Revenue Maximization for Health Centers: A Practical Approach

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MACHC Annual Meeting and Conference September 25
26, 2008
Revenue Maximization for Health Centers A
Practical Approach
Michael Holton Manager RSM McGladrey,
Inc. 919-571-3266 Michael.Holton_at_RSMI.Com
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Goals of the Training

• Review some standards of billing and collection
  systems to assure maximizing cash income
• Discuss the areas that directly and indirectly
  impact on the billing and collections process
• Share experiences interactively about approaches
  tried by participants that have resulted in
  improved processes and additional revenue
• Discuss issues related to improving provider
  productivity

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Registration/Certification
Patient Reception
Patient Clinical Visit Service Delivery
Appointment Scheduling
The Revenue Cycle
Documentation Coding
Accounts Receivable Management and Collections
Charge Processing/Check Out
Denied Claims Management
Patient Statement Claim Production
Claims Patient Payments Processing
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Standards for Billing and Collections Systems
to Improve Cash Flow

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Standards for Patient Billing Systems

• Written Policies and Procedures with Board
  approval (including registration certification)
• Annual Review and adjustment of fee schedule
• Patient Statements sent monthly
• Encounter forms entered at front desk
• Staff person to field billing questions
• Installment plan system
• Registration entry data validation
• Patient info verified at each visit
• Providers attend coding workshops
• Billing staff attend coding workshops

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Standards for Patient Collections Systems

• Written Policies and Procedures approved by the
  Board
• Dunning Notices (30,60,90, etc.)
• Staff person designated for collections
• MIS supports notes on system
• Total balance requested at each visit
• Track of collections at front desk
• Front desk and billing staff attend collections
  workshops
• Procedure to restrict services for chronic
  non-payers

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Health Center Revenue Cycle Operational Issues
A Look at Best Practices
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Best Practices in Charge Structure

• Establish charges at 100 to 200 of Medicare fee
  schedules, or at cost
• Maintain a complete and up-to-date charge master
• Make sure all codes are linked to charge master

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Best Practices in Appointment Taking

• Off desk appointment clerk
• Assess needs to schedule appropriately
• Walk-ins/No Shows
• Double-Book
• Train appointment personnel regarding programs
• Obtain insurance information

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Best Practices in Registration

• Pay registration staff according to market
• Staff with quality employees
• Establish regular communication with billing
• Establish cooperation with billing
• Centralized registration
• Utilize on-line registration
• Train regarding programs
• Verify third-party coverage
• Review Collections Policy

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Best Practices in Registration

• Monitor and reduce registration error rates
• Monitor productivity
• Conduct time studies
• Regular training
• Permanently correct errors at the source
• Collect up front at every opportunity
• Have a system for certification verification
• Take action to reduce wait times

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Best Practices at Check-Out

• Have a check-out process
• Attempt to collect amounts due from patients
• Train in collection practices
• Input charges at check-out
• Establish process to deliver patients to
  check-out
• Have sufficient cash drawer

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Charge Capture Best Practices

• Utilize technology to account for encounter form
  numerical sequence
• Require total charges on encounter form to be
  balanced
• Dont give original encounter forms to patients
• Make effort to provide sufficient encounter form
  documentation
• Establish reliable procedures related to hospital
  (and other off-site) charges
• Enter charges at check-out

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Daily Balancing Best Practices

• Total charges posted balanced to batch of
  encounter forms
• Payments posted balanced to bank deposit
• Balancing or testing of contractual adjustments
• No holding cash receipts

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Standards for Claims Billing Systems

• Written Policies and Procedures for Claims
  billing approved by Board
• File claims electronically
• Daily check of encounter form information and
  patient insurance status
• Management report of claims filed by payer
• Claims s/b filed daily, weekly, bi-weekly
• Insurance staff attend regular billing trainings
  provided by payers
• Staff person designated to review and advise
  others of 3rd party bulletins and correspondence

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Standards for Claims Collections Systems

