This document provides an overview of achieving revenue cycle excellence to prepare for healthcare reform. It discusses the changing healthcare environment under reform legislation and the impact on providers. Key areas that providers need to address are reducing costs, enhancing relationships with payers, and improving reimbursement management through analytics. The presentation includes survey results on provider preparedness and case studies of organizations that improved their net accounts receivable days and registration times through process improvements and staff education. It concludes that managing patient populations and risks will be important under healthcare reform through connectivity, care management, and financial management capabilities.
1. Achieving Revenue Cycle Excellence
To Prepare for Health Reform
Jim Morrison, VP and General Manager
Revenue Cycle Solutions, McKesson
2. Agenda
Healthcare Reform: The Environment
Provider Impact
Enhancing Payer Relations
Reimbursement Management
Driving out Cost
Case Studies in High Performance
Summary and Q/A
2
4. Audience Survey
Which of the areas listed below is your
organization most prepared to address?
A. Accountable care/shared savings
strategy
B. Value-based purchasing
C. Readmissions and hospital-acquired
conditions
D. Bundled payments
E. Strategy to address newly insured patient
populations
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5. HFMA ANI 2011 Conference Survey
Please indicate your organization’s preparedness to
address the areas listed below.
Percent Indicating "Very Prepared" To Address
Readmissions and hospital-acquired
16%
conditions
Value-based purchasing 12%
Strategy to address newly insured
6%
patient populations
Accountable care/shared savings
6%
strategy
Bundled payments 1%
5
Sample size = 84
6. Four Building Blocks of ACOs
Connectivity, Engagement, Medical Home Analytics
► Actively engage patients in their care process ► Stratify populations for management.
► Provide patients with access to their pertinent ► Identity opportunities to manage cost and quality
information
► Report and act up care gaps
► Enable care coordination and connectivity
► Understand and optimize provider performance
► Enable a range of personal health management
and health information tools ► Support internal/external reporting demands
Care Management Payment Mechanics
► Leverage evidence based decisions in delivering ► Manage multiple payment models at the POC
programmatic care including traditional FFS
► Support integrated/holistic approach to ► Leverage analytics to define/ support care
managing patients across the continuum of care bundles and prepare for bundled payments
► Support integrated workflow in managing ► Tools to manage contracts and payment
cost/quality distribution logic
PCMH ACO
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7. ACO Strategic Competencies
Connectivity, Engagement, Medical Home Analytics
Connectivity Engagement Performance Analytics Network Analytics
► Interoperability ► PHR ► Operational Efficiency ► Cost & Quality
► Data Exchange ► Multi Modal Comm. ► Service Line Analysis ► PMPM Spend
► Care Coordination ► Education ► Cost Trend ► Efficiency Profiles
Communication ► Online Programs ► Attribution Logic
► Messaging ► Decision Support Population Analytics ► Benchmarking
► Notifications ► Marketing ► ID & Stratification ► Incentive Modeling
► Results ► Care Gaps Outcomes Reporting
► Referrals / Orders Transformational Services ► Intervention Outreach ► HEDIS. NQF, PQRI, IQR
Care Management Payment Mechanics
Holistic Management EBM Financial Management Payment Mechanics
►UM / DM / CM ► Assessments ► Eligibility ► Contract Repository
► Care Plans ► Medical Necessity ► Medical Policy
►ID & Stratification
► Care Guidelines ► Auto-authorization ► Payment Policy
►Medical Necessity
► Education ► Distribution Logic
►Decision Support
► Campaign Mgmt
►Readmission Mgmt.
PCMH ACO
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8. Bundled Payment
Required Capabilities
Clinical
& Claims
Data
Episode Registration
Evidenced-Based
Guidelines
Analytics
Engine
Care Management
Efficiency Profiles
Tools
Distribution Logic
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9. Bundles Payments
Success Requirements
Analytics Advanced Tools
• Operational analytics to • Utilization management tools
identify service line to reduce variation in
opportunities resources supporting
bundled payment
• Network analytics to • Integrated analysis of
operational & network
determine and track
performance against
provider efficiency in contracts
support of bundled
contracts • Care management tools to
ensure integrity of bundle
• Tools to register and trigger
• Analytics to track bundle
associated claims activity • Payment distribution logic
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10. Healthcare Reform
What’s Next?
The world will include a mixed environment:
Capitation/fee for service, risk sharing
The world will be a heterogeneous one: Medical
homes, legacy systems and significant
investments, clinics, labs, doctors’ offices, unique
payer relationships, unique employer
relationships, consumer driven
healthcare, regulatory reform, analytics to drive
down cost, population management, increased
demands and shrinking reimbursement … all
coming by 2014
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11. Healthcare Reform
What’s Next?
