Revenue Cycle Management
Revenue Cycle Management Becoming a patient focused but metrics drivenRevenue Cycle team Presented by:Kimberly MooreDirector, Health Care Revenue Cycle ebai lly.com1
Revenue Cycle Metrics:www.eidebai lly.com2
Why Measure?www.eidebai lly.com
Why Measure? The old saying is correct: “What get’s measured, get’s improved”Providing managers and staff with accurate, intuitive and easilyinterpretable data is one-third of the recipe for improvement. The otherkey ingredients are alignment with strategic objectives and a system foraccountability.Accurately implement those items that will drive improvement vs.implementing for implementation sake.Heightened awareness of accountability and transparency whencommunicated at the proper levels with in the team.To move from, not just Good to Great but from Great to Excellent!!!www.eidebai lly.com
Reflect for a moment: Do you ever look at your Revenue Cycle and askyourself: How do top performing hospitals become top performinghospitals? How can I ensure the best quality processes are inplace? How can I engage leadership and my team to movetoward the same goals? The simple answer – MEASURE TO IMPROVEbut remember measurement with out accountabilityis ineffective.www.eidebai lly.com
How to get started? Educate first - help your team understand yourdirection. Define: Never assume that everyone understands theacronyms you might use. Remember not everyone understands metrics or how theyeffect their performance. Get feedback from the team – they know theirchallenges and have ideas about what they would like tohave improved.Identify those metrics that you will measure andcommunicate them with your team.Always explain ‘Individual Accountability’ – what can they do tohelp improve. What will happen if they do not. Tie Process improvement to incentives. www.eidebai lly.com
Healthcare Must haves!1.2.3.4.5.Empower self service data accessAggregate all data sourcesProvide data drill down withindashboardIdentify trends and actReward data driven action and factsharingwww.eidebai lly.com
Influence the Culture Revenue Cycle Leaders that influence a culture, driven byperformance standards, backed by real data, createpositive change.Leaders that share realistic goals with their teams and helpthem understand: How their goals are establishedHow Individual Accountability is just as important to ones self as it isto overall good of their team and the hospital over-all.That to support the team, management will have real-time coursecorrection plans to influence improvement.That progress will be measured daily/weekly/monthlyThat Management will Report positive as well as negative resultswith Senior Leadership as well as the entire team.That there will be accountability for all actions taken and thosemissed.Everyone can be a “leader” for change.www.eidebai lly.com
User community adoption – viral use!“ The old approach to business intelligenceconfirms what we know. Now departmentsthroughout the hospital can ask the question,‘What am I trying to accomplish?’ and explorewhat they don’t know.”-Ted Corbett, Director of KnowledgeManagement, Seattle Children’s Hospitalwww.eidebai lly.com
Senior LeadershipIn High Performing Hospitals’ SeniorLeadership publicly support the notion that theRevenue Cycle is not a “money thing” it is ahospital wide responsibility as well as a patientresponsibility. When leadership shows support, positivechange can happen. Invite your CFO to yourmeetings.CFO’s attend when you can. www.eidebai lly.com
Organizational StructureStructure Do you have a functional organizational structurewith Key Revenue Cycle leaders?Has the structure been clearly communicated tostaff?Does leadership support the Revenue Cycle’soperating model and objectives?Are the Revenue Cycle objectives in line with thefacilities strategies?Does Leadership communicate expectations,opportunities and successes with the staff?www.eidebai lly.com11