• Dunning notices and f/u with payers on past due
  claims
• Log denied claims management report
• Work denied claims by paying payer priority
  denial codes
• Aged report of outstanding claims
• Staff develops relationship with payers
  documentation of calls/contacts
• Denied claims are routinely reviewed with
  provider staff
• Insurance processing staff attend insurance
  billing workshops offered by payers

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Problems in Billing

• Failure to bill all payers
• Failure to utilize electronic billing
• Failure to address electronic errors
• Not billing timely

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Problems in Billing

• Not following up on denials
• Failure to rebill as needed
• Lack of knowledgeable billing staff
• Improper coding
• coding by billers
• provider-based coding

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Best Practices in Billing

• Bill all payers within 3-5 days of service
• Rebill accounts after 60 days
• Hire knowledgeable billing staff
• Use provider-based coding and train them

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Failure to Manage Accounts Receivable

• Not having or following collection policies
• Not posting charges or billing in a timely manner
• Too lax on collections
• Not following up on accounts
• Not reviewing accounts receivable agings monthly
• Not collecting co-pays/deductibles at time of
  service
• Registration errors

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Failure to Manage Accounts Receivable

• Not establishing expectation of payment at the
  time appointment is made
• Not using or tracking written payment agreements
• Not having sufficient personnel to allow for
  collection activities
• Not following up on denials in timely fashion
• Not maintaining proper self-pay balances
• Not posting cash receipts or posting timely

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Accounts Receivable Best Practices

• Establish expectation of payment and enforce it
• Be consistent with all payers
• Adopt a written collection policy and enforce
• Collect amounts due from patients at time of
  service
• Keep accurate records on patient balances
• Send statements to patients
• Implement collection procedures

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Accounts Receivable Best Practices

• Detailed accounts receivable aging reviewed
  monthly
• Use written payment agreements and implement
  electronic tracking
• Employ sufficient collection staff
• Resolution of denials within 10 days written
  denial summary report
• Have patients sign financial policy at
  registration
• Involve patients in insurance collection

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Cash Management Best Practices

• Clerks balance cash drawers daily
• Cash receipts deposited daily intact
• Receipt issued for every in-office payment
• Cash handling, payment posting and deposit
  preparation segregated
• All checks stamped for deposit only immediately

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Cash Management Best Practices

• Proper procedures for write-offs and refunds
  including segregated posting
• Petty cash monitored and balanced regularly
• Office managers do not handle cash receipts

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Removing Obstacles to Provider Productivity
2008 Community Health Institute
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SESSION GOALS

• Discuss operational issues that affect provider
  productivity.
• Review primary systems flows to identify
  potential trouble spots.
• Identify system approaches and methodologies to
  help alleviate trouble spots.

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FACTORS AFFECTING PROVIDER PRODUCTIVITY

• Sufficient service/patient demand
• Provider supply and availability that reasonably
  match demand
• Operating infrastructure (e.g., staff, practice
  management system) and processes that facilitate
  moving patients efficiently through the system

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UNDERSTANDING OPERATIONS

• Health center management must perform detailed,
  systematic analyses to understand operations and
  how they affect productivity and performance.
  Anecdotal information, assumptions, or the way
  weve always done things, will give a misleading
  picture of how a health center functions and what
  needs to change to improve performance.
• Various tools are available to measure
  operational performance in each health center
  department.
• Once management understands its operations, it
  can begin to develop effective solutions for
  improvement.

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SIMPLIFIED PATIENT-TO-CASH FLOW CHART(THE BIG
PICTURE)
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UNDERSTANDING THE MAJOR PROCESSES

• Some of the steps on the preceding flow diagram
  represent a complex series of actions and
  decisions.
• Every action step and decision point has a
  potential bottleneck or pitfall.
• Avoiding those pitfalls and bottlenecks is what
  makes health center operations run as smoothly as
  possible.
• Health Centers must collect the right data to
  identify and determine how to correct
  deficiencies in order to improve performance.
• In the more detailed flow charts that follow,
  each arrow represents what can be measured.

