Breakthrough Denials Performance: Leveraging Analytics and Optimizing Upfront Success

Transcription

1 Revenue Cycle Solutions Breakthrough s Performance: Leveraging Analytics and Optimizing Upfront Success HFMA Conference February THE ADVISORY BOARD COMPANY ADVISORY.COM The best practices are the ones that work for you. Road Map for Discussion 1 Revenue Cycle Solutions at Advisory Board 2 s Management State of the Union 3 Traits of a Best in Class s Program 4 Case Studies and Next Steps 2016 THE ADVISORY BOARD COMPANY ADVISORY.COM 1

2 About the Speakers For more information, contact: Ben Beadle-Ryby Partner For more information, contact: Joy Houk-Raper Vice President THE ADVISORY BOARD COMPANY ADVISORY.COM 3 Optimizing Revenue Cycle Performance Extensive Expertise and Results 1,700 + Hospitals participating Revenue cycle professionals on staff $3B Documented revenue enhancement Representative Membership CHI St. Luke s Health, Houston, TX The Cleveland Clinic, Cleveland, OH Mayo Clinic, Rochester, MN Memorial Hermann, Houston, TX Mountain States Health Alliance, Johnson City, TN Orlando Regional Medical Center, Orlando, FL Trinity Health, Livonia, MI Universal Health Services, King of Prussia, PA SSM Healthcare, St. Louis, MO Providence Health & Services, Renton, WA Comprehensive & Integrated Capabilities Consulting Performance Technology Research & Insights Financial Leadership Council 2016 THE ADVISORY BOARD COMPANY ADVISORY.COM 4 Deep bench of the industry s most seasoned experts combining Advisory Board research with real-world know-how to drive lasting gains in revenue cycle performance Analytics and workflow tools to improve revenue cycle performance; integrated approach delivers results by combining actionable insights with dedicated advising and extensive implementation resources to maximize contract yield, revenue capture and collections Strategic guidance, best practices and forecasters to address the most critical concerns facing finance and revenue cycle executives and their teams. Special focus on patient access, documentation and coding, business office effectiveness and contract modeling and management. 2

3 Combined Forces Undermining Revenue Cycle Success Shifting Business Models Silos Preventing Cohesion 2-5% Missed net revenue Value-based contracting putting downward pressure on reimbursement Critical to be highly successful in Fee-for-Service models Over $14M annually left on the table for an average 250-bed hospital Reducing Yield Functional disparities make it impossible to pinpoint payment blockages Today s denials require crossfunctional coordination to root cause and resolve or appeal The spending gap doubled between high and low quartiles since 2013 Causing Inefficiency $8M - $16M Incremental cost to collect 2016 THE ADVISORY BOARD COMPANY ADVISORY.COM 5 Cracks in the Foundation Initial s Are Spiking Commercial s Spiking Final Commercial s as a Percentage of Total Final s 50% Recovery is Not Enough 42% 42% 6% CAGR 70% Best possible appeal success rate against commercial denials in Even top-performing organizations wrote off 30% of denials THE ADVISORY BOARD COMPANY ADVISORY.COM 3

4 Components of Strong s Infrastructure No Longer Sufficient Existing s Forums Multiple focus groups have been meeting to review denial detail for years. Investment in Enhanced s Data Expansion of Patient Accounting Systems reports to provide better denials visibility. $ Low Write-Offs Strong appeal overturn rates and historically has kept write-offs to a minimum. Engaged Leadership Leadership understands the importance of shifting focus from denials appeals to denials prevention THE ADVISORY BOARD COMPANY ADVISORY.COM 7 Highlighting Common Challenges for Preventing and Managing s CURRENT CHALLENGES Multiple denials reporting sources (Initial s Spreadsheet, excel reports, EHR reports, vendor reports) Inconsistent terminology and denials definitions Lack of awareness on denials from front line staff upstream in revenue cycle Cross departmental coordination is inefficient or non-existent Limited denial reason grouping capabilities Inability to quickly develop graphs for specific departments and stakeholders Lack of visibility into targets and performance thresholds for specific functions Delayed data feeds only allow for monthly visibility into progress against goals 2016 THE ADVISORY BOARD COMPANY ADVISORY.COM 8 4

