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Presented by Paola Turchi, MSHCA, CHFP, CPC

When to Outsource Revenue Cycle Operations

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About Paola Turchi, MSHCA, CHFP, CPC

Paola has a degree in Business Administration and Master’s in Healthcare Administration, with more than 15 years of experience in Revenue Cycle. She is a Certified Professional Coder through the AAPC, a Certified Healthcare Financial Professional through HFMA and is currently pursuing a board certification through the American College of Medical Practice Executives at MGMA. During her tenure at Allscripts, Paola has provided consulting services to over 250 practices ranging from one-doctor specialty practices to large 1200 physicians IDNs. 2017

Revenue Cycle Company of the Year Frost & Sullivan

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1. Evaluate revenue cycle management workflow processes and identify key opportunities

2. Review key performance indicators and compare the organization against industry benchmarks

3. Identify the best revenue cycle management partner and maintain a successful and profitable relationship

Learning Objectives

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How to Best Perform an Internal Revenue Cycle Assessment?

Initial Discovery

Workflow

Observations

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Initial Discovery – Engage the Management Team

Describe the process end to end. What are the goals and objectives of the process?

What measures are used to manage the process? Weekly, monthly measures? Trends?

How are these measures used by management? Staff meetings? 1:1s? Communicated to the team?

What are the Key Performance Indicators?

What pains does the process cause? What do people want or desire from the process?

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Initial Discovery – Engage the Staff Members

How does the process start?

What event triggers the process to start?

How does the process get from point A to point B?

How do you know when one part is done?

Where do you spend most of your time, and why?

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Initial Discovery – Engage the Staff Members

Where in the process do you repeat work? How often, and why?

What parts of the process do you deem unnecessary, and why?

When pressed for time, what steps in the process do you skip or work around?

What pains does the process cause? What do people want or desire from the process?

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Scheduling

Demographic Accuracy

Scheduling Template Utilization

Insurance Verification

Outstanding Balance Notification

Pre-Visit

Appointment Reminders

Eligibility & Benefit Verification

Prior-Authorization Management

Mobile Check-In & Collections

Front Desk

Demographic Verification

Real Time Eligibility Verification

Insurance and ID Scanning

TOS Collections

Credit Card On File

Front End Workflow Observations

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Coding

Accurate Documentation

Audit & Compliance

Coding Lag

Training & Feedback

Charge Capture

Hospital Services

Satellite Locations

In-Office Services

Charge Reconciliation

Charge Entry

Charge Interfaces

Automated Edits

Claim Scrubbing

Automated Queues

Coding & Charge Posting Workflow Observations

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Insurance & Patient Billing

Timely Submission

Claim Reconciliation

Claim Scrubbing

Automated Queues

Payment Posting

ERA vs Manual

$0.00 EOB Posting

Auto-Adjustments

Underpayments

Refunds

Automated Queues

Proactive vs Reactive

AP Integration

Credit Card Refunds

Billing & Payment Posting Workflow Observations

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Self Pay Follow Up

Process Automation

Credit Card On-File

Automated Monthly Deductions

Collection Agency

Insurance Follow Up

Automated Queues

Timely Follow up

Insurance Expertise

Specialty Expertise

Denial Management

Denial Rate Trending

Denial Reasons

Automated Alerts

Automated Queues

Follow Up & Denial Mgmt. Workflow Observations

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• Practice Productivity (Location, Specialty, Provider, RVU)

• Staff Productivity (Volume & Quality)

• Insurance Productivity (Contract Adherence, Denial Trending, Days in AR, Aging AR)

• Industry Benchmarking (HFMA, Professional Associations, MGMA)

• Actionable Reporting and Alerts

• Access to Dashboards (Location, Specialty, Provider, Insurance)

• Minimal Data Manipulation

Reporting Capabilities Assessment

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Workflow Observation Tips

Watch users in action

Practice your poker face

Make the users feel comfortable

Prompt users to show you what they are explaining

Show them a few tricks to improve their processes

Don’t change daily workflows during this time

Acknowledge their concerns

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How to Measure the Success of Your Revenue Cycle Operations?