Population Management Changes in Care Settings
• Analytics supporting the ID • Hospitals expanding footprint
and risk-adjusted stratification to non-traditional settings
of a population of patients • Connectivity between all care
• Integrated analysis of clinical settings – clinical & financial
and claims data – is essential
• Tools to intervene to address
gaps in care
• Reporting tools to define and
report on metrics
• Profiling tools to assess
provider efficiency and
optimize performance
11
12. Agenda
Healthcare Reform: The Environment
Provider Impact
Enhancing Payer Relations
Reimbursement Management
Driving out Cost
Case Studies in High Performance
Summary and Q/A
12
13. Provider Impact
The Changing Landscape
Reduced Payment Reform Quality
Reimbursement & Evolution Improvement
• Fee-for-service • Pay for • Pay for
payments cut performance performance
• Commercial • Bundled • Public reporting
payers driving payments measures
to Medicare • Capitation • Meaningful use
levels • Shared savings • Enterprise care
management
ICD-10 Transition
13
14. Agenda
Healthcare Reform: The Environment
Provider Impact
Enhancing Payer Relations
Reimbursement Management
Driving out Cost
Case Studies in High Performance
Summary and Q/A
14
15. Audience Survey
Are you talking with any of your payers about
how the health reform changes will affect
your relationship?
A. Yes, we’re meeting regularly
B. Yes, we’re in the early stages of discussion
C. No, but we have plans to meet
D. No, with no plans to meet
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16. Enhancing Payer Relations
• Holistic view of the patient
Collaboration & • Match clinical & claims data
Information • Reduce administrative costs with
Sharing automation
• Regular educational updates from payers
• 5010 allows more information sharing
5010 & ICD-10 between provider and payer
Transition • Cleaner claims results in fewer denials
Advantages • Collaborate with your payers on contract
reviews prior to ICD-10 transition
16
17. Agenda
Healthcare Reform: The Environment
Provider Impact
Enhancing Payer Relations
Reimbursement Management
Driving out Cost
Case Studies in High Performance
Summary and Q/A
17
18. Reimbursement Management
Complexities and Mechanics
Provider-based Physicians Contracting and
Understanding Cost
•Single source to track and •Medicare 72-hour window
manage patients •Underpayment management
•Historical view of payments
Disparate information Analytics to understand
management systems performance
•Acute and Ambulatory billing • Cost of care, quality of
integration care, spend per-member per-
•Case Management/Length of patient
stay control • Provider efficiency
• Benchmarking & Incentive
Modeling
• Reporting to regulatory bodies
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19. Agenda
Healthcare Reform: The Environment
Provider Impact
Enhancing Payer Relations
Reimbursement Management
Driving out Cost
Case Studies in High Performance
Summary and Q/A
19
20. Driving Out Costs
Strategies and Opportunities
Big focus on clinical IT comes from ARRA
Strengthen your revenue cycle processes by
using your IT system to the full extent
─ Process flow improvements
─ Organizational changes and improvements
─ Technology plan to improve results
Optimize to drive to the best practice for each
area
Reduce total cost of ownership for IT
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21. Audience Survey
What process do you use today to confirm
patient identity?
A. Photo ID
B. Photo ID and insurance card
C. Biometrics
D. Other
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22. Driving Out Costs
Patient Identification Management
Medical Identity Theft is one of the fastest
growing crimes in the U.S.
An estimated 1.4 million adults, approximately
5.8% of the U.S population, were victims of
medical identity theft in 2009.
Biometrics identity confirmation
can ensure the right patient
receives the right care
22
* According to the National Survey on Medical Identity Theft prepared by Ponemon Institute in 2010
23. Agenda
Healthcare Reform: The Environment
Provider Impact
Enhancing Payer Relations
Reimbursement Management
Driving out Cost
Case Studies in High Performance
Summary and Q/A
23
24. Audience Survey
What are your current net accounts receivable
days?
A. 40 days
B. 41 – 45 days
C. 46 – 50 days
D. 51 – 55 days
E. 56 days
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25. Case Study
Mississippi Baptist Health System
Staff education on IT and processes
HIS table updates to align with best practices
Process improvement for point of service collections
Key Statistics and Accomplishments
Net Cash collection increase of $10,237,193
Denial write-offs decreased by 45%
Point of Service cash collections increased by 15%
A/R days decreased from 36 to 34 (well below HFMA target)
Failed claims decreased by 24%
Adjustments decreased by 1.37%
Staff HIS education test results improved from 59% to 87%
550 licensed beds. Project statistics run from November 2009 - December 2010.
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26. Audience Survey
What is your average time for patient
registration to be completed?