5 Defining Initial s and Final Write-offs Onsite discussions surfaced the need to provide organization-wide education on the definitions and nuances of denials. An immediate step is to align key stakeholders by speaking the same language. Final Write-offs: if a service is delivered but not paid, despite any appeals actions taken, then it is considered a final write-off. Measured in net dollars. Initial s: Any initial response from the payer which is not a payment, thus resulting in an appeal or re-work, is an initial denial. This is measured in gross dollars THE ADVISORY BOARD COMPANY ADVISORY.COM 9 Level Set on Terminology Across Organization Current initial denial terminology is confusing and difficult to explain to key stakeholders across the organization, making it hard to interpret data. ABC Current Terminology Specific verbiage developed across the organization for current workflow Recommendation Soft s A denial that needs additional information to be processed Any claim that hasn t been fully processed by the insurance company; something is missing from a billing standpoint Hard s Claim that hasn t been paid More complex and has to do with the contract language definitions must be clear and understood by all stakeholders across the organization We ve never really discussed the terminology, we just understand how each one is defined. Management Team 2016 THE ADVISORY BOARD COMPANY ADVISORY.COM 10 5

6 Cross Departmental Coordination Inefficient Coordination between departments is inefficient due to the varying data sources, numerous manual processes, and methods of communication. Clinical denial is identified in RCA by denials analyst Analyst s Clinical denials team with denial information Clinical s Example Clinic al team sorts into Outlook folder and prints with attachments Printouts are added to Appeals Binder to be worked in order of due date Clinical team s denials analyst, adds notes to RCA and ROC Appeal letter is scanned and added to Outlook folder Clinical team reviews documents, writes appeal letter, prints and sends to insurer Appeal is manually logged in binder and pulled to work appeal s analysts s Clinical team with follow up and questions as needed Appeal approval or denial is mailed back to appropriate denials department with no follow up to the Clinical team EMR work items functionality can eliminate several manual processes and multiple communication forms. Data Sources s containing denials information and documentation Clinical denials team Appeals Binder RCA work queues 3 Manual Processes Printing denials s and documentation Adding hard copies to Appeals Binder Hardy copy handoffs Scanning appeal letters 4 Communication Forms s between analyst and Clinical team, often with no follow up Notes added in RCA and ROC, many times not added to RCA routinely Phone calls between departments THE ADVISORY BOARD COMPANY ADVISORY.COM 11 Write Off Policies and Methods of Prioritization Differ Differing write-off policies and prioritization standards across teams leave room for standardization and clarification s Management Team Write-off amounts Staff: $5,000 Manager: $5,000 - $10,000 Director: $10,000 Government Billing & Follow up Write-off amounts Staff: $2,500 Manager: $2,500 - $5,000 Director: $5,000 Non-Government Billing & Follow up Write-off amounts Staff: $1,000 Lead: $1,000 5,000 Manager: $5,000 - $10,000 Director: $10,000 Prioritization: High dollar amount, referrals, or status date Prioritization: Oldest date of service, high dollar amount Prioritization: Status date over 30 days Key Takeaways 1. Multiple write-off policies and processes 2. No standard work que prioritization process 2016 THE ADVISORY BOARD COMPANY ADVISORY.COM 12 6

7 Need to Shift From Diagnosis to Prevention Diagnose Solve Prevent Percent of Time Spent In Each Area Today 50% 35% 15% Tomorrow 15% 35% 50% Create a More Nimble Organization 2016 THE ADVISORY BOARD COMPANY ADVISORY.COM 13 Common Traits of a Best-In-Class s Program TRANSPARENT DATA GIVES VISIBILITY TO STAKEHOLDERS Apples-to-apples comparison across all technologies and facilities Data is distributed in the right amount of detail to each appropriate level Education is delivered to appropriate leaders and staff so that they understand denials terminology CORE INFRASTRUCTURE SETS THE SCENE FOR SUCCESS Policies and procedures are consistent across all facilities Physician Advisors and s Coordinators have clearly defined roles Responsibilities and communication strategies are clearly defined PROACTIVE, PREVENTATIVE PROCESSES ARE HARD-WIRED Monthly s Committee brings stakeholders to the table to drive action Prescriptive preventative steps have been identified in the event that a denial occurs for a specific reason Leaders are held accountable for denials stemming from their areas Prioritize quick wins, high-dollar trends, and high-frequency issues UNDERPAYMENTS ARE SCRUTINIZED AND APPEALED Key opportunities are identified and evaluated according to priority Batch appeals are used if/when there is a large trend or payer error Improper use of payments and contracts are sent back for re-processing TECHNOLOGY DRIVES WORKFLOWS AND ANALYTICS Unified Data Source: Unite PAS, claims, other data to provide single source for denials and payment variances Flexible Collections Workflow: Workflow to manage accounts with automated work lists and batch processing Extensive custom reporting: Reports to monitor best opportunities and identify payment error trends 2016 THE ADVISORY BOARD COMPANY ADVISORY.COM 14 7

