1 | SOLVING YOUR CORE HOME CARE AND HOSPICE CHALLENGES

Transforming Data Into Results

June 25, 2015

2 | SOLVING YOUR CORE HOME CARE AND HOSPICE CHALLENGES

Presenter

Ron Barrera770-335-8896

rbarrera@simione.com

3 | SOLVING YOUR CORE HOME CARE AND HOSPICE CHALLENGES

What is Accounting?

• Definition of Accounting– The art of recording, classifying, and reporting

financial data for use by owners or leadership in decision making.

• Many leaders struggle with how to use accounting information to bring about financial and operational improvement.

4 | SOLVING YOUR CORE HOME CARE AND HOSPICE CHALLENGES

How Can You

• Get it right and soon

• Make it useful• Get it to decision makers timely• Make active decisions with the data

5 | SOLVING YOUR CORE HOME CARE AND HOSPICE CHALLENGES

Actual Case Study

Month 4 Months Month 4 MonthsEnded % of Ended % of Ended % of Ended % ofApril Revenue April Revenue April Revenue April Revenue

Revenue:Gross Revenue 66,067$ 269,059$ 66,157$ 267,567$

Less: Contractual Allowance (25,633) (103,179) (25,690) (101,334)Total Operating Revenue 40,434$ 100.0% 165,880$ 100.0% 40,467$ 100.0% 166,233$ 100.0%

Expenses:Salaries and Wages 25,078 62.0% 104,248 62.8% 25,965 64.2% 106,687 64.2%Employee Benefits 5,403 13.4% 23,458 14.1% 4,856 12.0% 19,948 12.0%Transportation 1,228 3.0% 4,652 2.8% 1,112 2.7% 4,468 2.7%Medical Supplies 1,797 4.4% 6,547 3.9% 2,503 6.2% 10,227 6.2%Purchased Services 244 0.6% 1,210 0.7% 61 0.2% 308 0.2%Contracted Labor 1,241 3.1% 5,171 3.1% 729 1.8% 2,958 1.8%Rent, Utilities, and Other 4,565 11.3% 17,544 10.6% 4,256 10.5% 17,689 10.6%Bad Debt Expense 365 0.9% 1,452 0.9% 355 0.9% 1,415 0.9%Depreciation and Amortization 672 1.7% 1,385 0.8% 238 0.6% 950 0.6%Interest 290 0.7% 981 0.6% 229 0.6% 915 0.6%

Total Operating Expenses 40,883$ 101.1% 166,646$ 100.5% 40,304$ 99.6% 165,564$ 99.6%

Income (Loss) from Operations (449)$ -1.1% (766)$ -0.5% 163$ 0.4% 669$ 0.4%

Actual Budget

6 | SOLVING YOUR CORE HOME CARE AND HOSPICE CHALLENGES

Actual Case StudyMonth 4 MonthsEnded % of Ended % ofApril Revenue April Revenue National Regional Non-Profit For-Profit

Revenue:Gross Revenue

Medicare 31,251$ 131,529$ Medicaid 889 3,910Commercial Insurance 33,927 133,620

66,067$ 269,059$ Less: Contractual Allowance (25,633) (103,179)

Total Operating Revenue 40,434$ 100.0% 165,880$ 100.0%Direct Expense

Salaries and WagesNursing 10,908$ 46,204$ Physical Therapy 2,777 10,581Speech Therapy 27 107Occupational Therapy 257 1,086Medical Social Worker 795 3,425Home Health Aide 1,272 5,203

Employee Benefits 3,408 14,646Contract Labor 1,241 5,171Transportation 1,228 4,652Medical Supplies 1,797 6,547

Total Direct Expense 23,709$ 97,621$ Gross Margin 16,724$ 41.4% 68,260$ 41.2% 42.0% 42.0% 40.0% 50.0%

