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9/28/2015. HFMA s Patient Friendly Billing Focus. Initiatives: Best Practices. Agenda. Iowa Hospital Association Annual Meeting October 6, 2015


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HFMA’s Patient Friendly Billing 


Best Practices

Iowa Hospital Association Annual Meeting October 6, 2015

Sandra Wolfskill, FHFMA Director – Healthcare Finance Policy HFMA


• Meet Jack! • HFMA’s Patient Friendly Billing Focus • Learning from High Performing Revenue Cycles • Q & A 2

Jack’s Story …

• This is the story of Jack, a man with a sinus  infection, and his encounters with the healthcare  system ...



“Hope is not an effective strategy for change.”

‐Tom Atchison

The Patient Friendly Billing® project promotes clear, concise, and correct  patient‐friendly financial communications.  • Featured ReportsReconstructing Hospital Pricing Systems – An overview of the hospital  pricing system, its evolution, and the objectives driving pricing system  reform • Consumerism in Health Care: Achieve a Consumer‐Oriented Revenue Cycle  Providing patients timely estimates, communicating about financial  assistance, and other consumer‐focused practices • Strategies for a High‐Performance Revenue Cycle – Ready‐to‐use ideas and  critical practices for implementing and achieving revenue cycle excellence • Patient Friendly Billing e‐Bulletin • HFMA's Patient Friendly Billing e‐Bulletin, sponsored by Emdeon, provides  practical how‐to strategies and information for improving patient financial  communications, achieving transparent pricing, and creating a more patient‐ friendly revenue cycle.

HFMA’s Patient Friendly Billing Project


Highly Effective Habits

Research Has Shown that High‐Performing Revenue Cycles Focus on Six Key Areas Patient Friendly Billing Project Research  Report  People  Processes  Technology  Metrics  Communication  Culture Key Revenue Cycle Competencies


Patient Friendly Billing



People Processes Technology Metrics Communication Culture C‐Suite Set high expectations for  revenue cycle  positions Devote  organizational  resources to  improved training  and compensation Develop &  participate in  intraorg. teams  around revenue  cycle Use patient  experience as  cornerstone for  setting revenue  cycle strategy Appreciate  community  dynamics and  those with greatest  impact to the  organization when  prioritizing tech  needs Encourage improved  monitoring of rev  cycle processes  through use of  traditional and non‐ traditional metrics Develop & enforce  systems of  accountability  around monitoring  and reporting  Support organizational  alignment around  clear, correct and  patient‐friendly  messaging Set clear and  transparent financial  assistance policies &  procedures Demonstrate  value for the  revenue cycle  through  significant  commitment of  time and  resources Establish  systems to  reward high  revenue cycle  performance Revenue  Cycle  Leadership Apply high  standards to hiring Emphasize  education Take a career  approach to  revenue cycle  positions Leverage  compensation and  work arrangements  for employee  satisfaction Use formal  structures to  obtain stakeholder  input Target revenue  cycle  improvements  around the  consumer’s  experience Adopt established  improvement  methodologies incl.  those not  traditionally used  in healthcare Selectively use  technology for  interactions with  customers Manage for  investment value Dedicate IT staff to  the revenue cycle Measure and report  frequently Look beyond  traditional metrics  for success Seek the consumers  perspective Drive a positive  sched/reg experience Provide estimates of  financial obligations Promote financial  assistance Support clear & simple  billing & collection  materials Recognize importance  of external  communications Support rev  cycle at highest  level Garner  appreciation for  rev cycle from  nonfin staff Find purpose  through the  patient Demand high  performance Make innovation  a priority Source:  Strategies for a High‐Performing Revenue Cycle, HFMA, 2009, p4 7 • Establishing high standards for hires • Devoting significant resources to  education • Taking a career approach to revenue  cycle positions • Leveraging compensation & work arrangements for  employee satisfaction 8

People – Successful Strategies

• Adopting formal process improvement methodologies • Targeting improvements around revenue cycle areas  affecting the consumer’s experience • Using formal structures to obtain stakeholder input: • Organization • Consumer • Physician • Payer

Processes – Successful Strategies


• Selectively using technology for  interactions with customers • Managing for investment value

• Ensure solid processes are in place prior to seeking automation fixes

• Dedicating IT staff to the revenue cycle 10

Technology – Successful Strategies

Define multiple levels of metrics

–Strategic –Operational –Individual

Actionable data

Commitment to action




Metrics– Successful Strategies

• Supporting a positive scheduling/ registration experience • Providing estimates of financial obligation • Publicizing financial assistance • Supporting clear and simple billing & collections  materials 12

Communication – Successful  Strategies


Every day, healthcare professionals conduct sensitive  financial discussions with patients. But there have been  no accepted, consistent best practices to guide them in  these discussions ‐ until now 13

