adopting a proactive revenue cycle model

Adopting a Proactive Revenue Cycle Model

Paola Turchi, MSHCA, FHFMA, FACMPE, CPCSr. Vice President of Client SuccessGlobal Healthcare ResourceAustin, TX

Presenter reports no conflicts of interest at the time of presentation.

• Solve issues inherent to reactive revenue cycle models

• Produce pre-visit, proactive revenue cycle processes

• Report metrics and key performance indicators to measure success

Learning Objectives

- 3 -©2021 MGMA. All rights reserved.

Paola has a degree in Business Administration and Master’s in Healthcare Administration, with more than 20 years of experience in revenue cycle management. She is a Certified Professional Coder through AAPC, a Fellow Healthcare Financial Professional through HFMA and a Fellow Certified Medical Practice Executive with the American College of Medical Practice Executives through MGMA. She has a green belt Six Sigma Certificate from the University of California Irvine, and a Change Leadership Certificate from Cornell University. For the past several years, she has provided consulting services to more than 250 practices ranging from one-doctor specialty practices to large 1,200 physicians IDNs.

Paola’s expertise is in performing accounts receivable audits to identify and develop process improvement initiatives to streamline workflows and increase revenue, leading practice management (PM) implementations and conversions, and mentoring revenue cycle professionals. She also engages with organizations to develop performance metrics to assess internal trends and benchmark them against professional associations. She has presented at HFMA regional and MGMA national conferences on the topics of revenue cycle and managing self-pay collections.


About Paola Turchi, MSHCA, FHFMA, FACMPE, CPC

https://www.linkedin.com/in/paola-turchi-mshca-fhfma-facmpe-cpc-4836727/

https://www.linkedin.com/in/paola-turchi-mshca-fhfma-facmpe-cpc-4836727/

Which of the following best represent your organization?1. 1 to 25 Physicians Medical Practice

2. 26 to 50 Physicians Medical Practice

3. 51+ Physicians Medical Practice

4. Hospital or Ambulatory Surgery Center

5. Management Services Organization

6. Revenue Cycle Management Company

7. Other

Survey Question # 1


Which of the following best represent your role in your organization?1. Medical Provider

2. C – Level Executive

3. Vice President or Director

4. Manager or Supervisor

5. Hands-On Contributor

6. Other

Survey Question # 2


Poll Key = XHKVW


What have we SURVIVED?

• 55% decrease in revenue • 60% decrease in patient volume• 61% decrease in compensation• 50% practices furloughed staff• 30% practices laid off staff• …


Healthcare Leaders ARE Resilient

- -©2021 MGMA. All rights reserved.

Top two challenges inherent to reactive revenue cycle models

Claim denials

1Patient responsibility

2


Revenue cycle challenge #1: Denials … Denials … Denials

https://www.changehealthcare.com/insights/denials-index



Revenue cycle challenge #1: Denials by Region




Revenue cycle challenge #1: Denial Reasons




Revenue cycle challenge #1: Denial Sources



of claims submitted for the first time are denied or rejected

30% of denials are never worked due to lack of time of knowledge

60%of denials are preventable

90%

How does this challenge affect YOUR practice?

of denied claims can be overturned

70%It costs around $25.00 to appeal a claim

$25

Looking at the numbers

Scenario I Monthly

Estimated Denied Revenue (7) $90,057.60(3*4*5)

Recovered Reimbursement (8) $63,040.32(2*4*6)

Lost Revenue (9) $27,017.28(7-8)

Estimated Cost Impact (10) $24,000.00(1*6)

Estimated Net Denial Impact(Revenue Loss)

$51,017.28(9+10)


(5) Denial Rate (6) Denied Claims

16% 960

(5) Denial Rate (6) Denied Claims

6% 360

(1) Cost/Appeal

$25.00

(2) Success Rate

70%

(3) Avg Claims/Month

6000

(4) Revenue/Claim

$93.81

Scenario II Monthly

Estimated Denied Revenue (7) $33,772.60(3*4*5)

Recovered Reimbursement (8) $23,640.12(2*4*6)

Lost Revenue (9) $10,132.48

Estimated Cost Impact (10) $9,000.00(1*6)

Estimated Net Denial Impact(Revenue Loss)

$19,132.48(9+10)

$31,885.80

Revenue cycle challenge #2: Patient Responsibility


https://www.kff.org/report-section/ehbs-2020-summary-of-findings/

https://www.kff.org/report-section/ehbs-2020-summary-of-findings/

The average deductible amount among all covered workers was $1,364 in 2020, up from $646 in 2010

Average Deductible Increases

26% of covered workers are in a plan with a deductible of at least $2,000 for single coverage

111% Increase

$646

$1,364

2010 2020




We are seeing more billing to go to collections and/or written off

70%

18%

82%

30%

N = 224


We are seeing longer time frames to collect payment in full

https://www.hfma.org/content/dam/hfma/Documents/PDFs/CareCredit-contentpillar-covid-consumerism-strategies.pdf