Indirect ExpenseSalaries 9,042 22.4% 37,644 22.7% 15.0% 16.0% 15.0% 15.0%Benefits 1,996 4.9% 8,811 5.3% 3.0% 5.0% 4.0% 2.0%Communications 770 1.9% 2,449 1.5% N/A N/A N/A N/AOccupancy 1,475 3.6% 5,636 3.4% 1.6% 1.7% 1.4% 2.0%Information Systems 1,092 2.7% 4,429 2.7% N/A N/A N/A N/AOffice Supplies, Printing, Postage 326 0.8% 1,087 0.7% N/A N/A N/A N/AInsurance 419 1.0% 1,718 1.0% 0.4% 0.3% 0.3% 0.4%Recruitment, Training, Conferences 63 0.2% 362 0.2% N/A N/A N/A N/ACommunity Education, Dues 106 0.3% 440 0.3% N/A N/A N/A N/APurchased Services 244 0.6% 1,210 0.7% 0.6% 2.8% 0.6% 0.9%General Admin 313 0.8% 1,423 0.9% N/A N/A N/A N/ADepreciation 672 1.7% 1,385 0.8% 0.4% 0.6% 0.5% 0.2%Interest 290 0.7% 981 0.6% 0.0% N/A 0.2% 0.2%Bad Debt Expense 365 0.9% 1,452 0.9% 0.6% 0.1% 0.6% 0.5%

Total Operating Expenses 17,174$ 42.5% 69,026$ 41.6% 35.0% 37.0% 36.0% 36.0%

Income (Loss) from Operations (449)$ -1.1% (766)$ -0.5% 7.0% 15.0% 5.0% 19.0%

* Simione Financial Monitor ™

Actual Benchmarks *

7 | SOLVING YOUR CORE HOME CARE AND HOSPICE CHALLENGES

How Does Data Relate to Dollars?

• Volume / RevenueJan Feb Mar Apr Change

AdmissionsMedicare 367 359 343 275 -19.83%

Medicaid 30 28 31 23 -25.81%

Managed Care 990 777 915 860 -6.01%1,387 1,164 1,289 1,158 -10.16%

RevenuesMedicare 32,463$ 31,397$ 36,417$ 31,251$ -14.19%

Medicaid 1,263 1,010 748 889 18.89%

Managed Care 33,268 31,540 34,885 33,927 -2.75%66,994 63,947 72,051 66,067 -8.30%

Admissions by LocationLocation 1 39 46 58 43 -25.86%

Location 2 158 125 171 112 -34.50%

Location 3 210 160 197 167 -15.23%

Location 4 212 193 177 161 -9.04%

Location 5 210 155 186 175 -5.91%

Location 6 338 253 262 240 -8.40%

Location 7 182 202 199 227 14.07%

Location 8 38 30 39 33 -15.38%1,387 1,164 1,289 1,158 -10.16%

8 | SOLVING YOUR CORE HOME CARE AND HOSPICE CHALLENGES

9 | SOLVING YOUR CORE HOME CARE AND HOSPICE CHALLENGES

How Does Data Relate to Dollars?