Communication – Successful  Strategies

• Supporting revenue cycle at the highest level • Garnering appreciation from non‐financial staff • Finding purpose through the patient • Demanding high performance • Celebrating success • Making innovation a priority 14

Culture – Successful Strategies

Getting Started:


Value Based Payments

Population Health Management


Expansion of ACOs and Bundled Payments

Reference Pricing

Emerging Trends


Focus on Consumerism 

–HDHP and Patient Financial Communication • Patient Financial Communications Adopter program • Education Toolkit –Price Transparency • Task Force report and Consumer Guide • Transparency Pledge –Medical Account Resolution

Emerging Trends


Changing Infrastructure Requirements

Emerging Trends

18 Enterprise management of service/episode specific revenue, anticipated cost

and expected margin Enterprise management of

service/episode specific revenue, anticipated cost

and expected margin

Enterprise revenue and


management of patient care related AR and


Enterprise revenue and


management of patient care related AR and


Enterprise management of contracts and


Enterprise management of contracts and


Enterprise revenue cycle

and payment cycle

business insights and analytics Enterprise revenue cycle

and payment cycle

business insights and analytics Enterprise wide

Workflows, Scalable, Open Infrastructure


Conceptual View of the Patient‐Centered 

Revenue Cycle

19 Physician & patient Identify need for service Provider takes initiative  to complete pre‐arrival  processes ‐ clinical and  financial Time of service activities‐ Patient  arrival ; Clinical services and   documentation; Revenue capture,  Coding & Patient discharge  m Post service – completion of activities required to successfully resolve the financial components for  patient and provider EHR

Multiple levels from macro (Map Keys) to 

detailed to vendors

First level Keys:

- Net Days in A/R - Cash to Net PSR % - Discharged not final billed – Days in A/R  - Accounts receivable aging - Gross A/R days and Net AR days - Bad debt write‐offs as % of GPR - Charity write‐offs as % of GPR - Denial write‐offs as % of GPR 20

Applying the MAP Strategies:  Measure

• Level 2:  Departmental Performance – Example – Patient Access –POS Collections –Customer service scores –Registration error rate –Pre‐registration of scheduled procedures and services –Conversion of self pay to insurance –Central Scheduling – Call abandonment rate

Applying the MAP Strategies:  Measure


• Level 2:  Department Performance – Example – HIM - $ delayed in HIM - DNFB days >3 days - Transcription turnaround time - Clinical chart turnaround time  22

Applying the MAP Strategies:  Measure

• Payer Performance Scorecards: - Anonymous comparative data by payer - Denial rates as a % of visits/admissions - Types of denials - Overturn rates - Appeal turn around time - Average days to pay - A/R Aging  - # and $ Outstanding appeals over X days old - # and $ Outstanding overturn denials over X days old

Applying the MAP Strategies:  Measure


High Performance Award 

Winners 2013 ‐ 2015

24 Data from 2015 High Performing Revenue Cycle Award Winners: Net Days in  A/R Aged A/R 90  days and  greater DNFB FBNS DNSP Bad Debt  Write Off % Cost to  Collect Cash  Collection POS Cash  Collection Charity Care  Write Off % Median 37.45 19.6% 3.90 .49 4.40 1.7% .0255 Median 98.5% 20.5% 3.3% Percentile90 30.70 13.3% 1.75 .00 1.95 0.4% .0090 Percentile 90 108.2% 45.7% 6.5% 75 33.90 13.8% 2.43 .00 3.33 0.6% .0158 75 101.4% 36.4% 4.4% 50 37.45 19.6% 3.90 .49 4.40 1.7% .0255 50 98.5% 20.5% 3.3% 25 42.03 23.4% 5.40 1.04 5.48 2.8% .0345 25 97.0% 12.7% 1.7% 10 44.05 28.7% 6.45 1.77 7.45 4.5% .0615 10 96.2% 5.6% 1.1% Data from 2014 High Performing Revenue Cycle Award Winners: Net Days in  A/R Aged A/R 90  days and  greater DNFB FBNS DNSP Bad Debt  Write Off % Cost to  Collect Cash  Collection POS Cash  Collection Charity Care  Write Off % Median 42.71 19.3% 5.46 .39 6.59 1.4% .0261 Median 100.5% 16.1% 3.5% Percentile90 28.35 13.7% 3.19 .00 3.70 0.4% .0123 Percentile 90 104.7% 31.0% 8.6% 75 35.74 14.9% 4.65 .01 5.19 0.8% .0189 75 101.9% 23.4% 6.4% 50 42.71 19.3% 5.46 .39 6.59 1.4% .0261 50 100.5% 16.1% 3.5% 25 45.66 23.3% 7.79 1.37 8.45 2.5% .0304 25 97.6% 9.0% 1.6% 10 47.71 39.8% 8.69 4.85 11.46 4.1% .0439 10 93.4% 0.7% 1.3% Data from 2013 High Performing Revenue Cycle Award Winners: Net Days in  A/R Aged A/R 90  days and  greater DNFB FBNS DNSP Bad Debt  Write Off % Cash  Collection POS Cash  Collection Charity Care  Write Off % Median 37.50 19.3% 5.35 .50 6.62 2.3% Median 100.0% 21.3% 3.5% Percentile90 27.05 9.2% 1.70 .00 1.76 0.5% Percentile 90 105.0% 46.9% 6.7% 75 32.75 13.2% 4.10 .00 4.90 1.5% 75 103.6% 40.0% 5.4% 50 37.50 19.3% 5.35 .50 6.62 2.3% 50 100.0% 21.3% 3.5% 25 40.03 24.2% 6.95 1.70 8.23 2.8% 25 99.4% 6.1% 1.3% 10 44.12 25.3% 10.22 2.60 10.70 3.1% 10 98.9% 1.4% 0.4%