Somewhat + Very much so


Not at all

Not at all

19%

81%

We are finding it more difficult to collect from patients


Not at all

https://www.hfma.org/content/dam/hfma/Documents/PDFs/CareCredit-contentpillar-covid-consumerism-strategies.pdf

(1) InstaMed Trends in Healthcare Payments Ninth Annual Report: 2018(2) Becker’s Hospital Review -Kylie Kaczor 09/05/18

(3) The Association of Credit and Collection Professionals, Collector Magazine, February 2015

of patients would consider switching providers for a better healthcare payment experience (1)

56%of practices’ income comes directly from patients (2)

30% Collecting from patients could cost up to FOUR times more than collecting from payers (3)

4X

How does this challenge affect YOUR practice?

- -©2021 MGMA. All rights reserved.

Establishing a proactive revenue cycle model

Identify your current KPIs

1

Identify your opportunities

2Improve front office processes

3Improve business office processes

4

Measure success

5Create a loop of continuous feedback

6

Establish a PROACTIVE revenue cycle


Proactive Model

Pre-Visit

Time of Service

Account Resolution

Pre-Visit

Time of Service

Account Resolution

Reactive Model

Benefits of a PROACTIVE revenue cycle


Decrease write-offs

& bad debt

Decrease denials

Decrease days in AR

Decrease operational

costs

Increase employee

satisfaction

Increase patient

satisfaction

Increase revenue

Increase physician

satisfaction

Step 1: Identify your current KPIs


Days in AR*: Average number of days it takes a practice to collect

31 AR over 120*:Percentage of AR that is greater than 120 days old

10% Adjusted FFS collection percent (NCR)*:Percentage of total potential reimbursement collected out of the total allowed amount

98% Denial rate: Percentage of claims denied by the payers

5%

*Data Dive – Cost and Revenue Survey 2021 Report Based on 2020 Data – Better Performing Practices for Multispecialty

Days in AR =Total payments - credits / Avg daily gross charge amount (Total gross charges/365 days)

AR over 120=Total AR over 120 / Total AR

NCR = Total payments - credits / Total charges -Contractual adjustments

Denial rate = Total # of denied claims / Total # of claims submitted

First Pass Resolution Rate vs. First-Pass Rate


First pass resolution rate (FPRR): Percentage of claims that get paid upon first submission

95%First pass rate: Percentage of claims that do not get rejected by the clearinghouse nor the payer

98%

FPRR = Total # of Claims Paid / Total # of Claims Submitted

First pass rate = Total # of Claims Rejected / Total # of Claims Submitted

Why are your claims being rejected or denied?

Step 2: Identify your opportunities


Demographic errors

Missing authorization

Credentialing

Coding errors

Billing errors

Do you have a denial management tool?1. Of course, we do

2. No, we have not been able to implement one

3. Almost there, we are in the process of getting/implementing one

4. Not applicable

Survey Question # 3


Poll Key = FLBLE

Common Front-Office Opportunities

Step 3: Improve Front Office Processes

- 27 -©2021 MGMA. All rights reserved. Graphic adopted from HFMA

Pre-visit processes check list



Capture demographic information

Check eligibility &

benefits

Obtain prior authorization

Calculate patient out of

pocket expenses

Communicate payment

expectations

Collect pre-payments

Most patients are comfortable with estimates that fall within 10% of the actual cost

How do you calculate your patient estimates?

1. I wish, we do not have the tools to calculate estimates

2. We use a printed cheat-sheet or/and a spreadsheet

3. Our practice management system calculates the estimates

4. We have a third-party application that calculates the estimates

5. Other / Not applicable

Survey Question # 4


Poll Key = OGQXB

How do you determine the allowable amounts?

1. Our contracts are loaded in the system

2. Our system uses historical 835 data

3. 1 & 2

4. We use a standard fee schedule

5. Other / Not applicable

Survey Question # 5


Poll Key = NKAQH

80% of patients were surprised by a medical bill in 202086% of patients want to

know their patient responsibility upfront80% of patients want an

online estimation tool for provider visits

Transparency

71% of patients are confused by medical bills 30% of patients delay bill

payments because they don’t understand their responsibility 11% of patients are

uncertain about what payment method to use

Simplicity

82% of patients want to make their payments in one place75% of patients want to

enroll in eStatements from providers85% of patients prefer an

electronic payment method

Options

What do patients want?

Before the appointment (Time of service) check list



Verify demographic information

Get a copy of the insurance

card

Check eligibility &

benefits

Verify prior authorization

Collect pre-payments Obtain ABNs

Chances of collecting after the patients leave the office drops to 62% (1)

Charge capture and coding processes check list



Code services within 24 hrs.