What to Measure: Pre-Reg. Rates andDays Revenue Financial ClearanceOutstanding Registration accuracy Net Revenue outstanding Ins Verification Rates Gross to Net Revenue Ratio Service Auth. Rates Un-collectibles POS Cash Collections Days from Discharge to Bill POS – Prior Balance collection % Aged AR from Discharge Cash Collections as % Net /Gross Self Pay Revenue and Self PayAR SP Conversion Rates Medicare, Medicaid Managed DNFBCare, Other Sources Revenue DNSPand AR Late Charges # of Open Accounts and per Creditscollector Case Mix Cost to Collect Payer Mix Denials % GR Patient Satisfaction scores Denial over-turned % Vendor (Net Back %) Payer Rejects as % of Remitwww.eidebai lly.comRevenue processed Gross
MeasurementsMetric/BenchmarkGross DaysRevenueOutstandingBenchmark: 60 days2. Gross % ofRevenue as UncollectibleBenchmark: 5%3. Days fromDischarge to billBenchmark: 10 days4. A/R 90 daysBenchmark: 25 daysor LessHospitals Nationwide1.49.73 Days5.37%13.12 Days24.33 Dayswww.eidebai lly.com
MeasurementsMetric/BenchmarkHospitals Nationwide5. % A/R in SP17.11 %6. % Gross SP Revenue5.03 %7. % A/R MDCR29.88 %8. % Gross MDCR Rev.42.50 %9. % A/R MDCD12.43 %10. % Gross MDCD Rev.12.50 %www.eidebai lly.com
MeasurementsMetric/BenchmarkHospitals Nationwide11. % A/R Commercial12. % Gr. Commercial Rev8.20 %6.16 %13. % A/R Managed14. % Gross Managed Rev25.48 %27.02 %15. % A/R Other16. % Gross Other Rev9.54 %4.86 %www.eidebai lly.com
MeasurementsMetric/BenchmarkHospitals Nationwide17. Avg. # of Beds18. Open IP Accounts19. Open ER Accts20. Open OP Accounts21. Claims Billed/Mo22. Cost to collect/ 246 Beds3618 Accts7921Accts32,557 Accts16,849 claims2.43 cents23. Net A/R60.15 Days24. % Gross Denials25. % Net Denials26. Days Credits0.09 %0.22 %0.66 dayswww.eidebai lly.com
Become a Metric Driven Organization(BYODB) Before You Open Daily Business This is both a tool and an advanced approach forMeasurement of daily KPI’s This tool is used daily at a payer level This document is used to guide each functional areaof the Revenue Cycle BYODB manages away “surprises” that wouldnormally create chaos for Finance and the RevenueCycle Team at month end.Examples: Turn over rates, Net Days to Target days, DNFB to target, Cash to target, Cash AccelerationOpportunities, Net to Gross %, Conversion rates, Erosion Rates to target, Contractual to Target, CWOT, POSto total Cash and to total expected, % of financially cleared accounts prior to admission www.eidebai lly.com17
Key RatiosMonth/YrUB:FB as %Gross RevRatioConversionRate: UB:FB%ConversionRate ofGrossRevenue %Adj. as % ofConversion RateNet Net A/RFactorBeginning ofMonthIncome StatementImparativesNet NetARFactorMTDBad DebtNovember-09102.2%98.3%100.4%52.6%56.8%54.6%BD September-0996.5%102.3%98.7%58.2%56.8%54.3%BD RecoveriesBD LessRecoveries/ 8%Delayed CashOpportunity Do toUnbilled beyondsuspenseDays in CreditBalancesMedicareNet DaysSelf PayNet DaysGross DaysNet DaysDNFB NetDays51.564.89.6 1,904,836tbd37.9443.453.266.69.7 1,471,617tbd24.5441.949.963.410.9 1,909,272tbd23.9465.249.663.87.6 1,647,177tbd30.3477.1tbdtbdtbdtbdIncome Stmt & CashCash MTDOctober-09September-09August-0911.6%Gross Denial RateDenial RecoveriesNet Denial RateNet Denial ImpactDays in Revenue OutstandingNovember-09 65,802.00DenialsNote s:Month/Yr 1,483,606 4,722,016.00Cash TargetVariance MTD 9,049,682.00 4,327,665.00Rolling Target 6,033,121.00Cash MTDRolling VarianceNote s:- 1,311,105.00Other Operating StatisticsMonth/YrRevenueADGRADNRGross A/RNet A/RNet toGross %Adj. As %of Gross BD as % GrossRevneue RevCharity CareAdj as % GrossAR 90 as %RevA/R 90 as total A/RNovember-09 12,834,442 764,193 331,647 40,563,954 22,149,71554.6%52.8%11.6%2.1% 13,805,09635.5%October-09September-09 22,755,934 22,611,000 764,193 786,947 331,647 342,353 40,532,916 39,828,655 22,194,385 22,025,54754.8%54.3%56.2%57.5%3.6%2.6%1.3%2.0% 14,016,461 13,774,46236.3%34.6%Note s:
Business Intelligence Impacts!1. Hospitals have uncovered underlying, recurringissues with claims processing that have let themproactively identify claims that need a differentlevel of attention to be processed on time.2. Clinics have uncovered service providers whoare not assigning correct services and takencorrective action.3. Physicians running studies are identifyingpatients who not only have not been adheringto protocols, but glean insight as to the possiblereasons behind this to take action.