Sharing performance with payers

Comparing denial rates among payers

Driving improvement in appeals resolution days

Comparing average days to pay

Using scorecard data to change managed care 

contract terms

MAP Strategy:  Apply


Eliminating Babel

26 Improving the Patient Experience

Perceived Lack of Transparency

May 2013


Use data to reduce days in A/R

Use data to improve denial resolution rates and 


Lower denial rates equates to $X increase in 

cash collections

Reduce bad debts

MAP Strategy:  Perform


Identify segments of the revenue cycle where 

performance is lagging

Prepare a Gap Analysis to confirm specific target 


Use the ideal revenue cycle  steps from the Gap 

Analysis and best practices from industry 

sources to redesign for the future

Finding Your Opportunities …


Gap Analysis…Sample

Best Practice Activity: Pre‐service

Facility – Current Activity Gap Narrative Metrics

Totally integrated electronic  scheduling system used for all  scheduled services; single  database used to allow  scheduling to view all system  resources and enterprise‐wide  MPI 100% of services which  should be scheduled are  electronically scheduled Electronic scheduling option  available to physician offices  through secure network 100% of services which  should be scheduled are  electronically initiated by the  physician offices ABN process integrated into  scheduling  and completed at  earliest opportunity based on  written order and coded  diagnosis 100% screened prior to  provision of service Rules‐based work distribution  and delinquency monitoring  tool used to route accounts  for processing and to identify  processing requirements for  scheduling and pre‐service  work 100% of scheduled and pre‐ registered cases monitored to  identify processing  requirements for scheduling  and pre‐service work 30


• Implement a disciplined approach to process  improvements: –Identify members of the process improvement team –Use MAP Key data or other metrics to educate the team –Calculate value of closing the gap between your current  performance and best practice or best peer  performance –Identify best practice work flows to better align people,  process and technologies –Customize best practice work flows to your organization

Getting Started

31 • Implement a disciplined approach to process  improvements (continued): –Calculate resources needed to implement changes –Set performance goals; calculate budgetary impact –Identify job descriptions, obtain approvals and recruit  staff –Develop training materials and train staff  –Obtain approvals for new work flows and changes – Test work flows and implement –Measure results; continue to modify work flows

Getting Started


The Revenue Cycle Model Must Change

Historical Model The Near Future

Gather basic info before & at  the time of service. Most billing processes are  post‐service, amounts due based on data gathered after  service, calculated  retrospectively.  Patients notified of  financial obligations  Pre‐ Service At  Service Post‐service:  Retrospective Data  Pre‐Service:     Prospective  Data Gathering and  Processing At Service Post‐ Service Gather info before & at time of service.  Prospectively calculate expected out‐ of‐pocket costs. Providers bill at or right after time of service. Many times,  patients know in advance what  they owe & agree on terms.  Insurance bill verifies what the patient  already expects.


Pre‐service/Time of service

–Moving point of service collections to higher level by  focusing on potential vs. actual collections –Individual employee level monitoring and reporting –Focus on finding resources, educating patients about  financial responsibilities and payment plan options

Time of service


Lessons from High Performing Revenue 



Post Service ‐ clean claims count!