Active Census/ Possible DC

HOME HEALTH

BRANCH MANAGED CARE MEDICARE MEDI-CAL GRAND TOTALS

Home Health Pending Reported Census

Last Visit >30 Days % Poss DC Pending Reported

CensusLast Visit >30 Days % Poss DC Pending Reported

CensusLast Visit >30 Days % Poss DC Pending Reported

CensusLast Visit >30 Days % Poss DC

Location 1 10 52 2 3.85% 2 36 2 5.56% 0 2 0 0.00% 12 90 4 4.44%

Location 2 21 303 26 8.58% 4 52 3 5.77% 1 4 1 25.00% 26 359 30 8.36%

Location 3 24 254 21 8.27% 7 58 3 5.17% 1 1 0 0.00% 32 313 24 7.67%

Location 4 27 198 16 8.08% 11 102 10 9.80% 1 4 1 25.00% 39 304 27 8.88%

Location 5 0 0 0 0.00% 0 0 0 0.00% 0 0 0 0.00% 0 0 0 0.00%

Location 6 42 348 71 20.40% 5 51 5 9.80% 0 6 1 16.67% 47 405 77 19.01%

Location 7 82 503 107 21.27% 12 105 17 16.19% 1 7 1 14.29% 95 615 125 20.33%

Location 8 36 259 6 2.32% 3 63 0 0.00% 1 4 0 0.00% 40 326 6 1.84%

Location 9 2 43 11 25.58% 6 37 8 21.62% 0 1 1 100.00% 8 81 20 24.69%

TOTALS 244 1960 260 13.27% 50 504 48 9.52% 5 29 5 17.24% 299 2493 313 12.56%

10 | SOLVING YOUR CORE HOME CARE AND HOSPICE CHALLENGES

How Does Data Relate to Dollars?

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YTDTotal Episodes

2015 458 436 444 374 - - - - - - - - 1,712 -15.77%2014 494 416 450 391 405 367 380 383 374 398 343 329 4,730

Recert %2015 52% 57% 56% 49% 0% 0% 0% 0% 0% 0% 0% 0% 54%2014 75% 76% 70% 70% 73% 74% 71% 73% 71% 71% 68% 59% 71%

LUPA %2015 23.58% 19.72% 17.79% 8.82% 17.48%2014 19.84% 22.12% 23.33% 20.72% 21.23% 21.80% 22.37% 20.63% 26.20% 17.09% 25.95% 24.62% 22.16%

Avg Case Mix2015 0.8281 0.8550 0.8530 0.7164 0.8131 2014 0.8763 0.8772 0.8760 0.8588 0.8474 0.8525 0.8421 0.8591 0.8550 0.8584 0.8562 0.8597 0.8599

Visits 2015

SN 2,439 2,337 2,659 2,317 - - - - - - - - 9,752 PT 783 983 1,073 909 - - - - - - - - 3,748 ST 8 7 11 7 - - - - - - - - 33 OT 118 167 192 209 - - - - - - - - 686 MSW 89 76 95 73 - - - - - - - - 333 Aide 439 455 484 487 - - - - - - - - 1,865

3,876 4,025 4,514 4,002 - - - - - - - - 16,417 -11.34%

Visits per Episode

SN 5.33 5.36 5.99 6.20 - - - - - - - - 5.70 PT 1.71 2.25 2.42 2.43 - - - - - - - - 2.19 ST 0.02 0.02 0.02 0.02 - - - - - - - - 0.02 OT 0.26 0.38 0.43 0.56 - - - - - - - - 0.40 MSW 0.19 0.17 0.21 0.20 - - - - - - - - 0.19 Aide 0.96 1.04 1.09 1.30 - - - - - - - - 1.09

8.46 9.23 10.17 10.70 - - - - - - - - 9.59

11 | SOLVING YOUR CORE HOME CARE AND HOSPICE CHALLENGES

How Does Data Relate to Dollars?

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YTDAdmissions

2015 990 777 915 860 - - - - - - - - 3,542 -6.01%2014 972 932 1,077 893 1,007 1,044 959 1,024 968 1,050 935 903 11,764

Visits 2015

SN 8,309 7,718 8,004 7,846 - - - - - - - - 31,877 PT 2,597 2,440 2,719 2,639 - - - - - - - - 10,395 ST 33 36 46 30 - - - - - - - - 145 OT 271 293 341 302 - - - - - - - - 1,207 MSW 184 143 186 192 - - - - - - - - 705 Aide 579 676 752 771 - - - - - - - - 2,778

11,973 11,306 12,048 11,780 - - - - - - - - 47,107 -2.22%

Visits per Admission

SN 8.39 9.93 8.75 9.12 - - - - - - - - 9.00 PT 2.62 3.14 2.97 3.07 - - - - - - - - 2.93 ST 0.03 0.05 0.05 0.03 - - - - - - - - 0.04 OT 0.27 0.38 0.37 0.35 - - - - - - - - 0.34 MSW 0.19 0.18 0.20 0.22 - - - - - - - - 0.20 Aide 0.58 0.87 0.82 0.90 - - - - - - - - 0.78

12.09 14.55 13.17 13.70 - - - - - - - - 13.30

Visits 2014

11,460 10,608 11,202 10,692 10,649 11,542 11,655 11,607 12,586 13,330 11,783 12,230 139,344

Visits per Admission

Total 11.79 11.38 10.40 11.97 10.57 11.06 12.15 11.33 13.00 12.70 12.60 13.54 11.84

12 | SOLVING YOUR CORE HOME CARE AND HOSPICE CHALLENGES

How Does Data Relate to Dollars?

