How to Transform and Optimize a Large Scale Revenue Cycle Operation March 1, 2016

Transcription

1 How to Transform and Optimize a Large Scale Revenue Cycle Operation March 1, 2016 Michael G. Souza, President & CEO, New England Life Care William E. O Brien, Senior Revenue Cycle Consultant, Culbert Healthcare Solutions

2 Conflict of Interest Michael G. Souza Has no real or apparent conflicts of interest to report William E. O Brien Has a conflict of interest as Culbert Healthcare Solutions was contracted with New England Life Care to conduct the Revenue Cycle assessment. He has a commercial interest in the success of this transformation

3 Agenda Introductions Learning Objectives Who is New England Life Care? New England Life Care Project Scope and Objectives Implementation Accomplishments to Date Findings and Recommendations Implementation Elements Keys for Success Questions

4 Learning Objectives Recognize the steps necessary to ensure that financial improvement is optimized during this large scale revenue cycle process improvement initiative Prepare to manage change and transform financial operations within their organizations, focusing on overall revenue cycle workflows Respond effectively to revenue cycle issues using a step-by-step methodology

5 Health IT Value Steps This Presentation will demonstrate the various stages of STEPS in the following manner S Satisfaction Leadership and staff adoption of revenue cycle process improvements has enhanced New England Life Care s financial situation T Treatment Ability to effectively manage revenue cycle processes E Electronic Information/Data Revenue cycle model that is built on an advanced technological infrastructure that supports connectivity, data aggregation, data analytics and robust reporting P Patient Engagement/Population Management Patient engagement strategies are a primary focus in the New England Life Care revenue cycle model for success S Savings Standardization of practices

6 New England Life Care at a glance Founded in 1987 by Dartmouth Hitchcock & Maine Medical Center Not-for-Profit, 501(e) Cooperative Owned by our Member Hospitals Preferred Provider to 36 Members representing 10,000 beds NELC has: 2,000 patients currently on census 6,000 new patient starts in ,000 patient days of service 94.5% patient satisfaction score 210 NELC team members 6 locations - 3 specialty pharmacies, regional office, 2 satellite nursing offices/distribution centers Accredited by the Joint Commission

7 New England Life Care Facts New England Life Care has led the way in New England since 1987 Comprehensive home infusion therapy Home infusion nursing Specialty pharmacy services Founded to provide a highly specialized service with superior service and extraordinary clinical results, we share our member hospitals commitment to clinical excellence, quality and ethics To better reflect our mission and serve our communities, we changed our corporate structure to a not-for-profit hospital services cooperative in This spurred a period of rapid growth, expanding our hospital membership to 39, including many of New England s most prestigious teaching hospitals NELC has doubled in size over the last four years

8 New England Life Care Facts New England Life Care brings considerable expertise and experience to the delivery of efficient and effective therapeutic infusion services The staff at New England Life Care provides comprehensive clinical management for adult and pediatric home infusion therapies Nutritional Anti-infective Chemotherapy Pain management Other therapies New England Life Care maintains branch pharmacies in Massachusetts Maine New Hampshire With its multi-state staffing network Therapy can often be initiated within hours of notification. Ability to care for patients throughout the service area assures Safe initiation of therapy Avoids costly readmissions Promotes positive outcomes, while controlling costs

9 NELC Geographical Coverage - 20 A Hospital Without Walls 2013 New Starts

10 New England Life Care Project Scope, Objectives and Methodologies Provide Performance Indicators/ Goal Setting Review of Operational IT Capabilities Observation of key Revenue Cycle and Patient Access workflows and processes Metric reviews Interview of key Revenue Cycle staff Document reviews Review Revenue Cycle reports Review Financial reports Focused on critical financial activities vital to the performance of processing patient accounts timely and accurately 3

11 Implementation Milestones To Date AR Aging Tracking Report Total 90+ % AR In seven weeks, Reduced from 37% to 25% as of April AR balance has decreased from $2.2M to $1.4M. The Best Practice goal of 20-25% has been reached Medicaid aging Reduced 90+ aging from 45% to 33%. Almost within reach of the Best Practice goal of 30% Cash Posting Has exceeded monthly goal for March and April. >90 day cash posting is continuing to increase. This is due to the improved follow up processes initiated and monitored As of Thursday, January 14, 2016

