12 potholes to avoid in the road to getting paid, ed 2,
Walker-Keegan, Woodcock, Larch.13

Success
Source: The Physician Billing Process: 12 potholes to avoid in the road to getting paid, ed 2,
Walker-Keegan, Woodcock, Larch.13
$10.67 staff time
$ 1.50 supplies
$ 1.75 interest
$ 1.00 overhead_______________________
$14.92
$14.92
x 400
$5,968
Monthly
_______
$5,968
x 12
$71,616
Annually
________

Success
Should it be
written off?
Contractual versus
non-contractual
adjustment
Is a
correction
needed?
If so,
correct &
resubmit!
Should it be
appealed?
Collect data,
follow payer process,
involve patient &
track status

Success
Collection process
• Automate process
• Monitor results
• Write-off at turnover
Write off utilizing specific
code; create reports by
specific code to track
agency results.

Advanced
Staff
Training
Eligibility
Cost
Estimation
Counsel
Patient
TOS
Collection
Bad Debt
Collection
Process
Dismissal
Process

Success
Reference: http://caqh.org/eft_enrollment.php
Where do you go from here?
Decide what is right for your practice!
Investigate your options
Automate when possible
Centralize processes
Stay up-to-date on new options
Partner with your clearinghouse
Keep an open mind
Think outside the box

MEASURING REVENUE CYCLE
PERFORMANCE

• What is important?
• Reporting and analysis
• Tracking and acting

What is important?
• Collections
 Cash in the door
• Production
 Units to produce the cash

What is important? Collections!
• A/R
 Charges, payments, & adjustments
– Provider
– Practice
 Days outstanding
 Payer mix
 Collections per RVU
– Service line
– Provider

What is important? Collections
• Payments
 Third party
– Underpayments
– Denials and rejections
 Patient
– TOS collections
– Commitment to payment plans

What is important? Collections
• Credit balances
 Patient
 Third party
• Bad debt
 % bad debt to total revenue
 Collection agency recovery

What is important? Production!
• CPT/RVU production
 Location
 Provider
• Case mix
 Location
 Provider

Reporting and analysis
• Audience
• Content
• Presentation method
• Frequency

• Audience - Providers
 Short & sweet
 Personalized
• Audience - Executive
 Broader content
• Presentation method
 Narrative
 Columnar
 Graphical

• Daily
 Denials and rejections
 TOS collections
 Appointments with no charges
 EFT/ERA reconciliations

• Weekly
 Third party underpayments
 TOS collections

• Monthly
 Charges/payments/adjustments
 CPT/RVU utilization
 Denials and rejections summary
 Bad debt
 Credit balances
 Patient underpayments

• Quarterly
 Capitation plan performance
 Payer mix
– Charges
– Payments
• Annually
 Fee schedule assessment
 Capitation plan performance
 Budgeted revenue vs. actual revenue
 Budget production vs. actual production

Tracking and acting
• KPI
 Data point or criteria
• Benchmark
 Type of KPI
 Data point to measure results against
 Internal or external

Tracking and acting
• Why use KPI’s?
 Measure what’s important
 Identify trends
 Compare progress to expectations
 Incentivize desired behaviors

Tracking and acting
• KPIs
 % Co-pays collected vs. total possible co-pays
 Charge lags
– Office visits
– Off-site services
 Budgeted charges
 % clean claims
 Unbilled charges
 Staff production standards
 Denials
 Payer mix

Tracking and acting
• How do you use KPI’s?
• Dashboard
 Snapshot summary of key results
– Internal benchmarks
» Historical
– External benchmarks
» Marketplace
» Industry

Tracking and acting
• Dashboard
 Decide what’s most important
 Identify the data point to measure
 Identify the benchmark for comparison
 Design dashboard to meet your practice’s needs
 Populate dashboard
 Act on variances to the benchmark

Key Indicators
Indicator Calculation Significance Frequency Trend
Gross Days
Receivable
Outstanding (DRO)
Total A/R divided by
Average Daily Charge
Indicates how long it
takes to convert a claim
into cash. Monthly
Should be downward trend-
Less than 30
Gross Calculation
Ratio
Total YTD Payments
divided by Total YTD
Charges
Indicates proportion of
charges that are
converted to cash. Monthly Should be upward trend.
Net Collection Ratio
Total YTD Payments
divided by Total YTD
Charges less YTD
Contractual
Adjustments
Indicates effectiveness
of collection efforts on
potential dollars,
including point of
service payments. Monthly
Should be upward trend. 96%
or greater.
% Insurance A/R
90+ Days
Insurance A/R greater
than 90 days divided by
Total Insurance A/R
Low proportion
indicates that accounts
are collected effectively.
Monthly
Should be downward trend-
Less than 10%