• Direct Expense

• Factors affecting productivity Length of Stay Cases per clinician Time Available to visit Software / Hardware Issues Duplication of paperwork

15-Jan 31-Jan 15-Feb Feb 28th 15-Mar 31-Mar 15-Apr 30-Apr 15-May 1st Qtr Goal

2nd Qtr Goal

3rd Qtr Goal

4th Qtr Goal

RN3.04 3.17 3.07 3.20 3.10 3.14 3.27 3.17 3.26 3.20 3.73 4.00 4.20

LPN5.60 5.83 5.87 5.83 5.56 5.39 5.55 5.49 5.58 6.00 6.00 6.00 6.00

PTA3.57 3.73 3.48 3.75 3.65 3.86 3.77 3.76 3.87 3.90 4.00 4.20 4.50

PTA4.58 4.44 4.85 4.87 4.57 4.53 4.46 4.46 4.42 4.90 5.00 5.50 6.00

OT3.34 3.93 3.65 3.86 3.71 3.69 3.49 3.65 3.41 3.90 4.00 4.20 4.50

MSW3.22 2.92 3.08 2.61 2.62 2.49 2.61 2.94 2.82 3.00 3.00 3.00 3.00

Unweighted Productivity

13 | SOLVING YOUR CORE HOME CARE AND HOSPICE CHALLENGES

Get Information to Decision Makers

• Financial statements only sent to top executives aren’t helping your organization

• Many organizations do not provide department financial information to line operating managers

• Providing line managers with a financial statement– Do not know what they have– Do not know what to do with it– Do not know how to use to manage real change

14 | SOLVING YOUR CORE HOME CARE AND HOSPICE CHALLENGES

Get Information to Decision Makers

– Educate yourself on operations– Explain which revenue or expense drivers they

have control over– Solicit their input and advise them on how to

effect change– Provide them with key indicator reports that allow

them to effect change

15 | SOLVING YOUR CORE HOME CARE AND HOSPICE CHALLENGES

Key Clinical & Financial Indicators

Revenue

• Medicare• Number of start and

ending episodes• LUPAs• Case Mix Weight• Visits per Episode by

discipline• Days to RAP & Final• Unlocked OASIS• Outstanding F2F or

orders• Managed Care

• Admissions• Visits per episode by

discipline• Medicaid

• Admissions• Visits per patient by

discipline

Gross Margin

• Gross margin percentage• Salaries

• Visits per episode by discipline

• Direct cost per visit• Productivity by discipline

(un-weighted)• Days available to visit• Number of patients per

case manager• Patients per team• Average Length of Stay

• Mileage or Transportation• Average miles per visit

• Medical supply• Cost per patient or day• Number of supplies

ordered off formulary

Indirect Expense

• Indirect expense percentage• Administrative salaries

• Clinical Supervisors per team

• Clinical support per team• Intake staff

• Referrals per day• Authorizations per day

• Revenue Cycle• Billing & collection

FTEs based on revenue billed by payer

• Unbilled by payer• Cash collections by

payer• DSO by payer• Denials by payer

• Rent, utilities, office supplies, etc.