Operational Metrics

AR Metrics

Staffing Metrics

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Indicator Calculation Target

Pre-Registration Rate # Patient Encounters / # Scheduled Patients >95%

Insurance Verification Rate # Verified Encounters / # Scheduled Patients >95%

Service Authorization Rate # Authorized Encounters / # Patients Requiring Authorization >95%

Front Desk Denial Rate # Front Desk Denials / # Total Denials (Registration/Eligibility/Authorization) <2%

Appointment Confirmation Rate # Appointments Confirmed/ # Total Appointments >95%

Time of Service Collection Rate TOS Collections / Total Patient Responsibility to Collect>98 % (Office)

>80% (Balance)

Insurance Card Capture Rate # Total Captured Cards / # Total Insured Patients Seen >98%

Operational Metrics

Front Desk

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Coding, Charge Entry and Billing

Operational Metrics

Indicator Calculation Target

Average Day Lag (Charges) # Lag Days / # Total Claims (Coding / Posting / Billing)<24 Hours (Office)

<72 Hours (Off-Site)

Missing Charge Rate # Missing Encounters / # Total Encounters 0%

Clean Claim Ratio # Failed Claims / # Total Submitted Claims >98%

Claims Pending on Edit # Pended Claims / # Total Claims (Held Claims) <1%

Coding Denial Rate # Coding Denials/ # Total Denials <2%

Charge Entry Denial Rate # Charge Entry Denials / # Total Denials <2%

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Payment Entry and Follow Up

Operational Metrics

Indicator Calculation Target

Average Day Lag (Payments) # Lag Days / # Total Paid Claims (Payment Entry) <24 Hours

Payment Entry Error Rate # Payment Entry Errors/ # Total Posted Entries <2%

Timely Account Follow Up(Next Follow Up Date – Initial Follow Up Date) # Days / # Total Worked Outstanding Claims

<30 Days

Timely Denial Management (Submission Date – Posting Date) # Days / # Total Denials <7 Days

Untimely Denial Follow Up Rate # Untimely Denial Follow Up Denials/ # Total Denials <0%

Patient Inquiry Response Rate # Hours to Respond / # Patient Inquiries <24 Hours

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Indicator Calculation Target

Days in A/R Net (Gross) AR / Average Daily Net (Gross) Charges (Revenue) <35 Days

Gross Collection Rate Payments / Charges (Revenue) *Fee Schedule Mark Up

Net Collection Rate Payments - Refunds/ Charges (Revenue) - Adjustments >92%

AR Over 120 Billed AR Over 120 / Total Billed AR <5%

Payer Mix Charges (Revenue) & Payment Distribution Monitor

Overall Denial Rate (1st Pass) # Claims Denied / # Claims Billed <5%

Appeal Efficiency Rate # Claims Paid After Appeal / # Claims Appealed >75%

Bad Debt as a % of Charges Bad Debt / Gross Charges (Revenue) <1.75%

Credit Balance % Total Credit Balances / Total Billed AR <2%

Accounts Receivable Metrics

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REWORK COSTS AN AVERAGE OF $25.00 PER

CLAIM

25% OF DENIALS ARE NEVER RECOVERED

SUCCESS RATES VARY FROM 55% TO 98%

Understanding the Costs of Denials

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Function Sample Production Measures

Appointment SchedulingWith No Financial Clearance 11-18 Appointments HourWith Financial Clearance 7-11 Appointments/HourSurgery Scheduling 3-4 Appointments/Hour

Insurance Verification 15 Visits/Hour

Benefits Verification 13 Visits/Hour

Referrals 8-13 Authorizations/Hour

Financial Clearance 9-11 Verifications/Hour

Check In With Data Verification & Cashiering 11-14/Hour

Check Out With Scheduling & Cashiering 8-12/Hour

Staffing Metrics – Front Office

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Function Sample Production Measures

CodingE/M Coding 15-20/HourProcedure Coding 6-12/Hour

Charge Entry55-75 Service Lines/Hour20 Charge Corrections/Hour

Claims Edits 20 Claims/Hour

Payment Entry150 Manual Lines/Hour20 Electronic-Posted Rejections Resolved/Hour

Credit Balances 10 Credit Balances Resolved/Hour

Self Pay Follow Up 10-13 Accounts Worked/Hour

Correspondence 13-15 Worked Accounts/Hour

Insurance Follow-Up 7-10 Worked Accounts/Hour

Staffing Metrics – Back Office

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Avoid the “Jack of all Trades” model

Clearly set expectations and monitor productivity to increase accountability

Be extra selectively when hiring new staff members (50% salary cost to replace an employee)

Implement a culture of continuous process improvement

Update training materials to reflect process changes

Celebrate all the WINs

Staffing Considerations

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Partnering with a Reputable Revenue Cycle Company

When to Partner with

a Revenue Cycle

Company?