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UNDERSTANDING THE MAJOR PROCESSES(THE COMPONENTS)

• APPOINTMENT SCHEDULING

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APPOINTMENT SCHEDULING

• Appointment scheduling has a major impact on
  operations, efficiency and collections.
• The appointment scheduling template is key to
  provider productivity. Templates that are well
  developed, and then used and managed properly can
  help ensure that providers have an adequate
  supply of patients to see and, thus, are
  productive.
• Provider productivity can be expressed as an
  equation
• Productivity S X
  
• Management CAN influence the outcome of this
  equation.

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IMPACT OF APPOINTMENT SCHEDULING ON PROVIDER
PRODUCTIVITY

• Management should
• Ensure a steady flow of patients for providers
• Providers see the patients who are presented to
  them
• Consider provider-specific no-show and walk-in
  rates to estimate the number of daily appointment
  slots that should be double or triple-booked for
  each provider
• Conclude provider schedules (i.e., availability)
  and scheduling templates (i.e., standard time
  slots by clinical specialty for each appointment
  type) as policy
• Deviation from this policy should require the
  Chief Medical Officers approval
• Dont put Schedulers in the unenviable position
  of debating scheduling issues with providers

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IMPACT OF APPOINTMENT SCHEDULING ON PROVIDER
PRODUCTIVITY

• Management should
• Maximize the amount of time providers are in
  clinic seeing patients
• Conclude provider schedules (i.e., availability)
  and scheduling templates (i.e., standard time
  slots by clinical specialty for each appointment
  type) as policy
• Deviation from this policy should require the
  Chief Medical Officers approval
• Dont put Schedulers in the unenviable position
  of debating scheduling issues with providers
• Time slot length is impacted by operational
  efficiency

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IMPACT OF APPOINTMENT SCHEDULING ON PROVIDER
PRODUCTIVITY

• Management should
• Determine how walk-ins will be treated (e.g.,
  designated urgent care provider(s), designated
  appointment slots, worked in between scheduled
  patients, etc.)
• Monitor each providers patient throughput to
  determine if walk-ins routinely cause
  unreasonable delays for appointed patients
• Determine the distribution of new, established,
  appointed and walk-in patient visits over the
  course of a typical day in order to match
  provider availability
• Determine the impact of walk-ins on patient flow

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IMPACT OF APPOINTMENT SCHEDULING ON PROVIDER
PRODUCTIVITY

• Scheduling staff should make every attempt to
  schedule the next available appointment that
  meets patient specifications.
• Practice management system should have an built
  in algorithm that facilitates the identification
  of next available slots.
• Access is determined by looking at third next
  available appointment
• Provider productivity and time to 3rd next
  available appointment should be correlated

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IMPACT OF APPOINTMENT SCHEDULING ON PROVIDER
PRODUCTIVITY

• On a regular basis, the front office manager
  and/or business manager should
• Review and monitor the scheduling of patient
  visits
• Check that appointments are being
  double/triple-booked, as appropriate and
• Review the impact of special requests on
  appointment scheduling (e.g., unanticipated
  provider schedule changes).
• Schedulers should fill the full days schedule.
• Dont stop scheduling appointments early.
• Use same-day appointment to fill open and
  cancelled appointment slots.

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SELECT MEASURES FOR APPOINTMENT SCHEDULING

• Average Number of Rings Before Calls Are
  Answered/Call Drop Rate/Rate of Calls Placed on
  Hold/Average Hold Time - Measured at Peak and
  Non-Peak Times
• Percentage of Reminder Phone Calls (where contact
  is made and where language precluded
  communication)/Postcards Completed (mailed versus
  returned)
• No-Show Rates By Provider (for new and
  established patients)
• Waiting Time from Registration to Provider Visit
  (scheduled appointments and walk-ins separately)
• Percentage of Walk-Ins and Same-Day Appointments
• Average Appointment Wait Times (Urgent,
  Routine/Well and Non-Urgent Sick Visits)
• Percentage of Unfilled Appointment Slots

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UNDERSTANDING THE MAJOR PROCESSES(THE COMPONENTS)

• PATIENT REGISTRATION

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PATIENT REGISTRATION DETAIL
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IMPACT OF REGISTRATION ON PROVIDER PRODUCTIVITY