12 Implementation Milestones To Date AR Aging Tracking Report Auditor & Collector Backlog Auditor backlog has decreased from a high of 32 business days to 10 business days. Exceeding the Best Practice goal of business days Collector backlog has decreased from 16 business days to 6 business days. Close to the Best Practice of 5 business days Insurance Verification and Authorization TO DO tracking Insurance Verification TO DO list has been reduced from 432 to 32 The team is now current Authorizations TO DO list has reduced from a high of 798 in January to 85. The team is now current individual production is being tracked in many areas As of Friday, December 4, 20

13 Implementation Milestones To Date Biller Tracking Individual biller productivity is now being tracked weekly. Many are reaching the Best Practice goal of 50 claims a day. Unbilled AR Unbilled AR is being tracked weekly by the top 5 payers. Ready To Bill reasons why claims cannot be billed are being monitored weekly. Also, tracking Ready Too Bill by Therapy 30 Day Look Back Revenue Predictor Model report Run weekly. Showing some inconsistency in daily billing Claim Processing Days Weekly count showing the number of days from last date of service that bills are being produced % claims in the 0 30 days timeframe for the three weeks since we began monitoring. Best Practice is >70% As of Friday, December 4, 20

14 Governance Senior Leadership Meets weekly for 1 hour Membership CEO CFO Director of Revenue Cycle Vice President of Regional Administration and Finance Discussion includes program updates and enterprise decisions related to standardizing process Champions Team Meets every Monday for 2 hours Membership includes operational,service line, and Information Technology leadership Discussion includes updates from each operational area and issue escalation 3

15 Before Claims Processed to New Revenue Claims Processed New Revenue Added Expon. (New Revenue Added ) 4,300,000 4,100,000 3,900,000 3,700,000 3,500,000 3,300,000 3,100,000 2,900,000 2,700,000 2,500,000 2,300,000 1/14 2/14 3/14 4/14 5/14 6/14 7/14 8/14 9/14 10/1411/1412/14 1 / 2 / 3 / 4 / 5 /

16 1/14 2/14 3/14 4/14 5/14 6/14 7/14 8/14 9/14 10/14 11/14 12/14 1 / 2 / 3 / 4 / 5 / 6 / 7 / 8 / 9 / 10 / 11 / 12 / After. 4,700,000 4,500,000 4,300,000 4,100,000 3,900,000 3,700,000 3,500,000 3,300,000 3,100,000 2,900,000 2,700,000 2,500,000 2,300,000 Claims Processed to New Revenue Claims Processed New Revenue Added Expon. (New Revenue Added )

17 DSO Before Unbilled DSO Unfinished DSO Billed DSO Total DSO

18 1/14 2/14 3/14 4/14 5/14 6/14 7/14 8/14 9/14 10/14 11/14 12/14 1 / 2 / 3 / 4 / 5 / 6 / 7 / 8 / 9 / 10 / 11 / 12 / DSO After. Unbilled DSO Unfinished DSO Billed DSO Total DSO

19 Bad Debt Before. Bad Debt Target 8.00% 7.00% 6.00% 5.00% 4.00% 3.00% 2.00% 1.00% 0.00%

20 1/14 2/14 3/14 4/14 5/14 6/14 7/14 8/14 9/14 10/14 11/14 12/14 1 / 2 / 3 / 4 / 5 / 6 / 7 / 8 / 9 / 10 / 11 / 12 / Bad Debt After. Bad Debt Target 8.00% 7.00% 6.00% 5.00% 4.00% 3.00% 2.00% 1.00% 0.00%

21 1/14 2/14 3/14 4/14 5/14 6/14 7/14 8/14 9/14 10/14 11/14 12/14 1 / 2 / 3 / 4 / 5 / Accounts Receivable Before A/R Trend A/R Trend 7,000,000 6,500,000 6,000,000 5,500,000 5,000,000 4,500,000 4,000,000 3,500,000

22 Accounts Receivable After. A/R Trend A/R Trend 7,000,000 6,500,000 6,000,000 5,500,000 5,000,000 4,500,000 4,000,000 3,500,000 1/14 3/14 5/14 7/14 9/14 11/14 1 / 3 / 5 / 7 / 9 / 11 /

23 1/14 2/14 3/14 4/14 5/14 6/14 7/14 8/14 9/14 10/14 11/14 12/14 1 / 2 / 3 / 4 / 5 / Net Revenue to Accounts Receivable Comparison Before. Net Revenue A/R Trend 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0

24 Net Revenue to Accounts Receivable Comparison After. Net Revenue A/R Trend 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000, /14 3/14 5/14 7/14 9/14 11/14 1 / 3 / 5 / 7 / 9 / 11 /