Scenario– Hospital Profitability
Charges vs. Collections
Charge Detail Information
Front End : Revenue Cycle MetricsPre-Registration Rate:This indicator will show the timeliness, accuracy and efficiencies of your PatientAccess processes. To Pre-Register an account allows the facility to gather dataprior to the patients appointment date. It also allows for a more timely registrationprocess and patient flow at the time of service.Equation:# of patient encounters pre-registered# of scheduled patient encountersInsurance Verification Rate:This indicator also shows the timeliness, accuracy and efficiencies of your PatientAccess processes. Insurance regulations, changes in coverage and employer costcutting initiatives are just a few issues that are uncovered during an insuranceverification encounter. Discussions with the carrier and/or the patient prior toservices rendered can eliminate issues on payment receipt on the back end of therevenue cycle where you are less likely to be able to collect.Equation: Total number of verified encountersTotal number of registered encounterswww.eidebai lly.com
Front End: Revenue Cycle MetricsService Authorization Rate:This indicator also shows the timeliness, accuracy and efficiencies of your PatientAccess processes. Many carriers require Authorization be obtained prior toservices being rendered. This indicator will reflect only those services that are onthe schedule. Keep in mind that if changes are made in the clinical setting with outnotice to the Authorization team, you may need to implement a new process.Equation:number of encounters authorizednumber of encounters requiring authorizationCash Collection as a % of Adjusted net Patient Service Revenue:Indicator to accurately report effectiveness for converting Patient Service Revenue intoCash. The Value of this indicator is it indicates fiscal integrity/financial health of thefacility.Equation:Total Cash CollectedAverage Monthly Net Revenuewww.eidebai lly.com
Front End: Revenue Cycle MetricsPoint-of-Service (POS) Cash Collections:Trending of POS efforts. Implementation of POS Collections should be considered ateach facility. The Value of this measurement is to identify potential exposure to BadDebt, accelerates cash collections, and can reduce collection costs. POS might bedefined as any payment received Prior to, at or with in 7-10 business days post Dateof service.Equation: POS Payments ReceivedTotal patient cash collectedPre and Point of Service Self Pay A/R Collections:This metric may take a bit more manual figuring, however, it is an indicator that theRevenue Cycle team is taking a holistic approach looking at past accounts andcreating “Consumer Accountability”Equation:Total Cash Collected on A/RTotal in Self Pay A/R for scheduled patientswww.eidebai lly.com
Middle: Revenue Cycle MetricsLate Charge as a % of Total Charges:A measurement of revenue capture efficiency. The Value is to identifyopportunities to improve revenue capture, reduce unnecessary costs, enhancecompliance, avoid write offs and rework and accelerate cash flow.Equation: Charges with Post Date greater than three days from last service dateTotal Gross ChargesDays Revenue in HIM:Dollar amount of receivables delayed in medical records as seen as average days ofrevenue.Equation:Dollar amount in receivables delayed in HIMAverage daily revenueUnbilled Beyond Suspense:Within the DNFB receivable is a sub-set of accounts that have moved beyond thetarget date for FB. (Suspense Dates). These receivables represent a direct delay incash conversion opportunities. This amount tends to represent the exact co-efficientof any cash short fall being expressed during the month.www.eidebai lly.com
Middle: Revenue Cycle MetricsDischarged Not Final Billed (DNFB) Rate:This is an indicator of charts that have not yet been finalized coding, documentationdeficiencies, physician queries etc. a charts on hold report should be reviewed toidentify coder performance, provider performance, departmental performance(charges not entered timely), system issues that are causing charts to remain on holdvs. moving to your billing department and/or your business office may be slow inbilling claims. It can identify performance issues impacting cash flow.Equation: Gross Dollars in A/R (Not Final Billed)Average Daily Gross RevenueAverage Discharge to Bill time:Discharge to Final Bill Days. Be sure to factor in any delays with in your editor. Usein-patient claims only.Medicare Equation:All others Equation:Average # of calendar days from Discharge to Billing MedicareAverage # of calendar days from Discharge to Billing Otherswww.eidebai lly.com