• Objective - To quickly and accurately register
  the maximum number of patients who present for
  care
• Ineffective registration processes cause
  throughput bottlenecks and provider downtime.
• Waits to register, for insurance
  verification/eligibility determinations, for
  medical record, for clinical staff notification
  and patient retrieval
• Effective processes enable staff to perform key
  tasks easily, quickly and accurately
• Accurate and complete patient paperwork
• Collect/verify patient identification,
  demographic information and insurance coverage
• Ensure collected information is consistent with
  that in practice management system and in payers
  database
• Retrieve record, notify clinical staff and
  collect co-payment

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POTENTIAL BOTTLENECKS IN REGISTRATION

• Overabundance of walk-in versus appointed
  patients
• Majority of patients who require demographic
  information updates
• Insurance verification methods that are not
  automated (dependent on telephone calls)
• High number of patients whose insurance coverage
  is determined to be inactive
• ____________________________________________
  ____________
• What are the root causes and impacts of
  these bottlenecks?
• ____________________________________________
  ____________
• What is the impact, in number of patients who
  could be seen, if bottlenecks were eliminated?

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IMPACT OF INTAKE/REGISTRATION ON PROVIDER
PRODUCTIVITY

• Training, monitoring and feedback are essential.
• High turnover of front desk staff is common.
• New staff frequently have limited, if any,
  relevant experience.
• Existing staff adopt bad habits (e.g., shortcuts,
  omitting key tasks).
• Curriculum should be based operating policies and
  procedures
• Include common scenarios They might not
  encompass every situation a Registrar encounters
  but they can establish expectations and
  parameters.
• Proper completion of the Registration Form is
  crucial
• Make the form self-explanatory or routine to
  minimize misunderstanding and personal
  interpretation.
• Inform staff that they are responsible to ensure
  proper completion
• Ensure that the correct patient is being recorded
  in the system
• Insurance coverage verification
• Use an on-line systems, whenever available
• Aggressively screen uninsured patients for
  coverage eligibility

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SELECT PRODUCTIVITY MEASURES FOR REGISTRATION

• Average Number of Patients Registered Per Hour
  Per Provider
• Average Time(s) to Complete Patient Intake (for
  new, established, appointed and walk-in patients)
• Average Wait Time in Registration
• Error rate(s)
• A key element of a practice management system
  should be its ability to associate each
  transaction with an individual. However, the
  system must be configured and used so that it
  accumulates the right information. When this is
  so, management can analyze each users
  performance.

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UNDERSTANDING THE MAJOR PROCESSES(THE COMPONENTS)

• PATIENT SERVICE

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PATIENT SERVICE DETAIL
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POTENTIAL BOTTLENECKS IN PATIENT SERVICE

• Charts not available or incorrect chart delivered
  to clinical area
• Exam rooms not turned over timely
• Provider running behind not ready for the
  patient
• High number of patients found ineligible for
  their coverage
• __________________________________________________
  _
• What are the root causes and impacts of these
  bottlenecks?
• __________________________________________________
  _
• What is the impact in number of visits that could
  have been completed if bottlenecks were
  eliminated?

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ROLE OF CLINICAL SUPPORT STAFF IN
CAUSING/REDUCING BOTTLENECKS

• Objective - To prepare facilities and patients
  for a productive visit with a provider as quickly
  as possible
• Clinical support staff (e.g. nurses, medical
  assistants) impact patient flow and provider
  productivity. They should
• Understand and perform their job functions (e.g.,
  retrieve and prepare patients in a timely manner,
  prepare exam rooms, maintain exam room supply
  inventory)
• Have supervision who monitors performance and
  resolves issues that negatively influence
  performance
• Be organized in a workable staffing model (i.e.,
  nurses versus MAs) that has a sufficient
  complement.
• There is not a right staffing model instead
  health centers tend to equalize the cost of these
  staff by the skill level mix (i.e. CHCs with a
  nurse staffing model tend to have less clinical
  support staff per provider).