8 Customized s Categorization is Possible and Necessary within Tech Enhanced technologies enable organizations to group denial reason codes into customized categories to drive accountability and denial data understanding across the organization Solution-State Technology-Enabled Categorization through ERA Manager! Impetus for Reason Code Categorization Updates Wrong Payer Authorization Timely Filing & Follow up Coding Government mandates such as the transition from ICD-9 to ICD-10 has impacted trends for certain reason codes Payer guidelines continually change, and ABC denial categorizations must meet updated payer requirements Billing edit needed Reason Code Documentation Medical Necessity Eligibility Example of Current Need: Requested transfer of Code 50 (non-covered services) from Non-Covered category to Medical Necessity category under current model 2016 THE ADVISORY BOARD COMPANY ADVISORY.COM 15 Educating Staff and Creating Facility Level Ownership It is not expected that leaders across an entire organization understand the nuances of denials. The first step is to align key stakeholders by speaking the same language. From there, it is essential key staff are educated at different levels of detail in order to create awareness, accountability and sustainability. s Terminology and Benchmarking 101 Diving Into s Details Hardwiring Culture of Accountability and s Prevention Formalize definitions for denials by category and department for all reason codes: o Patient access, mid-cycle, business office and diagnostic imaging, outpatient surgery, etc. o Technical versus clinical o Initial versus Final o Gross dollars versus Net Provide and define benchmarks for initial denials by area Break down the denials categories to begin delegating responsibility Provide in depth denials education to key constituents responsible for upfront revenue cycle and clinical processes resulting in specific downstream denials Establish preventative actions for every denials cause, and educate upfront revenue cycle and clinical staff on prevention tactics Create manager, director, and senior leadership reports/dashboards to monitor initial denials and appeals success performance Roll out the Advisory Board s accountability tool to help bridge the gap between infrastructure and actions to be taken 2016 THE ADVISORY BOARD COMPANY ADVISORY.COM 16 8

9 Useful Strategies for Optimizing s Analytics and Creating Accountability Key Steps for Leveraging Analytics and Fostering Accountability 1 Define the metrics necessary for each level of the organization Risk Thresholds and Performance Targets to be Built in ERA Manager Sample Graph Built in ERA Manager 2 Develop charts to be housed for all revenue cycle functions in one, central system 3 Identify targets benchmarks to give perspective on performance 4 Develop action plans for upward communication to leadership 2016 THE ADVISORY BOARD COMPANY ADVISORY.COM 17 Executive-Level Metrics Filter Through Enterprise Successful denials management will be tracked through two primary metrics, which must filter down through each department. Chief Financial Officer ABC Initial s as a % of ABC Gross Revenue ABC Final s as a % of ABC Net Revenue Patient Access Leaders Mid-Cycle Leaders PFS Leaders ABC Pre-access denials as % of ABC Gross Revenue ABC Mid-cycle denials as a % of ABC Gross Revenue ABC Back-end denials as a % of ABC Gross Revenue Access Management Team s aligning to job responsibilities as a % of ABC Gross Revenue Mid-Cycle Management Team s aligning to job responsibilities as a % of ABC Gross Revenue PFS Management Team s aligning to job responsibilities as a % of ABC Gross Revenue Supervisors Supervisors Supervisors Code Set A Code Set B Code Set C Code Set D Code Set E Code Set F Code Set G Code Set H Code Set I 2016 THE ADVISORY BOARD COMPANY ADVISORY.COM 18 9