How to Partner with

a Revenue Cycle

Company?

Maintaining a

Successful Partnership

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When to Partner with a Revenue Cycle Company?Can you track whether your providers are coding accurately?

Are you receiving full reimbursement for services?

Do you have access to rejected claim volumes, reasons, and benchmarks?

Do you have analytics that provide helpful insight into payments, A/R, RVUS, and staff productivity?

Are you confident that your current system is prepared to manage increasing self-pay balances as patient responsibility continues to increase?

Are you prepared to manage changing reimbursement models?

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When to Partner with a Revenue Cycle Company?Do you have lots of manual processes to support your operations?

Is your billing department understaffed?

Is it difficult to retain and/or recruit skilled resources?

Is your AR over 90 days out of control?

Are your days in AR over 60 days?

Are you transferring a lot of patient balances over to the collection agency or adjusting them off as bad debt?

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Top 8 Reasons Why Organizations Partner with a Revenue Cycle Management Company

Reduce Disruption from Industry Changes

Reduce Overhead Costs

Value-Added Strategic Partner with Subject Matter Expertise

Enhanced Business Intelligence

Access to State of the Art Technology

Improve Practice Profitability

Ability to Scale at a Faster Pace

Ability to Concentrate on Delivering Healthcare Services

Increase Patient Satisfaction

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Conduct an operational and

financial assessment and identify opportunities

Contact at least 3 Revenue Cycle Management Companies

Evaluate all services offerings - Make sure you are appropriately comparing different

offerings

Align your needs with the services offerings

Complete a return on investment

Obtain references

How to Partner with a Revenue Cycle Company?Pre-Planning Phase

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Proven resultsUtilize the latest and greatest technology

Follow HIPPA compliant processes

Provide actionable analytics

Are experts in your state and specialty

Have a governance structure in place to appropriately manage your account

How to Partner with a Revenue Cycle Company?Selection Phase

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How to Partner with a Revenue Cycle Company?

Make sure you are appropriately comparing different offerings

Outsource services range from 4% to 13% of net collections

Consider documenting turn around expectations (i.e. billing and posting lags)

Keep an eye on the term of the contract – Lock your % of collections

Clearly understand the termination clauses

Negotiation Phase

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Managing the Change

01Setting Expectations

02Managing the Legacy AR

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How to Partner with a Revenue Cycle Company?Implementation Phase

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Assign a Project Sponsor

Hold your Partner Accountable BUT Own Your Project

Start Building the Partnership – This Project Needs to be a Win-Win for ALL

Be Transparent with the Staff – You Will Need Their Support to be Successful

Managing the Change

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Ramping Up - Setting the “ Right” Expectations

0 -30 Days• 80% Legacy

AR

31 – 60 Days• 70 %

Legacy AR

61 to 90 Days• 40 %

Legacy AR

91 to 120 days• 15 %

Legacy AR

Over 120 Days• <1%

Legacy AR

*Considerations:Payer MixResource Availability

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Managing the Legacy Accounts Receivable

Using Current Resources

• Stay Bonuses• Financial

Targets• Outplacement

Services

Using Temps

• Interviews• Training• Current Labor

Pool

Using 3rd

Party

• Ambulatory vs Acute

• Per Employee Fee vs % of Collections

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Building a Successful Partnership

Define and document policies, procedures, work standards, and business rules

Have a clear understanding of the roles and responsibilities between the two parties

Set measurable milestones and deliverables to meet the strategic and operational goals of the organization

Schedule regular check points to ensure all goals are being met

Develop action plans to address challenges

Nurture a transparent partnership to gain win-win results

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Summary of Recommendations

• Complete an operational assessment, benchmarking your organization’s key performance indicators against industry standards

• Identify opportunities for improvement

• Establish, if not already in place, a continuous process improvement team

• Develop an implementation plan and identify additional key performance indicators if needed

• Make sure that all new processes are patient friendly

• Automate and centralize as many processes as possible to lead a reduction in costs and improved efficiencies

• Don’t go at it alone

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Questions?

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About Revenue Cycle Services

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Thank You

Paola Turchi, MSHCA, CHFP, CPC

949.547.8940 | C

paola.turchi@allscripts.com | www.allscripts.com

Allscripts Revenue Cycle Management Services

2017 Revenue Cycle Company of the Year Frost & Sullivan