Middle & Back: Revenue CycleMetricsDischarged not Sent to Payer (DNSP) Rate:This indicator is used to identify claims that have not been sent to the payer. Itincludes (FBNE) Final Billed Not Edited (bills held in your claim editor for variousreasons) and DNFB accounts.This equation is not always identified in your host system, in some cases the accountwill show as billed but is actually stuck in your editor. Be sure to pull reports from yourClaims Editor system.FBNE as % of total claims: FBNE: Total # Claims on Hold in EditorTotal # of claims submittedPlusDNFB as % of Gross Revenue: Gross Dollars in A/R (Not Final Billed)Average Daily Gross RevenueDNSP:Total Gross Discharged Unbilled (DNFB FBNE )Average Daily Gross Revenuewww.eidebai lly.com
Back End: Revenue Cycle MetricsNet Days in A/R:Indicator to show overall A/R Performance. This can be performed by payer orfinancial class as well.Equation: Net Accounts Receivable (A/R)Average Daily Net Patient Service RevenueNet Days Revenue in Credit Balance:Indicator to accurately report account values, ensure compliance with regulatory requirements,and monitor overall payment system effectiveness. The Value of this indicator is whether creditbalances are being managed to appropriate levels and are compliant to regulations.Equation:Dollars in Credit BalancesAverage Daily Net Patient Service Revenuewww.eidebai lly.com
Back End: Revenue Cycle MetricsFinancial Class or payer AR as a % of Total AR:This metric will show you well performing payers and those that may need to bereviewed. At a minimum Revenue Cycle leadership should meet with top payers todiscuss process and payment improvement. Be sure to have either feedback orpersonal representation from those who work closest with the payer.Equation: Total amount in Self-Pay:Medicare:Medicaid:Managed Care:Commercial:OtherTotal ’s in Open A/RAged Accounts Receivable as a % of Billed A/R:This indicator is used to identify receivable collectability and indicates the revenue cycle’s abilityto liquidate A/R. This can also be used to identify Payer or financial class %’s.Equation: 30, 60, 90, 120 daysTotal Billed A/Rwww.eidebai lly.com
Back End: Revenue Cycle MetricsAverage Daily Gross Revenue:Equation:Gross RevenueDays in a quarterGross Days Revenue Outstanding:Equation:Total amount in open A/RAverage Daily RevenueCost To Collect:Operational Performance with in the Revenue Cycle. Indicates efficiency and productivitywith in the processes. It is recommended that you include: staff members performinginsurance billing and verification, patient account representatives, cashiers and cashapplication staff, refund staff, financial counselors, pre-registration, pre-certification, andPOS registration staff, collectors, managers and supervisors involved in these areas. Besure to include temporary staff costs and outsourced costs. Do not include UR, coding,HIM.Equation: Amount of Total YTD Revenue Cycle Expenses Amount of Total Cash Collected YTDwww.eidebai lly.com
Self Pay: Revenue Cycle MetricsTotal Un-collectibles:This indicator will show the total dollars for services rendered that were notcollectable. It is an indicator that shows both exposure to Bad Debt and theimportance of a Pre-Service Financial Clearance process.Equation:Total Gross ’s of Bad Debt CharityTotal Gross Revenue YTD*Avoidable Denials can be grouped here as wellCharity as a % of Uncompensated CareMonitor Charity Care Versus Bad Debt. The Value is a reflection of communityservice.Equation:Charity Care Write-off amountTotal uncompensated care (Bad Debt Charity Care)Conversion Rate of Uninsured Inpatient to Payer Source:Trending indicator of qualifying uninsured inpatients for a funding source. The ValueIndicates the facilities ability to secure funding for uninsured patients.Equation: Total number of cases approvedTotal uninsured inpatient dischargeswww.eidebai lly.com