10 Proper Action Plans Essential to Performance It is imperative that there are prescriptive action plans for each type of denial experienced across the organization. High performing organizations have developed action plans for each denial. Category Alignment by Function Custom Prevention Strategy Patient Access Category 1 Category 2 Category 3 Mid-Cycle Category 4 Category 5 Category 6 Business Office Category 7 Category 8 Category 9 Cause causes properly align with the denials category based on ABC-specific processes. Preventative Strategy Prescribed strategy to prevent specific denials will allow staff to effectively manage next steps toward denial resolution. Sample Preventative Action Lists Every department in the organization will have comprehensive list of denials for which they are responsible as well as a preventative strategy for resolution THE ADVISORY BOARD COMPANY ADVISORY.COM 19 Collaboration is Key to s Mitigation s management is not a business office problem; it s a revenue cycle priority that takes collaboration across all revenue cycle functions to be successful. ABC Physician Clinics Works with Pre-Access department to appropriately verify insurance and secure authorizations Works with Business Office to supply additional documentation to support procedure codes ENABLE Access Works with clinics to financially clear a patient Works with Mid-Cycle to validate clinical documentation Supplies business office with documentation to support appeals efforts 4 Separate teams with which to effectively communicate 3 Different Facilities with which to coordinate s Prevention 2 Different Types of s to work, appeal and/or write-off Business Office Works with Mid-Cycle to ensure accurate coding on claim prior to claim submission Works with Pre-Access to update patient data and demographics as needed Coordinates with coding and clinical appeals team to appeal denials in a timely fashion Mid-Cycle Works with Clinics to ensure appropriate documentation to support codes for authorization Works with Pre-Access to supply clinical support for authorization Works with business office to ensure accurate coding on claim prior to claim submission 1 Mission under which all staff at ABC Health System operate 2016 THE ADVISORY BOARD COMPANY ADVISORY.COM 20 10

11 Case Studies: Kalispell and Cancer Treatment Centers of America Kalispell Regional Medical Center 273 beds, Kalispell, MT 1 LEVERAGING HUMAN CAPITAL 2 2 CUSTOMIZING THE TECHNOLOGY HARDWIRING PROCESS SUCCESS Impact Highlights $5.42M Recoveries on underpayments/denials Q1- Q $1.51M Increase in recoveries over 2015 v after creation of underpayment/denials recovery position 3 days Reduction in A/R days 2015 v Cancer Treatment Centers of America Five Facilities located across US Sorting Accounts Prioritizing Accounts Allocating Resources Assigning Activities Impact Highlights $77.62M Dollars recovered from August 2015 through mid-april Number of months during which $77.62M was recovered, averaging $9.13M per month across five facilities 5,759 Number of accounts with recoveries during that time period $1,400,000 $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 Dollars Recovered on Payer Payments After Appeal Dollars Recovered, Aug 1, 2015 to April 19, 2016 $0 Jan Feb Mar Apr May Jun Jul Aug Sep * 2016 THE ADVISORY BOARD COMPANY ADVISORY.COM 21 Staff Ownership, Permanent Results Our Philosophy Pillars of Our Work Optimal revenue cycle performance requires innovative solutions tied directly to business outcomes. We pair state-of-theart technologies with consulting services and collaborative peer networks to drive transformative change at member organizations. Grounded in FLC Research We install best management practices proven in daily practice Hundreds of best practices are surfaced every year in our Financial Leadership Council research program Cohort-Driven Improvement Our experts leverage experience working with over 500 hospitals Cohort members share ideas and best practices, and include a wide range of organizations; AMCs, regional medical centers, small hospitals, for-profits By relying on hospital staff as team leaders who select and execute best practices, Advisory Board consultants leave behind hospital staff better prepared to tackle additional operational problems on their own and to sustain hard-won successes. Deep Bench of Experience Roster of talented professionals with deep expertise across revenue cycle, IT, and physician initiatives Collectively, our team has 750+ years of hospital operator experience Accelerated Results Best-in-Class business intelligence solutions diagnose problems quickly All activities push toward a quantifiable result: financial performance, efficiency and productivity gains, patient financial experience Ongoing support ensures sustained results and continual progress 2016 THE ADVISORY BOARD COMPANY ADVISORY.COM 22 11

12 Your Presentation Team Please do not hesitate to reach out to us with any questions Benjamin Beadle-Ryby Partner, Consulting and Management Joy Houk-Raper Vice President 2445 M Street NW I Washington DC P I F advisory.com THE ADVISORY BOARD COMPANY ADVISORY.COM 12