25 Cash Collection Ratio Before. Cash Collection Ratio % % 95.00% 90.00% 85.00% 80.00% 75.00% 70.00%

26 1/14 2/14 3/14 4/14 5/14 6/14 7/14 8/14 9/14 10/14 11/14 12/14 1 / 2 / 3 / 4 / 5 / 6 / 7 / 8 / 9 / 10 / 11 / 12 / Cash Collection Ratio After. Cash Collection Ratio % % 95.00% 90.00% 85.00% 80.00% 75.00% 70.00%

27 1/14 2/14 3/14 4/14 5/14 6/14 7/14 8/14 9/14 10/14 11/14 12/14 1 / 2 / 3 / 4 / 5 / Cash Collection Before. Cash Collection Target 3,800,000 3,600,000 3,400,000 3,200,000 3,000,000 2,800,000 2,600,000 2,400,000 2,200,000 2,000,000

28 Cash Collection After. Cash Collection Target 4,200,000 4,000,000 3,800,000 3,600,000 3,400,000 3,200,000 3,000,000 2,800,000 2,600,000 2,400,000 2,200,000 2,000,000 1/14 3/14 5/14 7/14 9/14 11/14 1 / 3 / 5 / 7 / 9 / 11 /

29 1/14 2/14 3/14 4/14 5/14 6/14 7/14 8/14 9/14 10/14 11/14 12/14 1 / 2 / 3 / 4 / 5 / Billed Comparison to A/R Before. Billed A/R Trend 7,800,000 6,800,000 5,800,000 4,800,000 3,800,000 2,800,000 1,800,000

30 Billed Comparison to A/R After. Billed A/R Trend 7,800,000 6,800,000 5,800,000 4,800,000 3,800,000 2,800,000 1,800,000 1/14 3/14 5/14 7/14 9/14 11/14 1 / 3 / 5 / 7 / 9 / 11 /

31 Initial Assessment Findings/Recommendations The current denial management system and process is a very manual, labor intense process. A review of the first quarter 2014 claims resulted in approximately $3.9M claim denials Conduct a thorough denials assessment in order to accurately target and remediate loss of significant revenue due to denials Track and regularly report denials, recoveries and fatal write-offs by reason, by individual payer and by dollar amount to monitor effectiveness of process Unbilled revenue is approximately $3.2M and Un-Finished revenue is approximately $.25M, this represents 38% of total accounts receivable of $9.2M Develop a comprehensive plan that will focus on the Unbilled and unfinished revenue due Create effective TO DO work lists that identify accounts requiring follow up based on age and payer Track and regularly report open AR by individual payer, dollar amount, staff and account type to monitor effectiveness of processes and staff productivity

32 General Findings/Recommendations There is a lack of effective communication between Revenue Cycle, the branches and other areas within New England Life Care, while following up or researching patient information Develop a comprehensive communication plan for communication between NELC Revenue Cycle and the Branches to include weekly or biweekly meetings along with written updates Follow up needs to be focused to address issues with Accounts Receivable aging A comprehensive plan needs to be developed for the accounts aged > 90 days which represents approximately $2.1M (37%) Reports for monitoring productivity is nonexistent, which results in no accountability or sense of urgency among staff Revise and implement new key policies and procedures for the Revenue Cycle to include productivity standards Agreement on benchmarks and sanctions for non-adherence

33 General Findings/Recommendations The current Revenue Cycle technologies (CPR+) utilized by NELC creates inherent efficiencies, resulting in an extended claim adjudication cycle and potential lost revenue Conduct a work flow process mapping exercise with a CPR+ expert to identify prioritized areas where CPR+ system and Pulse can be improved. Identify areas of accountability and gaps Develop an effective Service Level Agreement (SLA) with IT in order to create agreed upon expectations for responses to support issues There is a lack of effective training among all areas of the Revenue Cycle that results in a non-standard orientation and training process Implement ongoing training and orientation program with appropriate documentation and manuals for staff to keep current on insurance carrier requirements, such as precertification, prior authorization, billing or other changes

34 Findings by Revenue Cycle Area Information Technology Feature Used or Under-Utilized ROI Electronic Billing Under-Utilized Increase efficiency of staff Decrease work arounds Decrease hand offs Electronic Corrected Claim Not used Increase efficiency of staff Decrease work arounds Decrease hand offs Notes Manager Under-Utilized Metric tracking Batch Functions Not used Write-offs Assign Status Resubmit Payer set up & options Under-Utilized Increase efficiency of staff Decrease work arounds Decrease hand offs Lot Tracking Not used Increase efficiency of billing staff Decrease work arounds Decrease hand offs