Follow LCD & NCD

guidelines

Leverage technology: rules engine

Solve any real-time

edits

Reconcile encounters

Provide physician education

Billing processes check list



Leverage technology:

charge capture

Import charges daily

Reconcile encounters

daily

Leverage technology: rules engine

Submit claims & statements

daily

Solve rejections

daily

Insurance follow up check list




queuing system

Address all denied claims

Address all unpaid claims

Check for payment

discrepancies

Prioritize based on

timely filing requirements

& $$

Prioritize based on payment

velocity & $$

Charges = AdjustmentsCharges = PaymentsAllowable ~ Contract

How do you track underpayments?1. We use an automated tool

2. We visually track it

3. We are implementing a process

4. We don’t track contract adherence

5. Not applicable

Survey Question # 6


Poll Key = QVKQR


Audit your contracts at least annually

https://www.mgma.com/data/data-stories/new-years-resolution-optimizing-audits-of-your-m

https://www.mgma.com/data/data-stories/new-years-resolution-optimizing-audits-of-your-m

Automating Processes – RPA & ML


• This is a subfield of artificial intelligence• Studies the ability to improve performance

based on experience• The more data is processed through ML the

smarter it gets

• Software technology that uses robots to emulate human actions interacting with digital system and software

• Can automate revenue cycle processes with humans only managing exceptions

Robotic Process Automation (RPA) Machine Learning (ML)

• Eligibility verification• Prior authorization• Payment posting• Claim status• Simple appeals (Medical records)

Use Cases for Revenue Cycle

• Improved employee morale• Productivity• Reliability• Accuracy

Benefits

Are you using Robotic Process Automation RPA?1. Of course, we do

2. No, we have not been able to implement one

3. Almost there, we are in the process of getting/implementing one

4. Not applicable

Survey Question # 7


Poll Key = DQASQ

Which process are you automating through RPA?

Survey Question # 8


Patient follow up check list




credit card on file program


text messages w/ability to pay


payment plans


queuing system

Prioritize based on $$ & act quickly

Follow all debt collection rules

Step 5: Measure your success


*Data Dive – Cost and Revenue Survey 2021 Report Based on 2020 Data – Better Performing Practices for Multispecialty

Days in AR*

31AR over 120*

10% Adjusted FFS collection percent (NCR)*

98%

Denial rate

5%First pass resolution rate (FPRR)

95%First pass rate

98%


Step 6: Create a loop of continuous process improvement

Plan

DoCheck

Act

• Gather data• Identify opportunities• Establish a baseline• Develop a plan

• Implement changes• Monitor trends• Assess success

• Identify additional opportunities• Determine the next cycle


Top 3 takeaways

Track your KPIs:•You can not improve what

you do not measure

01Be proactive:•Check eligibility•Estimate out-of-pocket

expenses•Use denials to improve

processes

02Empower your staff:• Seek and trust their feedback• Encourage continuing education

03


Resource Links• Best Practices for Resolution of Medical Accounts– HFMA/ACA

https://www.hfma.org/content/dam/hfma/Documents/industry-initiatives/best-practices-medical-resolution-medical-accounts.pdf

• Patient Financial Communications Best Practices – HFMA https://www.hfma.org/content/dam/hfma/document/policies_and_practices/PDF/19968.pdf

• Role of Supervisory Guidance https://www.consumerfinance.gov/rules-policy/final-rules/role-of-supervisory-guidance/

• CFPB New Rules Tool Kit https://www.ontariosystems.com/accounts-receivable-management/cfpb-collections-new-rules-tool-kit/

• Standardizing denial metrics for revenue cycle benchmarking and process improvement https://www.hfma.org/industry-initiatives/standardizing-denial-metrics-revenue-cycle-benchmarking-process-improvement.html

• The Change Healthcare 2020 Revenue Cycle Denials Index https://www.changehealthcare.com/insights/denials-index

• Pre-Registration: Working the Health Care Revenue Cycle at the Earliest Patient Encounter: https://www.experian.com/assets/healthcare/white-papers/white-paper-pre-reg-working-the-healthcare-revenue-cycle.pdf

https://www.hfma.org/content/dam/hfma/Documents/industry-initiatives/best-practices-medical-resolution-medical-accounts.pdf

https://www.hfma.org/content/dam/hfma/document/policies_and_practices/PDF/19968.pdf

https://www.consumerfinance.gov/rules-policy/final-rules/role-of-supervisory-guidance/

https://www.ontariosystems.com/accounts-receivable-management/cfpb-collections-new-rules-tool-kit/

https://www.hfma.org/industry-initiatives/standardizing-denial-metrics-revenue-cycle-benchmarking-process-improvement.html


https://www.experian.com/assets/healthcare/white-papers/white-paper-pre-reg-working-the-healthcare-revenue-cycle.pdf

Paola Turchi, MSHCA, FHFMA, FACMPE, [email protected]