A. 10 minutes
B. 11-15 minutes
C. 16 minutes
26
27. Case Study
Spartanburg Regional Medical Center
Streamlined insurance master tables
Established electronic remittance advice for each
payer
Standardized graphical user interface for registration
staff
Key Statistics and Accomplishments
Decreased A/R days by 8 days
Record breaking cash collections – more than $30M
Reduced unbilled accounts from $58 million to $30 million
Reduced failed claims by $6M
Increased admission speed 30% and improved admissions accuracy 50%
Three facilities included: Spartanburg Hospital: 568 licensed beds; Village
Hospital: 48 licensed beds; Restorative Care: 84 licensed beds
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28. Agenda
Healthcare Reform: The Environment
Provider Impact
Enhancing Payer Relations
Reimbursement Management
Driving out Cost
Case Studies in High Performance
Summary and Q/A
28
29. What’s Next?
Managing Populations and Risk Under Health Reform
Connectivity & Engagement Care Management
► Interoperability with identity ► Cross-continuum, patient
management centric care plan
Care Management
► Patient communicationFinancial Management► Quality and Evidence
Connectivity & Aggregation
Analytics / DataEngagement
► Engagement Model ► Holistic disease management
► Cross-continuum, patient
► Eligibility
Interoperability with identity
Performance evaluation
centric care plan
► Payment mechanics
management
Population analysis
► Quality and Evidence
► Disbursement Management
Patient communication
Network analysis
► Holistic disease
Engagement Model
► Outcomes reporting Financial Management
Analytics / Data Aggregation
management
► Performance evaluation ► Eligibility
► Population analysis ► Payment mechanics
► Network analysis ► Disbursement Management
► Outcomes reporting
29
30. What’s Next?
Managing Populations and Risk Under Health Reform
Connectivity & Engagement Care Management
► Interoperability with identity ► Cross-continuum, patient
management centric care plan
► Patient communication ► Quality and Evidence
► Engagement Model ► Holistic disease management
Analytics / Data Aggregation Financial Management
► Performance evaluation ► Eligibility
► Population analysis ► Payment mechanics
► Network analysis ► Disbursement Management
► Outcomes reporting
30
McKesson sponsored a survey at the ANI conference this year. The results will be published in an upcoming issue of HFM magazine, but here’s a preview. This was the result of the same question when asked of attendees. I’d like to zero in on the two areas organizations felt least prepared for – ACOs and Bundles Payments.
The capabilities align around 4 strategic competencies or building blocks for achieving accountable care and include:Connectivity, Engagement, and Medical Home – creating an information infrastructure to supports the critical relationship between patients and primary care physicians and which serves to engage and active the patient in their care is fundamental to achieving accountable care.Analytics – supporting operational, population, and network insights creates an informed and actionable culture.Care Management – providing an integrated and holistic approach to population management across the care and wellness continuums.Payment Mechanics – to support evolving payment models and risk arrangements.
As you consider each building block, additional detail is provided, defining specific features and functionality within each building block or strategic pillar. For example in the analytics pillar, operational or performance analytics lays the foundation for bundled payment by providing insights into the service line performance and cost trend analysis. Population analytics includes population identification and stratification while exposing gaps in care and providing tools for outreach to both patient and provider to assist in closing those gaps. Network analytics provides the tools required to hone efficiency resulting in an optimized and highly performing network.
Identifying who is eligible for inclusion in a bundle begins with the application of medical and payment policy (evidenced based guidelines) which in turn allows us to enroll and tag an individual as participating in a bundle. An identifier is appended to their record which allows claims associated with that identifier to be grouped as part of the bundle and ultimately to have payment distributed accordingly.As the patient moves through the care process, keeping the patient on track with best practice is key. Care Management tools support that efforts and allow for rapid identification of negative trends for course correction ensuring optimal clinical and financial outcomes.
Just like ACOs, Bundled Payments also requires a number of success requirements which include:Operational analytics to identify those service lines which are strong margin performers and those which are not. Network analytics identifies those providers which can most ably/efficiently support bundled payment programs.The combination of clinical and claims data to drive analysis of performance against contract.Utilization management tools to reduce practice variation and drive overall network performance.Care Management tools assist in keeping patients on plan and identifying negative trends for rapid course correction.Episode registration and triggering.Analytics to track claims associated to the bundle.Payment distribution logic to assist in breaking down the bundle and distributing payment to participants.
Reduced reimbursements – combined with coverage expansion will drive focus on cost controlQuality improvement initiatives – partly owned by clinical thought leadership, however has implications on reimbursementsTouch on the need to tie all the efforts to meet ARRA into ICD-10 transition
Most contracts will need to be updated for ICD-10; Collaborate with your payers on ICD-10 being revenue neutral for both partiesWith 5010, payers will send more information back to the provider at eligibility checking; so since more information is available to the provider at eligibility check, you’ll have cleaner claims. There is opportunity but be mindful of the effort the transition will take. Take the next step in working with your payers to discuss their readiness
Push EMR vendors to provide integration with PM systems, so that claims go out coordinated.