Month Charge Amount Adjustment Amount Payments
Jan-11 $ 47,163.00 $ 3,756.00 $ 8,545.00
Feb-11 $ 74,423.00 $ 18,543.00 $33,769.00
Mar-11 $ 88,231.00 $ 36,833.00 $56,173.00
Apr-11 $ 79,734.00 $ 35,148.00 $59,501.00
May-11 $ 80,554.00 $ 18,787.00 $43,334.00
Jun-11 $ 77,603.00 $ 30,781.00 $55,724.00
Jul-11 $ 83,068.00 $ 29,480.00 $59,983.00
Aug-11 $ 71,680.00 $ 18,202.00 $36,654.00
Sep-11 $ 91,644.00 $ 28,819.00 $55,324.00
Oct-11 $ 84,040.00 $ 29,118.00 $53,786.00
Nov-11 $ 68,435.00 $ 36,704.00 $54,793.00
Dec-11 $ 98,092.00 $ 29,624.00 $52,754.00
$- $40,000 $80,000 $120,000
$40,544
$40,575
$40,603
$40,634
$40,664
$40,695
$40,725
$40,756
$40,787
$40,817
$40,848
$40,878
Payments
Adjustment Amount
Charge Amount
Decrease in charges one
month means decrease in
payments succeeding month!
Analyze charges, adjustments & payments monthly.
Correlate with practice/provider production.

Payment Analysis
Payer Name Encounter Chg Amt Count Adj Amt Allowed Amount Fee Schedule Variance
99204 Anthem Blue Choice PPO 15302 $225.00 1 -$105.00 -$120.00 $125.93 -$5.93
99204 Anthem Blue Choice PPO 18179 $225.00 1 -$99.07 -$125.93 $125.93 $0.00
•Run CPT report for date span, by appropriate
payer, & including “Allowed Amount”
•Export the file from PMS to Excel
•Insert column with allowed amount if needed
•Create conditional formula to identify
variances
Compare “allowed
amount” not paid
amount

DOS to date of
documentation
(DOD)
Date of
Documentation
to date of coding
(if not utilizing
CAC)
Date of
Coding to
Date of
Charge
Entry
Date of
Charge Entry
to Claim
Submission
Date of Claim
submission to
Payer
Adjudication
Date of Payer
Adjudication to
Patient
Statement/Denial
Worked and
resubmitted
Total Lag Time
from DOS to
Fully
Adjudicated
Start here
tracking
results

IDENTIFYING
YOUR OPPORTUNITIES

• Assess the situation
 Revenue cycle assessment
 System assessment
• Prioritize the opportunities
• Develop plan for capitalizing
• Implement plan
• Monitor and track results

Revenue cycle assessment
• Lost revenue
• Staff productivity and quality
• Provider documentation
• Payer billing issues
• Common denials
• Missing links in process

Revenue cycle assessment
• Select span of time
 90, 120 or 180 days?
• Set expectations
 Charge lag time
– 24 hours
 Bill lag time
– 48 hours
 Claim note
– 30 days
 Work denial
– 24 hours
 Collection agency turnover
– 90 days from patient responsibility

Patient Name (L, F) Payer DOS Code(s) Charges DCE DCF
Date
Paid Paid Adj. Balance Activity Status Rating
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Total
Average
Legend:
DCE - Date Charge Entered
DCF - Date Claim
Filed

System assessment
 EHR
 PMS
 Interfaces
• Set criteria

Accelerating your Revenue Cycle
What Does An Accelerated Revenue Cycle Mean?
• Communication
• Efficient processes
• Effective procedures
• Optimal systems utilization
• Effective use of resources
• Attentive management

What Does An Accelerated Revenue Cycle Mean?
Maximum return on investment on accounts receivables.
More Revenue.
More Quickly!

www.anderscpa.com/webinar-series
September 18
Sustainable Compensation Models that Incentivize:
Trends & Examples
November 6
Operational Effectiveness and Profitability: Identifying
and Prioritizing Opportunities
December 4
Keeping the Financial Pulse of Your Practice Healthy:
Benchmarking and Trends

Anders Health Care Services
Anders Health Care Services optimizes staff,
resources and revenue for hospitals and
physicians by offering solutions and direction to
complex practice management issues.
We provide an integrated approach from the
financial, operational, compliance and strategic
perspectives.

Jerrie K. Weith, FHFMA, CMPE
314-655-5558
jweith@anderscpa.com
Chastity D. Werner, RHIT, CMPE, NCP
314-655-5561
cwerner@anderscpa.com

Jessica Johnson jjohnson@anderscpa.com
Brian McCook bmccook@anderscpa.com
John McGuire jmcguire@anderscpa.com
Brian Meyers bmeyers@anderscpa.com
314-655-5500
www.andershealthcare.com

Accelerating your revenue cycle webinar series Draft 2 _ 072013

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