35 Findings by Revenue Cycle Area Information Technology (Continued) Feature Used or Under-Utilized ROI Authorization Tracking Not used Increase efficiency of staff Decrease work arounds Decrease hand offs SMN/CMN Tracking Under-Utilized Increase efficiency of staff Billing Review Queue Not used Increase efficiency of staff Decrease work arounds Decrease hand offs Recurring Rental Manager Under-Utilized Automatic review and billing for rental equipment Increase efficiency of staff Electronic Billing Under-Utilized Increase efficiency of staff Decrease work arounds Decrease hand offs

36 General Findings/Recommendations Recommendation Dependencies ROI $ ROI Consider making change to the cash posting process. Separate the denied claims (D) from the secondary billing claims (S). The EOB s should be sorted high to low by amount. The auditor should focus his/her review of the higher dollar claims first Timing of Key Bank implementation of the EOB scanning function of Key Bank Improved overall revenue stream and cash position Reduced denials Reduce hand offs and duplication $ Develop a comprehensive communication plan for communication between NELC Revenue Cycle and the Branches to include weekly or bi-weekly meetings along with written updates Review the process, revise the policy and provide education to staff regarding the Acknowledgement of Financial Responsibility (AFR) process Buy-in from NELC leadership Availability of a process owner Improve staff engagement Improve communication Decreased staff frustration Eliminates duplicative and unnecessary work steps Decreased staff frustration $ $

37 General Findings/Recommendations Recommendation Dependencies ROI $ ROI Availability of process $ owner Implement ongoing training and orientation program with appropriate documentation and manuals for staff to keep current on insurance carrier requirements, such as precertification, prior authorization, billing or other changes Reduce denials Improve staff engagement Improve communication Reduce potential for inconsistent workplace practices Improve staff efficiency Revise and implement new key policies and procedures for the Revenue Cycle to include productivity standards Review the process and revise the current policy and provide education to staff for processing of the Advanced Beneficiary Notice (ABN) process and Free Care processes Agreement on benchmarks and sanctions for nonadherence Comprehensive Denials Management Analysis Improve staff efficiency Improve staff morale Reduce potential for inconsistent workplace practices Reduce non-billable charges decrease denials Increase cash collections $ $

38 General Findings/Recommendations Recommendation Dependencies ROI $ ROI Availability of process $ owner Review the current Part D process with all appropriate departments and simplify as much as possible, i.e., create a cheat sheet Reduce potential for inconsistent workplace practices Improve staff efficiency Decreased staff frustration Develop a plan to improve the labor intense process for attaching invoices to Mass Health claims Availability of Materials Dept., IT staff and others to assist Reduce potential for inconsistent workplace practices Improve staff efficiency $ Update and standardize job descriptions that are consistent among positions that clearly align with relevant and position-specific performance metrics Availability of a process owner Improve staff efficiency Improve staff morale Reduce potential for inconsistent workplace practices Reduced denials Reduce hand offs and duplication Improve overall revenue stream and cash position $

39 Moderate Cost/Low Time to Implement Recommendation Dependencies ROI $ ROI System capacity to $$ support ANSI codes and standardization of processes Process owner Conduct a thorough denials assessment in order to accurately target and remediate loss of significant revenue due to denials: Form Denial Committee Implement Denial Tracking software to assist with accurate and timely denial identification Dedicate staff to work denials, appeals and underpayments to focus specifically on these select accounts Develop specific transaction codes to facilitate root-cause analysis and improve accountability Create new policies and procedures to track and resolve denials Implement and monitor process Track and regularly report denials, recoveries and fatal write-offs by reason, by individual payer and by dollar amount to monitor effectiveness of process Train staff on standardized collection processes Decrease denials Improve overall revenue position Reduce hand offs and duplication Improve overall revenue stream and cash position Decrease bad debt

40 Moderate Cost/Low Time to Implement Recommendation Dependencies ROI $ ROI System capacity and $$ standardization of processes Implement and monitor registration and invoice entry process and review all policies and procedures to ensure that all data elements required to bill are captured and are submitted timely. Include policy guidelines that address missing, inaccurate or incomplete data elements Research all NELC payers to determine the level of online access that is available for authorization, verification, benefits and billing. Possible implementation of Bolt-On technology with Emdeon, Avality or Navinet Create Director of Revenue Cycle position to oversee Revenue Cycle operations and revise the organization/reporting structure. Fill the vacant Billing/Collections Manager position Use of IT resources or outside resources Buy-in from NELC leadership Improved charge capture Reduced denials Reduce hand offs and duplicative work Improve overall revenue stream and cash position Eliminates duplicative and unnecessary work steps Increase staff efficiency Reduce denials Improve staff engagement Improve communication Reduce potential for inconsistent workplace practices Improve staff efficiency

