Presented for MCOL by Nancy Chapman Superior Consultant Company, Inc.
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Transcript of Presented for MCOL by Nancy Chapman Superior Consultant Company, Inc.
Financial Performance and Operations Improvement:
Integrating Revenue Cycle Improvement and Clinical Process Change to
Accomplish Greater Financial Results
Financial Performance and Operations Improvement:
Integrating Revenue Cycle Improvement and Clinical Process Change to
Accomplish Greater Financial Results
Presented for MCOL by Nancy Chapman
Superior Consultant Company, Inc.
Defining Potential Improvements:the Opportunity Evaluation ProcessDefining Potential Improvements:
the Opportunity Evaluation Process
Adding the horizontal viewpoint to identify systemic opportunities for financial and operations improvement
Using Technology to Support Improved ProcessesUsing Technology to Support Improved Processes
Financial Performance and Operations Improvement are goals for every process and department in the organization. The traditional, vertical focus of revenue cycle improvement falls short of exploiting all possible opportunities for financial improvement and positive change. When the
horizontal focus is added, exponential results can be achieved.
Portfolio
Optimization
Patient Access
Design
Denial
ManagementCharge Capture
and Pricing
Clinical
Management
Integration
Documentation and Coding
Billing
Process
Design
Accounts
Receivable
Management
Cash
Collections
Svc Line Growth
Capacity Management
Referral Management
New Venture Partnerships
Clinical Process Improvement
POC Med Admin
Bar Coding
Electronic ICU
Clinical Alerting
Scheduling
Pre-registration
Insurance Verification
Point-of-Service Collections
Call Center Technology
Registration Points
Prior Balance
Adjudication
Case Management
Denials and Appeals Tracking
Physician Alignment
Appeals Process
Electronic Charge Capture / Reconciliation
Market-based Pricing / Fee Screen Review
Operational Pricing
Managed Care Pricing & Contracting
Strategic Pricing
Standardization & Consolidation of Charge Description Master (CDM)
Medical Management Infrastructure
Service Line Redesign
Clinical Technologies and Process Improvement
CDMP**
Physician Alignment
Bed Management
Resource Management
DNFB* Reduction
CDMP**
Outpatient Documentation
APC Process Improvement
APC Financial Impact Assessment
HIPAA
Medical Records Redesign
Claim production work flow analysis
CDM Review & Update
Late Charge Analysis
EDI Editing & Claims management
DNFB Reduction*
Days Revenue
% > 90 Days
Hold Days
Bad Debts & Collection Policies
Contractual Modeling
Third Party Payor Analysis
Cash Acceleration
Denial Management
Self-Pay Collections Management
Follow-Up/Collector Workstations
Electronic Remittance Enablement/ Payment Posting
Agency Management
Prior To Services During Services Following Services
* Discharge Not Final Billed ** Clinical Documentation Management Program
Quantifying Potential Improvements:the Opportunity Evaluation Process
Quantifying Potential Improvements:the Opportunity Evaluation Process
It is no longer sufficient to describe potential improvements – today’s buyers need quantifiable targets and benchmarks to
measure accomplishments and sustain progress
AssumptionsGross Patient Service Revenues 1,224,000$
Net Patient Revenue (CY 2002 Estimated) 510,270$
Bad Debt Percentage (Based on CY 2001) 6.2%Contractual Percentage (Based on CY 2001) 52.1%
58.3%
Estimated Revenue Cycle Opportunity* Low High Target Low High Target
Prior to Services: 45.0%Portfolio Maximization 1.0% 2.0% 1.5% 5,103$ 10,205$ 7,654$ Patient Access Design 2.0% 3.0% 2.5% 10,205 15,308 12,757 Denial Management 1.1% 1.8% 1.8% 5,613 9,185 9,185
4.1% 6.8% 5.8% 20,921$ 34,698$ 29,596$
During Services: 35.7%Charge Capture and pricing 4.0% 6.0% 4.0% 20,411$ 30,616$ 20,411$ Clinical Management & Integration 0.3% 0.5% 0.3% 1,531 2,551 1,531 Documentation and Coding 0.3% 0.4% 0.3% 1,531 2,041 1,531
4.6% 6.9% 4.6% 23,472$ 35,209$ 23,472$
Following Services: 19.4%Billing Process Design 0.6% 0.7% 0.6% 3,062$ 3,572$ 3,062$ Accounts Receivable Management 1.5% 3.0% 1.5% 7,654 15,308 7,654 Cash Collections 0.4% 0.8% 0.4% 2,041 4,082 2,041