Reducing total cost of ownership – computer assisted coding can reduce the denial rate. Systems and optimization; reducing number of applications and streamlining. Hardware and technology.
The first palm vein scanning system made its debut at the 2006 Healthcare Information and Management Systems Society (HIMSS) annual meeting in San Diego. The year before, the technology had begun to be adopted in Japan for ATM machines and for other financial transactions by Japan's banking industry.Carolinas HealthCare System:2007 implementation of biometrics palm scanning97% adoption by patientsCurrently 1.2 million patients enrolled Largest biometric database in the world
McKesson’s calculation goal is 45 days or less. Overall 2011 HFMA MAP Award application statistics for net days in A/R:Median –40.30Top quartile –35.6Top Decile – 31.6
The optimization team first updated all of the tables in the HIS system to bring them in line with best practices. Then, a host of new functions including electronic remittance advice processing, pre-bill edit and price estimation were put into play. The team also worked to improve processes in various areas such as point-of service collections, emergency department patient throughput, denial prevention and charge reconciliation. Perhaps most importantly, though, the optimization team worked with staff to provide additional education in a variety of areas such as patient processing, patient accounting and contract management functionality.
Target KPI’s as published in HFM Journal – registration interview should take less than 10 minutes.
The insurance master tables, were not built to streamline the registration staff’s workflow. The optimization team reduced the number of categories that staff had to review to verify insurance, thereby improving ease of use and speeding registration and patient flow throughout the hospital. In addition, staff members were manually processing payments for each individual account. To improve this process, the optimization team established electronic remittance advice functionality for each payer. So, instead of manually posting an individual payment for each account, the amounts are now posted automatically and staff members only need to become involved when specific problems warrant attention. Registration staff were bypassing fields in the registration process. Adding a standardized graphical user interface has helped to improve efficiency. Because the system is now so intuitive, staff members know exactly what information they need to enter. Staff members hadn’t been leveraging the system’s pre-bill editing function. Now they are catching – and correcting – errors before claims are being released for billing. Perhaps most importantly, the analysis illustrated the importance of getting users up to speed on the system’s functionality.
Connectivity – Interoperability and Data Exchange WITHIN AND OUTSIDE THE NETWORK with PATIENT IDENTITY MANAGEMENT, EXPANDED PATIENT COMMUNICATION (messaging, notifications, results, referrals/orders) and EXPANED ON-LINE SERVICES (PHR, multi-modal communications, education, online programs, decision support for the patient).Performance Analytics Understand overall operational efficiency and service line performance, ANALYZE POPULATIONS – identify patients, stratify risk, understand where intervention is required in the community, identify care gapsNETWORK ANALYSIS – to understand cost of care, quality of care, spend per-member per-patient, provider efficiency, Benchmarking and Incentive ModelingOUTCOMES REPORTING to regulatory bodies: HEDIS, NQF, PQRI, IQRCare Management- PATIENT-CENTRIC CARE – across the Hospital, Physician Office, and Homecare / Hospice. DELIVER QUALITY CARE that is EVIDENCE-BASED. MANAGE DISEASE ACROSS THE CONTINUUM – identification of risk, have method to connect to patients and provide Decision SupportFinancial Management – identify ELIGIBILITY for service, figure out how to manage MEDICAL NECESSITY in the new world of reform, OPTIMIZE REVENUE AND MANAGE BUNDLED PAYMENT MECHANICS.
Connectivity – Interoperability and Data Exchange WITHIN AND OUTSIDE THE NETWORK with PATIENT IDENTITY MANAGEMENT, EXPANDED PATIENT COMMUNICATION (messaging, notifications, results, referrals/orders) and EXPANED ON-LINE SERVICES (PHR, multi-modal communications, education, online programs, decision support for the patient).Performance Analytics Understand overall operational efficiency and service line performance, ANALYZE POPULATIONS – identify patients, stratify risk, understand where intervention is required in the community, identify care gapsNETWORK ANALYSIS – to understand cost of care, quality of care, spend per-member per-patient, provider efficiency, Benchmarking and Incentive ModelingOUTCOMES REPORTING to regulatory bodies: HEDIS, NQF, PQRI, IQRCare Management- PATIENT-CENTRIC CARE – across the Hospital, Physician Office, and Homecare / Hospice. DELIVER QUALITY CARE that is EVIDENCE-BASED. MANAGE DISEASE ACROSS THE CONTINUUM – identification of risk, have method to connect to patients and provide Decision SupportFinancial Management – identify ELIGIBILITY for service, figure out how to manage MEDICAL NECESSITY in the new world of reform, OPTIMIZE REVENUE AND MANAGE BUNDLED PAYMENT MECHANICS.