How to Transform and Optimize a Large Scale Revenue Cycle ... · How to Transform and Optimize a...

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

http://www.culberthealth.com/

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

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

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

Health IT Value Steps

• 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

This Presentation will demonstrate the various stages of STEPS in the following manner

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 2015

– 730,000 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

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

1993. 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

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

A Hospital Without Walls 2013 New Starts

NELC Geographical Coverage - 2015

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

Implementation Milestones To Date

• AR Aging Tracking Report

– Total 90+ % AR

• In seven weeks, Reduced from 37% to 25% as of April 18. 90+ 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


• 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 15 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, 2015


• 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.

– 73 – 80% claims in the 0 – 30 days’ timeframe for the three weeks since we began monitoring. Best Practice is >70%

As of Friday, December 4, 2015

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

Before…

2,300,000

2,500,000

2,700,000

2,900,000

3,100,000

3,300,000

3,500,000

3,700,000

3,900,000

4,100,000

4,300,000

1/14 2/14 3/14 4/14 5/14 6/14 7/14 8/14 9/14 10/1411/1412/14 1 / 15

2 / 15

3 / 15

4 / 15

5 / 15

Claims Processed to New Revenue

Claims Processed New Revenue Added Expon. (New Revenue Added )

After….

2,300,000

2,500,000

2,700,000

2,900,000

3,100,000

3,300,000

3,500,000

3,700,000

3,900,000

4,100,000

4,300,000

4,500,000

4,700,000

1/1

4

2/1

4

3/1

4

4/1

4

5/1

4

6/1

4

7/1

4

8/1

4

9/1

4

10

/14

11

/14

12

/14

1 /

15

2 /

15

3 /

15

4 /

15

5 /

15

6 /

15

7 /

15

8 /

15

9 /

15

10

/ 1

5

11

/ 1

5

12

/ 1

5

Claims Processed to New Revenue

Claims Processed New Revenue Added Expon. (New Revenue Added )

DSO Before…

0

20

40

60

80

100

120

Unbilled DSO Unfinished DSO Billed DSO Total DSO

DSO After….

0

20

40

60

80

100

120

1/1

4

2/1

4

3/1

4

4/1

4

5/1

4

6/1

4

7/1

4

8/1

4

9/1

4

10

/14

11

/14

12

/14

1 /

15

2 /

15

3 /

15

4 /

15

5 /

15

6 /

15

7 /

15

8 /

15

9 /

15

10

/ 1

5

11

/ 1

5

12

/ 1

5

Unbilled DSO Unfinished DSO Billed DSO Total DSO

Bad Debt Before….

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

Bad Debt Target

Bad Debt After….

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

1/14

2/14

3/14

4/14

5/14

6/14

7/14

8/14

9/14

10/1

4

11/1

4

12/1

4

1 /

15

2 /

15

3 /

15

4 /

15

5 /

15

6 /

15

7 /

15

8 /

15

9 /

15

10 /

15

11 /

15

12 /

15

Bad Debt Target

Accounts Receivable Before…

3,500,000

4,000,000

4,500,000

5,000,000

5,500,000

6,000,000

6,500,000

7,000,000

1/1

4

2/1

4

3/1

4

4/1

4

5/1

4

6/1

4

7/1

4

8/1

4

9/1

4

10

/14

11

/14

12

/14

1 /

15

2 /

15

3 /

15

4 /

15

5 /

15

A/R Trend

A/R Trend

Accounts Receivable After….

3,500,000

4,000,000

4,500,000

5,000,000

5,500,000

6,000,000

6,500,000

7,000,000

1/14 3/14 5/14 7/14 9/14 11/14 1 / 15

3 / 15

5 / 15

7 / 15

9 / 15

11 / 15

A/R Trend

A/R Trend

Net Revenue to Accounts Receivable Comparison Before….

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

1/14

2/14

3/14

4/14

5/14

6/14

7/14

8/14

9/14

10/1

4

11/1

4

12/1

4

1 /

15

2 /

15

3 /

15

4 /

15

5 /

15

Net Revenue A/R Trend

Net Revenue to Accounts Receivable Comparison After….

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

1/14 3/14 5/14 7/14 9/14 11/14 1 / 15

3 / 15

5 / 15

7 / 15

9 / 15

11 / 15

Net Revenue A/R Trend

Cash Collection Ratio Before….

70.00%

75.00%

80.00%

85.00%

90.00%

95.00%

100.00%

105.00%

Cash Collection Ratio

Cash Collection Ratio After.…

70.00%

75.00%

80.00%

85.00%

90.00%

95.00%

100.00%

105.00%

1/14

2/14

3/14

4/14

5/14

6/14

7/14

8/14

9/14

10/1

4

11/1

4

12/1

4

1 /

15

2 /

15

3 /

15

4 /

15

5 /

15

6 /

15

7 /

15

8 /

15

9 /

15

10 /

15

11 /

15

12 /

15

Cash Collection Ratio

Cash Collection Before….

2,000,000

2,200,000

2,400,000

2,600,000

2,800,000

3,000,000

3,200,000

3,400,000

3,600,000

3,800,0001/

14

2/14

3/14

4/14

5/14

6/14

7/14

8/14

9/14

10/1

4

11/1

4

12/1

4

1 /

15

2 /

15

3 /

15

4 /

15

5 /

15

Cash Collection Target

Cash Collection After….

