Managing A/R During System Conversion:Protecting Cash Flow and Patient Data

John Behn, MPALaurie Daigle, CPC

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Agenda

• Assess the pros and cons of system change• Evaluate and improve current state of A/R

• Third party• Self-pay

• Review options• Prepare for implementation

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System Maintenance

• Some form of update is required at least every 10 years• Comply with regulatory changes

• ICD-10 field-length• Value-based care

• Comply with the Affordable Care Act • Or Worlds Greatest Healthcare Act• Or American Health Care Act • Or Better Care Reconciliation Act• Or whatever new plan emerges from the ongoing congressional

battle over healthcare!

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To Change or Not to Change

Pros•Healthcare system needs have

most likely changed considerably, requiring multiple upgrades and patches

• Security and integrity concerns•Up to 60 to 80% of IT budgets

spent maintaining legacy systems

Cons•Conversions very costly, time

and resource intensive•May not have the right skill sets

in-house•Difficult or impossible to

integrate disparate systems•Transition may require 2 teams

to work old A/R, cash aps and customer service

•7 to 25 years (or forever) storage for legacy medical record retention

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A/R Conversion

Transition plan is usually a year or more

How much time, resources dedicated to

transitioning A/R?

Sometimes an afterthought

•Current team• Improvements•Future needs

Begin planning A/R conversion once the

decision is made

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A/R Transition Plan

Create an A/R transition plan

Establish expectations for cash flow

Identify risks and opportunities

Begin a clean-up plan immediately

Updates required at each planning session

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Understand A/R

Industry standard for A/R recovery

A/R less than 60 - 90%

A/R 121-150 days 55%

A/R over 180 days 5%

Evaluate average collection rates

By Payor

IP and OP

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Assess Current State of A/R

• Late charge mitigation• DNFB behavior change

• Third party payor• Self-pay

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Identify All A/R

• DNFB (Discharged, not final billed)• Average inventory• By Department• By Provider• In Dollars• Units• Days

• A/R days • Total• By Payor

• Clean up process improvements

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Unbilled Charges

• Days to bill• In process of Clearinghouse resolution (rejections)

• Other unbilled revenue• Late charges

• Pathology charges• Send outs

• Partially billed open accounts• Inpatient• Recurring• Surgery/Pathology

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Daily A/R

Final Billed Total AR

Weekday Date Gross AR Days Total AR(Excluding S/P and Pending Medicaid Self Pay

Pending Medicaid

Mon 1 65.88 72,156,242 60,967,392 - 11,188,850 Tue 2 66.86 73,232,300 73,232,300 - -Wed 3 65.86 72,134,337 72,134,337 - -Thu 4 63.75 69,832,827 69,832,827 - -Fri 5 64.19 70,314,710 70,314,710 - -Sat 6 65.31 71,540,335 71,540,335 - -Sun 7 66.35 72,679,716 61,488,426 - 11,191,290Mon 8 65.22 71,434,542 33,373,502 26,841,522 11,219,518Tue 9 65.20 71,417,704 33,167,483 27,030,703 11,219,518Wed 10 65.13 71,344,495 33,046,277 27,079,998 11,218,219 Thu 11 65.09 71,298,218 33,080,043 26,999,955 11,218,219

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Held AccountsMedicare RTP ($)

Meditech Failed ($)

ePremis Held ($) Total ($)

Medicare RTP (#)

Meditech Failed (#)

ePremis Held (#) Total (#)

- - - -

- - - -

- - - -

- - - -

- -

- -

-

- -

400,530 3,852,807 4,253,337 66 1,210 1,276

395,372 4,046,480 4,441,852 74 1,173 1,247

430,217 4,931,399 5,361,616 101 1,382 1,483

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Collections

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0.00

2,000,000.00

4,000,000.00

6,000,000.00

8,000,000.00

10,000,000.00

12,000,000.00

14,000,000.00

16,000,000.00

18,000,000.00

June July August September October November December

TOTAL COLLECTIONS 2016 TOTAL COLLECTIONS 2015

Linear (TOTAL COLLECTIONS 2016) Linear (TOTAL COLLECTIONS 2015)

Go-live

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Self-Pay Strategies

• Review current point-of-service practices• Evaluate self pay A/R

• Discounts for payment in full• Early out

• Transfer all applicable accounts to Bad Debt vendors prior to conversion

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Increasing Patient Responsibilities

http://www.kff.org/health-costs/issue-brief/snapshots-the-prevalence-and-cost-of-deductibles-in-employer-sponsored-insurance/

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Option 1: Migrate A/R

• Headaches, band-aids and errors carry forward• New system does not start “clean”

• New system will not be “pristine”• Incompatibility makes for a messy and complex problem• Potential missed revenue

• Unbilled• Adjudicated• Rejected• Appealed

• Vendors typically do not recommend

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Option 2: Keep Legacy A/R in House

Total control Labor intensiveResource intensiveWork both systems• Follow-up• Posting • Remittance Advices will include

payments from both systems• Posters must separately batch

and reconcile separate batches

Pros

: Cons:

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Before Conversion

• Prepare in advance• Monthly revenue reporting• Assign billing, follow-up staff accordingly to the new system

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Option 3: Outsource A/R

Pros•Migrate data from the legacy system into

an active data archiving solution•Vendors usually familiar with all systems•Allows revenue cycle leadership and key

personnel to focus on successful implementation and training

•Experience may lead to valuable feedback, potentially faster cleanup

•Maintain pre and post-conversion cash collections?

• Limited disruption to staff?

Cons•Maintain pre and post-conversion cash

collections?•Planning – outcome is only as good as

the plan•Accountability•Vendor commission•Oversight/vendor management•Potential to consume significant

resources

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Customer Service

• Research required in multiple systems• Patients will continue to have questions from Payor EOBs

• Reps must be prepared to research in both systems• Statements may look different, causing confusion

• Consider posting copies of the new statement in waiting rooms and at Registration

• Envelope stuffers in current statements months in advance• Notice of the change• Date of change• What the patient can expect• Ask for patience

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Customer Service

• A/R in legacy system• A/R new system

Consider two phone numbers

• Easier for staff• Vendor preferred methodPros

• Patient inconvenience• Patient confusionCons

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Plan for Go-Live

• 90 days prior to implementation• Aggressively work existing A/R• Plan for overtime• Outsource >90 days

• 60 days prior to implementation• Test A/R system• Train billers in new system• Evaluate A/R days and modify approach if necessary

• By payor• Days• Dollars• Re-evaluate decision to keep in house/outsource• Outsource >60 days (should be shrinking significantly)

• 30 days prior to implementation• Evaluate vendor• Outsource >30 days

• Implementation• No A/R in the new system for 30 days• Final clean up and prepare for outsourcing of all legacy A/R

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Questions

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Sol

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Thank You

• Stroudwater Revenue Cycle Solutions was established to help our clients navigate through uncertain times and financial stress. Increased denials, expanding regulatory guidelines and billing complexities have combined to challenge the financial footing of all providers.

• Our goal is to provide resources, advice and solutions that make sense and allow you to take action.

• We focus on foundational aspects which contribute to consistent gross revenue, facilitate representative net reimbursement and mitigate compliance concerns. Stroudwater Revenue Cycle Solutions helps our clients to build processes which ensure ownership and accountability within your revenue cycle while exceeding customer demands.

• Contact us to see how we can help.

Laurie Daigle, CPCldaigle@stroudwater.com

603-553-5303

John Behn, MPAjbehn@stroudwater.com

207-221-8277 24