41 Moderate Cost/Moderate Time to Implement Recommendation Dependencies ROI $ ROI Availability of CPR+ $$ expert Conduct a work flow process mapping exercise with a CPR+ expert to identify prioritized areas where CPR+ system and Pulse can be improved. Identify areas of accountability and gaps Ensures system optimization Eliminates duplicative and unnecessary work steps Quantifies gap areas requiring remediation and improvement Implement and monitor policy regarding bill production completed less than 5 days after bill is Ready To Bill. Specify exceptions and protocols Implement technology enabler system, if necessary Review current system processes Track and review errors daily and report to Director Create and maintain daily management reports Agreement on accountability, exceptions and protocols Improved claim information resulting in fewer denials Clear delineation of roles and accountability Decreased staff frustration Improve overall revenue stream and cash position $$

42 Moderate Cost/Moderate Time to Implement Recommendation Dependencies ROI $ ROI Availability and buy-in $$ of Revenue Cycle Management Team Develop a comprehensive plan to tackle the Unbilled and unfinished revenue due to the more than unresolved 5,000 tickets Create effective TO DO work lists that identify accounts requiring follow up based on age and payer Track and regularly report open AR by individual payer, dollar amount, staff and account type to monitor effectiveness of processes and staff productivity Review all under-utilized capabilities within CPR+ for A/R follow-up Document and flow chart best practices for insurance follow up Create new policies and procedures to identify proper follow up procedures Train staff on standardized best practice follow up routines and use of enabling technology Monitor employee productivity Improve staff efficiency Improve staff morale Reduce potential for inconsistent workplace practices Reduce bad debt

43 Moderate Cost/Moderate Time to Implement Recommendation Dependencies ROI $ ROI Attrition $$ Buy-in from NELC leadership Combine Intake Specialists from branch office with Insurance Verification team at the corporate office Set clear accountability expectation and provide mandatory leadership development training for managers and supervisors/leads to coincide with implementation of KPIs Process owner with skill set to implement and enforce accountability and provide meaningful Leadership development Improve staff efficiency Improve staff morale Reduce potential for inconsistent workplace practices Improved morale and performance from managers and supervisors/leads Overall improvement in department operations Improved financial position $$

44 Keys for Success/Next Steps Approve Recommendations Assign dedicated Project Manager to coordinate process improvements Develop an overall integrated master project plan which incorporates operational process improvements with technology changes Ensure Gaps/Needs are sequenced and timed appropriately Ensue dates and milestones are identified Clearly define functionality expectations Develop detailed process workflows Identify and allocate resources required for implementation efforts Begin implementation efforts

45 Denials Top Denial Reasons -- First Quarter 2014 Amount % Previously paid 434, % Claim denied charges 323, % Duplicate claim/service 251,757.04% Precertification/authorization/notification absent 147, % Claim/service lacks information which is needed for adjudication 129, % The time limit for filing has expired 82, % Expenses incurred after coverage terminated 78, % Additional information is required to process claim 43,9 2.58% The diagnosis is inconsistent with the patient's age 22, % Total Top Denials 1,674, % Total First Quarter 2014 Denials 3,900,000

46 December 2014 Billed Accounts Receivable by Age Group 45% 40% 35% 41% 37% 30% 25% 20% % 13% 10% 9% 5% 0%

47 December 2014 Accounts Receivable 7,000,000 6,000,000 5,802,739 5,000,000 4,000,000 3,197,043 3,000,000 2,000,000 1,000, ,936 0 "Billed" AR "Un - Billed" AR "Un - Finished" AR

48 Proposed Revenue Cycle Benchmarks

49 Health IT Value Steps This Presentation will demonstrate the various stages of STEPS in the following manner S Satisfaction Leadership and staff adoption of revenue cycle process improvements has enhanced New England Life Care s financial situation T Treatment Ability to effectively manage revenue cycle processes E Electronic Information/Data Revenue cycle model that is built on an advanced technological infrastructure that supports connectivity, data aggregation, data analytics and robust reporting P Patient Engagement/Population Management Patient engagement strategies are a primary focus in the New England Life Care revenue cycle model for success S Savings Standardization of practices

50 Summary Michael G. Souza President & CEO New England Life Care (781) William E O Brien Senior Revenue Cycle Consultant Culbert Healthcare Solutions (207) wobrien@culberthealth.com