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ROLE OF PROVIDERS IN INCREASING THEIR PRODUCTIVITY

• Objective - To provide the highest possible
  quality of care to the maximum number of patients
• Providers should
• Direct questions/comments/requests regarding
  appointment scheduling to the appropriate
  manager, not the staff person who performs the
  function.
• Discuss schedule changes with the Chief Medical
  Officer as soon as possible (and secure approval,
  as appropriate).
• Arrive at work at least 15 minutes before their
  first appointment each day (everyone needs prep
  time).
• Avoid working in walk-in patients when it causes
  unreasonable delays for those with an
  appointment.
• Resist the natural tendency to treat all the
  conditions of medically complex patients who have
  been noncompliant (e.g., repeat no-shows) during
  a single visit.
• Establish a protocol to identify and then
  reschedule noncompliant patients.

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ROLE OF PROVIDERS IN INCREASING THEIR PRODUCTIVITY

• Providers should
• Minimize time devoted to non-patient care
  activities
• Occasions requiring long travel times (e.g.,
  between care sites) during the middle of the day
• Administrative time
• Time off during peak volume cycles
• Organize records so that basic patient facts
  (e.g., diagnoses, medications, treatment plans)
  can be easily identified.
• Consistently document care, at least sufficiently
  to support selected diagnostic and procedure
  codes, before each patient is discharged.
• Maintain an ongoing dialogue with support staff
  regarding ways to increase the teams collective
  productivity.
• Share impediments to increased productivity with
  management and jointly conclude ways to eliminate
  them.

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UNDERSTANDING THE MAJOR PROCESSES(THE COMPONENTS)

• MANAGEMENT

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ROLE OF MANAGEMENT IN INCREASING PROVIDER
PRODUCTIVITY
ROLE OF MANAGEMENT IN INCREASING PROVIDER
PRODUCTIVITY

• Management will be most effective when they
  enable, not dictate, increased provider
  productivity
• Incentive compensation
• Will encourage increased provider productivity
• Will not remove operational impediments that
  suppress it
• Make start the conversation about, or make the
  providers stakeholders in, removing obstacles to
  productivity
• Operating processes that are clearly defined,
  thoroughly understood and consistently carried
  out are key

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ROLE OF MANAGEMENT IN INCREASING PROVIDER
PRODUCTIVITY

• Monitoring staff conformity with defined
  processes is required to ensure continued
  compliance.
• Measure process time
• Measure cycle time
• Identify bottlenecks
• Review exam room utilization
• Review patient satisfaction surveys
• Directly observe patient flow
• Identify space needs of operations
• Review health center space layout
• Review provider schedules and appointment
  scheduling
• Create a continuous feedback loop that informs
  ALL parties.
• Oftentimes the best forum for communication is
  facilitated peer-to-peer interaction.

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RESULTS

• Efficiency gains (cycle time reductions) will
  yield greater productivity for all staff, better
  patient satisfaction AND improved financial
  performance.

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Benchmarking
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What is Benchmarking?
To measure according to a specified standard in
order to compare it with and improve ones own
product. The study of competitors product or
business practices in order to improve the
performance of ones own company. Benchmarking
is searching for an optimal example of a service,
product or process and using that as a minimum
target for improvement.
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Benefits of Benchmarking

• Improve processes and efficiency
• Establish specific, quantitative goals
• Improve overall management
• Eliminate backlogs
• Better control of accounts receivable
• Improved financial performance
• Establish proper staffing levels
• Achieve desired productivity
• Improve reimbursement
• Help keep operation on track

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Developing Appropriate Benchmark Criteria

• Should be comparable
• Should be based on large population
• Should be adjusted for risk
• Should be adjusted for specific factors
• Should be external and internal

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Internally Developed Benchmarks

• Days to post charges
• Registration errors to total claims
• Patient wait time
• Days to resolve denied claims

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Improving Your Revenue Cycle

• Conduct an operations review of the revenue cycle
• Detailed walk-through of processes
• Identify weakness and backlogs

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Improving Your Revenue Cycle

• Identify opportunities for improvement
• Prioritize changes needed (focus on cash flow
  improvement)
• Establish an action plan for implementation of
  best practices

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Thank You!!!!