16 | SOLVING YOUR CORE HOME CARE AND HOSPICE CHALLENGES

What Do You Measure

17 | SOLVING YOUR CORE HOME CARE AND HOSPICE CHALLENGES

What Do You Measure

• KISS Method• Most critical need• Use daily or weekly KPI reports

– Caution ---- Death by Reports– Monitor no more than 5 indicators

• Meet regularly with managers and staff to keep it at the top of everyone’s mind – Weekly – Monthly – Quarterly

• Consider having weekly “Huddle Meetings” to focus on major initiatives– 30 minutes maximum– Have the right people attending– Solutions based agenda

18 | SOLVING YOUR CORE HOME CARE AND HOSPICE CHALLENGES

Daily Monitoring Example

Admissions Avg/dayTot

Referrals Avg/dayMCR

Admissions Avg/day # of days Target Variance3/1 - 3/1 9 9 0 0 0 0 1 10 (1)3/1 - 3/2 21 11 18 9 8 4 2 20 1 3/1 - 3/3 42 14 32 11 17 6 3 30 12 3/1 - 3/4 52 13 52 13 27 7 4 40 12 3/1 - 3/5 66 13 72 14 41 8 5 50 16 3/1 - 3/6 79 13 113 19 73 12 6 60 19 3/1 - 3/7 90 13 114 16 74 11 7 70 20 3/1 - 3/8 101 13 118 15 78 10 8 81 20 3/1 - 3/9 122 14 133 15 91 10 9 91 31 3/1 - 3/10 136 14 143 14 97 10 10 101 35 3/1 - 3/11 149 14 158 14 108 10 11 111 38 3/1 - 3/12 156 13 177 15 122 10 12 121 35 3/1 - 3/13 176 14 213 16 145 11 13 131 45 3/1 - 3/14 188 13 213 15 145 10 14 141 47 3/1 - 3/15 199 13 213 14 145 10 15 151 48 3/1 - 3/16 211 13 230 14 153 10 16 161 50 3/1 - 3/17 223 13 244 14 161 9 17 171 52 3/1 - 3/18 236 13 259 14 173 10 18 181 55 3/1 - 3/19 249 13 279 15 188 10 19 191 58 3/1 - 3/20 264 13 299 15 199 10 20 201 63 3/1 - 3/21 273 13 303 14 201 10 21 211 62 3/1 - 3/22 280 13 303 14 201 9 22 221 59

19 | SOLVING YOUR CORE HOME CARE AND HOSPICE CHALLENGES

Weekly KPI ExampleMetric Source 5/5/2015 5/12/2015 5/19/2015 5/26/2015 6/2/2015 6/9/2015

Unsigned OrdersOutstanding Document

Report7,676 7,496 5,467 6,878 4,609 4,263

Home HealthJul-14 351 347 339 326 316 289 Aug-14 387 374 366 348 341 321 Sep-14 398 370 356 343 336 319 Oct-14 415 407 387 375 363 342 Nov-14 394 381 362 345 336 319 Dec-14 473 459 431 404 389 365 Jan-15 458 425 411 388 379 360 Feb-15 576 518 488 436 411 376 Mar-15 890 750 662 565 533 487 Apr-15 1,636 1,443 1,095 885 749 669 May-15 215 654 988 1,365 1,408 1,112 Jun-15 77 674

Unlocked Oasis Numbers >6 Days

Unlocked Oasis663 381 467 722 540 578

Location 1 22 18 15 16 16 5Location 2 83 34 47 79 41 103Location 3 73 43 60 104 69 81Location 4 128 78 100 154 139 152Location 5 1 1 1 1 1 1Location 6 93 54 64 103 69 57Location 7 142 82 106 141 101 99Location 8 96 63 60 101 94 63Location 9 25 8 14 23 10 17

Census Report Reported CensusLocation 1 78Location 2 303Location 3 342Location 4 286Location 5 0Location 6 397Location 7 573Location 8 343Location 9 75

20 | SOLVING YOUR CORE HOME CARE AND HOSPICE CHALLENGESPROPERTY OF SIMIONE HEALTHCARE

CONSULTANTS 20

Simione™ Healthcare Consultants provides solutions for your core homecare and hospice challenges – organizational, financial, sales & marketing,technology, and mergers & acquisitions. Over 1000 organizations use ourpractical insight and tools to reduce costs, mitigate risk and improveefficiencies to steward the way they conduct business.

Ron Barrera, Director Financial Consulting4130 Whitney AvenueHamden, CT 06518

800.949.0388

rbarrera@simione.comwww.simione.com

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