2,000,000

2,200,000

2,400,000

2,600,000

2,800,000

3,000,000

3,200,000

3,400,000

3,600,000

3,800,000

4,000,000

4,200,000

1/14 3/14 5/14 7/14 9/14 11/14 1 / 15

3 / 15

5 / 15

7 / 15

9 / 15

11 / 15

Cash Collection Target

Billed Comparison to A/R Before….

1,800,000

2,800,000

3,800,000

4,800,000

5,800,000

6,800,000

7,800,0001

/14

2/1

4

3/1

4

4/1

4

5/1

4

6/1

4

7/1

4

8/1

4

9/1

4

10

/14

11

/14

12

/14

1 /

15

2 /

15

3 /

15

4 /

15

5 /

15

Billed A/R Trend

Billed Comparison to A/R After….

1,800,000

2,800,000

3,800,000

4,800,000

5,800,000

6,800,000

7,800,000

1/14 3/14 5/14 7/14 9/14 11/14 1 / 15

3 / 15

5 / 15

7 / 15

9 / 15

11 / 15

Billed A/R Trend

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

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 bi-weekly 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


• 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

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 hand offs

Notes Manager Under-Utilized Metric tracking

Batch Functions

Write-offs

Assign Status

Resubmit

Not used

Payer set up & options Under-Utilized Increase efficiency of staff


Decrease hand offs

Lot Tracking Not used Increase efficiency of billing staff


Decrease hand offs

Findings by Revenue Cycle Area

• Information Technology (Continued)

Feature Used or Under-Utilized ROI

Authorization Tracking Not used Increase efficiency of staff


Decrease hand offs

SMN/CMN Tracking Under-Utilized Increase efficiency of staff

Billing Review Queue Not used



Decrease hand offs

Recurring Rental Manager Under-Utilized Automatic review and billing for rental

equipment


Electronic Billing Under-Utilized Increase efficiency of staff


Decrease hand offs


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

Buy-in from NELC

leadership

Improve staff engagement

Improve communication

Decreased staff frustration

$

Review the process , revise the

policy and provide education to staff

regarding the Acknowledgement of

Financial Responsibility (AFR)

process

Availability of a

process owner

Eliminates duplicative and

unnecessary work steps


$



ROI

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

Availability of process

owner

Reduce denials

Improve staff engagement


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

Agreement on

benchmarks and

sanctions for non-

adherence


Improve staff morale



practices

$

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

Comprehensive

Denials Management

Analysis

Reduce non-billable charges

decrease denials

Increase cash collections

$



ROI

Review the current Part D process

with all appropriate departments and

simplify as much as possible, i.e.,

create a cheat sheet

Availability of process

owner



practices



$

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



practices


$

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





practices

Reduced denials


duplication

Improve overall revenue stream

and cash position

$

Moderate Cost/Low Time to Implement


ROI

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

System capacity to

support ANSI codes

and standardization

of processes

Process owner

Decrease denials

Improve overall revenue

position


duplication


stream and cash

position

Decrease bad debt

$$

Moderate Cost/Low Time to Implement


ROI

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

System capacity and

standardization

of processes

Improved charge

capture

Reduced denials


duplicative work


stream and cash

position

$$

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

Use of IT resources

or outside resources

Eliminates duplicative

and unnecessary work

steps

Increase staff efficiency

Create Director of Revenue Cycle position to

oversee Revenue Cycle operations and

revise the organization/reporting structure.

Fill the vacant Billing/Collections Manager

position

Buy-in from NELC

leadership

Reduce denials

Improve staff

engagement




practices


Moderate Cost/Moderate Time to Implement


ROI

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

Availability of CPR+

expert

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


stream and cash

position

$$



ROI

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

Availability and buy-in

of Revenue Cycle

Management Team





practices

Reduce bad debt

$$



ROI

Combine Intake Specialists from branch

office with Insurance Verification team at

the corporate office

Attrition

Buy-in from NELC

leadership





practices

$$

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

Improved morale and

performance from

managers and

supervisors/Leads

Overall improvement in

department operations

Improved financial

position

$$

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

Denials

Top Denial Reasons -- First Quarter 2014 Amount %

Previously paid 434,244 25.94%

Claim denied charges 323,983 19.35%

Duplicate claim/service 251,757 15.04%

Precertification/authorization/notification absent 147,403 8.80%

Claim/service lacks information which is needed for

adjudication 129,175 7.71%

The time limit for filing has expired 82,249 4.91%

Expenses incurred after coverage terminated 78,835 4.71%

Additional information is required to process claim 43,159 2.58%

The diagnosis is inconsistent with the patient's age 22,984 1.37%

Total Top Denials 1,674,355 38.82%

Total First Quarter 2014 Denials 3,900,000

December 2014 Billed Accounts Receivable by Age Group

41%

13%

9%

37%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

0 - 30 31 - 60 61 - 90 91+

December 2014 Accounts Receivable

5,802,739

3,197,043

239,936

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

"Billed" AR "Un - Billed" AR "Un - Finished" AR

Proposed Revenue Cycle Benchmarks

Health IT Value Steps

• 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

This Presentation will demonstrate the various stages of STEPS in the following manner

Summary

Michael G. Souza

President & CEO

New England Life Care

(781)932-4333

[email protected]

William E O’Brien

Senior Revenue Cycle Consultant

Culbert Healthcare Solutions

(207)251-2283

[email protected]

http://www.culberthealth.com/

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