–Standard work –Extensive pre‐bill edits –“Get it right first time” –Corrections to process rather than continued correction  work –Electronic transactions (276/277 claim inquiry and  response) –Use data to convince payers to alter denials pattern and  improve post‐acute care services 

Lessons from High Performing Revenue 



More tips:

–Continuous attention to all forms of patient financial  communications –Organization wide emphasis on education and sharing  information at all‐staff meetings to raise understanding  of the importance of revenue cycle –Employee selection process focusing on skills and  teaching technical components of jobs; invest in the  success of the “newbies” –Proactively managing your IT vendor(s); technology as  tool to support, not drive process

Lessons from High Performing Revenue 




More tips:

–Ask your patients! –Make the managed care department your best friend –Integrating hospital and physician revenue cycles‐ keys  are standardization, policies, training, redefining  standard work/processes –Make patients part of the solution, not part of the  problem – example = COB issues –Measure and track performance

Lessons from High Performing Revenue 



More Tips

–Adopt the ongoing process improvement lifestyle:   continuous process improvement; zero defect  mentality; annual upgrading of skills –Get by with a little help from your friends! –Start every day the KPI way! –Be technology crazed – eliminate anything manual that  you can –Prioritize service recovery 

Lessons from High Performing Revenue 



More Tips

–Focus on the team and team goals –Champion the value of education and learning from all  sources; re‐educate, re‐certify all staff annually in CRCR  and PFC –MAP!

Lessons from High Performing Revenue 



Patients Benefit 

40 Understands Out‐ of‐Pocket Liability Understands Out‐ of‐Pocket Liability Engaged Engaged Knows how account  will be resolved Knows how account  will be resolved Reduces back end  problems (denials, etc.) Reduces back end  problems (denials, etc.) Focus on clinical care  at time of service Focus on clinical care  at time of service Single point of contact  for finances Single point of contact  for finances 41

Organizational culture that elevates the 

importance of the revenue cycle

Belief in KPIs and willingness to use them

Be good at what they need to be good at

Accelerate improvements – take action and 


High Performing Must Haves

Your Challenge

• Organizations must continue to do more with less • Greatest opportunity is the value of your data • Don’t keep sticking your toe in the water to check  the temperature….do something about it….jump  in • The way to achieving high performance is through  performance tracking and implementing successful  practices 42


• The “Master” Excuse List –This is too much work –The data is too hard to collect –No one will look at it anyway –Why is this really important? –“But, we’ve always done it this way!” • The Solution –Structured, deliberate approach; accountability –Communicate, communicate, communicate

The Excuses!

43 43 The picture on the next slide has 2 identical dolphins in it. It  was used in a case study on stress levels which may exist  prior, during or after a conversation with your CFO. Look  at both dolphins jumping out of the water. The dolphins  are identical. A closely monitored, scientific study revealed  that , in spite of the fact that the dolphins are identical, a  person under stress would find differences in the two  dolphins. The more differences a person finds between  the dolphins, the more stress that person is experiencing. Look at the photograph and if you find more than one or two  differences, you are under a lot of stress in your life and  need to leave now for a vacation!




Talk is cheap!

Action takes effort!!  And a TEAM!

Key = Measure, Apply, Perform

Think of the revenue cycle “secret sauce” as 

using tools to identify opportunities leading to a 

never‐ending set of improvements …

Aim for the moon!

In Closing

46 Net Days  in A/R Aged  A/R >90  days DNFB FNBS Bad  Debt Cash as %  of Net  PSR POS  Cash Charity 90th Percentile 27.2 days 10.7% 2.8 days 0.0  days 0.5% 104.8% 38.5% 6.4%


Contact Information: Sandra J Wolfskill, FHFMA Director, Healthcare Finance Policy, Revenue Cycle MAP HFMA swolfskill@hfma.org 800‐252‐HFMA 47

Revenue Cycle Leadership

Supervisory Strategies

Strive for performance monitoring and reporting that is frequent and actionable.

Seek opportunities to provide feedback as close to performance occurrence as possible

Explore metrics that others are using and how they are using them to discover new ways to learn more about your organization’s revenue cycle performance

Communication Strategies

Streamline the number and repetitive nature of patient interactions Ensure clarity in patient communications (i.e., billing statements,

financial assistance/charity care applications, etc. Explain what the patient can expect and how to obtain help Use easily understood language in multiple formats (e.g., online,

print, etc.) and in multiple languages as needed Ensure consistency between staff scripting and other

communications (e.g., web sites, printed materials, etc.)

Technology Strategies

Ensure solid processes are in place prior to seeking fixes through automation

In addition to financial factors, weigh impact on patient base when making a business case for technology investments


Revenue Cycle Leadership

Human Resource Strategies

Hire only the most appropriate staff Create detailed job descriptions Create revenue cycle career paths

Develop and provide continuing education, specifically targeting problem areas

Drive employee satisfaction through compensation, performance bonuses, and/or flexible work arrangements

Promote revenue cycle importance by finding opportunities to demonstrate the impact on patient satisfaction

Educate staff about the many ways their actions can influence the patient’s experience

Demand revenue cycle performance excellence and celebrate when high achievers are able to obtain it

Organizational Strategies

Apply intra-organizational teams around key challenges Support patient focus groups or advisory councils

Prioritize process improvements based on what will have greatest patient impact

Use established improvement methodologies


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