Self Pay: Revenue Cycle MetricsBad Debt:Trending indicator of the effectiveness of Self-Pay collection efforts and financialcounseling. It indicates the facilities ability to collect self-pay accounts and identifypayer sources for those who can not meet their financial obligations.Equation:Total Gross ’s of Bad Debt Write-OffsTotal Gross Patient Service Revenue (YTD)Charity Care:Indicator of community’s ability to pay. It shows services provided to patients thatwere unable to pay.Equation:Total Gross ’s of Charity Care Write-OffTotal Gross ’s of Patient Service Revenue (TYD)www.eidebai lly.com
Staff: Revenue Cycle MetricsStaff Ratios:A/R Accounts per Biller FTEEquation:Total Open AccountsNumber of BillersTotal Claims per Biller FTEEquation:Claims Billed per MonthNumber of BillersTotal Accounts per Collector FTEEquation:Total Open AccountsNumber of CollectorsBusiness Office open accounts per FTEEquation:Total Open accountsTotal A/R Management FTEwww.eidebai lly.comHFMA MAP Keys
DisclaimerThese seminar materials are intended to provide the seminarparticipants with guidance in Health Care Revenue Cyclematters. The materials do not constitute, and should not betreated as professional advice regarding the use of anyparticular Revenue Cycle technique or the consequencesassociated with any technique. Every effort has been made toassure the accuracy of these materials. Eide Bailly LLP. andthe author do not assume responsibility for any individual'sreliance upon the written or oral information provided duringthe seminar. Seminar participants should independently verifyall statements made before applying them to a particular factsituation, and should independently determine the correctnessof any particular insert subject matter planning techniquebefore recommending the technique to a client orimplementing it on the client's behalf.www.eidebai lly.com35
Revenue Cycle team Revenue Cycle Management Presented by: Kimberly Moore Director, Health Care Revenue Cycle Consulting 701.239.8673 . Cash Collection as a % of Adjusted net Patient Service Revenue: Indicator to accurately report effectiveness for converting Patient Service Revenue into
Strategies to Optimize Your Pharmacy Revenue Cycle 9/2/2020 5 Presentation Outline 1. Optimal Revenue Cycle Management Program 1. Creating a case for a revenue cycle program 2. Revenue cycle program structure 3. Involving pharmacist leadership 4. Put a revenue cycle program to practice 2. Revenue Improvement and Preservation Strategies 1.
REVENUE CYCLE SOLUTIONS To request a custom scorecard for your facility, or to learn more, contact us today at: RCSAnalytics@AMNHealthcare.com AMNH1010023 rev 10-20 About AMN Healthcare Revenue Cycle Solutions AMN Healthcare Revenue Cycle Solutions is the industry's most experienced mid-revenue cycle provider. We use business intelligence
Overview of the Revenue Cycle 4 The Healthcare Financial Management Association (HFMA) defines a revenue cycle as "All administrative and clinical functions that contribute to the capture, management, and collection of patient service revenue." 1 The Revenue Cycle begins with Medical Record / Encounter creation, and ends with Collection / Write-off.
A successful revenue cycle is a complex process which involves multiple areas of your organization requiring constant interaction. THE REVENUE CYCLE. . Discharged Not Final Billed -DNFB 5 days of average daily revenue: Credit Balances 1 day of daily revenue: Denial Write-Offs 1% of monthly net revenue: Point of Service Collections
RFP - H21-0026, Revenue Cycle Service Provider H21-0026, Revenue Cycle Service Provider Page 5 of 16 4. Scope of Services CCH seeks to identify a competitive and qualified contractor to provide end-to-end revenue cycle services and detail reporting on performance and outcomes. This service will provide additional support in all areas of revenue .
Emdeon Revenue Cycle Management Solutions Emdeon is transforming the industry with a 360 degree approach to revenue cycle management enabling providers to get paid more, faster. Emdeon does this by automating the four components of the revenue cycle: Patient Access, Insurance and Third-Party Claims, Insurance and Third-Party Remittance &
Nym convened an expert panel of health information and revenue cycle management (RCM) experts to explore the implications of revenue cycle automation. The panel discussed how organizations can build the case for revenue cycle automation, assessing the impact on clinical and non-clinical workflows, as well as future use-cases. 2
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