2.5% 4.5% 2.5% 12,757$ 22,962$ 12,757$
Total Improvement* 100.0% 11.2% 18.2% 12.9% 57,150$ 92,869$ 65,825$
Cost of Transition and Contingency:Estimated @ 25% of Inprovement 25.0% 35.0% 25.0% (14,288) (32,504) (16,456)
Net Range and Targeted Improvement Over Three (3) Calendar Years* 42,863$ 60,365$ 49,369$ * Does not include operating margin improvements
Calendar Year Distribution of Progress:CY 2003 40.0% 30.0% 40.0% 17,145$ 18,109$ 19,747$ CY 2004 40.0% 27.5% 35.0% 17,145 16,600 17,279 CY 2005 20.0% 42.5% 25.0% 8,573 25,655 12,342
100.0% 100.0% 100.0% 42,863$ 60,365$ 49,369$
Effective Percentage of Net Revenue 8.4% 11.8% 9.7%
Note: This estimate of
revenue improvement is
based upon information
believed to be reliable,
however, the estimate is
provided for discussion
purposes only and is
subject to material and
substantial changes.
Additional validation and
confirmation of the major
assumptions and related
revenue potential will be
required.
Value Proposition – Sample Hospital $(000)
Financial Performance, Operations Improvement and the Technology Connection
Financial Performance, Operations Improvement and the Technology Connection
While information systems have been expected to solve problems for years, the buying market largely missed the boat regarding the
critical need to change operations and processes that new technologies could support. This phenomena is changing rapidly
and returns on investments are being realized.
Technology-enabled approaches to financial performance and operations
improvement opportunities
Technology-enabled approaches to financial performance and operations
improvement opportunities
Traditional Approach• Cash acceleration• Back-end process improvement• DNFB reduction• System calculation of allowances• Verify of automated edits• Electronic work-lists• System notes and reminders• Electronic billing folders• Electronic posting/remittance
processing
e-Health Solutions• Integrated processes and
technology across all departments
• Web-enabled patient access• Advanced telephony systems• Self-serve kiosks• Call center technology• Workflow automation (from
the simplest (automating eligibility checking) to the most complex (CPOE)
• A core patient record with elements of the electronic medical record (EMR) which leverages current legacy systems
• Longitudinal patient EMR• Personalized web pages for
physicians with links and alerts to IDN – physician portals
• Real-time claims adjudication• Appeal & dispute resolution
with payors
DE
RIV
ED
BE
NE
FIT
LEVEL OF TECHNOLOGY ADOPTED
Technology Enabled Redesign
• Front and back end process improvement
• Denial management• Charge capture enhancements• Clinical documentation and care
management improvements• Uniform policies and procedures
throughout departments• Electronic schedule (with access
notification of service) • On-line access to multiple payors for
verification• On-line access to past balances• Physician alignments• Outsourcing opportunities• Consolidated/shared services
opportunities
Key Results Of The Opportunity Evaluation Process:
Improved Definition of Prioritized Tasks, Project Teams and Achievable Budgets
Key Results Of The Opportunity Evaluation Process:
Improved Definition of Prioritized Tasks, Project Teams and Achievable Budgets
The value statement
Key Results of the Opportunity Evaluation ProcessKey Results of the Opportunity Evaluation Process
Used to quantify and serve as the value statement for the level of effort required to accomplish change.
Used to rapidly identify areas for financial improvement in clinical service lines and operations areas.
Helps to focus required resources by skill set to allow optimized configuration of multi-disciplinary project team
Helps to more accurately project budget requirements. Projects potential future state – both from an operations and
financial perspective Provides key performance metrics and analytics for each major
clinical and business process and related sub-processes. Such metrics and analytics include:
• Process and sub-process benchmarks and analytics
• Organization’s decision triggers and analytics
• Shared risk/reward performance measurement analytics
Summary Questions and AnswersSummary Questions and Answers