Section 1 - Revenue Cycle Overview Flashcards
1.2 HFMA’s Health Care Dollars & Sense - 3 Revenue Cycle Initiatives
Best Practices
- Patient Financial Communication
- Price Transparency
- Medical Account Resolution
- Financial counseling
Patient Centric Revenue Cycle
From request for service through closing the account with a zero balance and purging it from the system.
Post-service
Account activities that occur after the patient is discharged until the account reaches zero balance.
Charges are entered
Final coding (procedure and diagnosis codes)
Verify insurance and benefits
Billing edits
Claims submission (electronically)
Payment processing (electronic receipt and automatic posting to patient account)
Balance billing and resolution, as appropriate
Segments of Revenue Cycle
Pre-service (for scheduled patients)
Time of service (for scheduled and unscheduled). Complete final review prior to arrival
Post-service
Patient Financial Communications Best Practices
Bring Consistency, Clarity, Transparency.
Best practices - All interactions, ED, Advance of service, Time of Service (outside ED)
Measurement Criteria Framework - to guide evaluation of voluntary compliance.
Patient Communication in ED
Initiate financial discussions after the patient is screened and stabilized in accordance with EMTALA (Emergency Medical Treatment and Active Labor Act).
Support financial discussion during medical encounter as long as it does not impact patient care or disrupt patient flow (registration vs. discharge).
ED patients should be informed that their ability to pay will not interfere with treatment.
Uninsured should be informed that goal of collecting financial info is to identify paying solutions or financial assistance options that may aid them with their financial obligations.
Policies should be made available to the public.
Providers should have widely publicized toll-free # to discuss financial matters.
In pre-visit, keep track of contacts and avoid repeated requests for the same info.
Provide opportunity for patient advocate.
Routine (discussion with patient or guarantor)
Complex (under- uninsured - involve financial counselor)
Patient Share (Cost-sharing)
Told about various providers (and perhaps various bills)
Inform that actual costs may vary from estimates
May be timing issues related to payments that may affect their deductible.
If appropriate, patients should be asked if interested in receiving info about payment options or financial assistance options.
Need clear policies about prior balances.
Patient Interactions
Compassion
Patient Advocacy
Education
Take burden off patient by initiating conversions about financial matters -
BP - Verify patient info and patient’s preferred method of communication.
BP - Reinforce discussions with written information about financial assistance programs and summary of potential financial implications of services rendered. Include # to call with questions.
BP - Made policies available to the community
PRIVACY #1
Compliance Framework - 5 areas
Training Program - BP annual Process Compliance Executive Level Metrics Reporting Technology Feedback Process and Response
(1) Compliance Training Program (Rev Cycle) topics
Patient financial communications specific to staff role
Financial assistance policies
Patient financing options (payment plans)
Alternative solutions for uninsured (patient assistance program)
Standard language to be used in patient discussions
Laws and regs (EMTALA), Fair Debt Collections Practice Act, Telephone Consumer Protection Act.
(2) Process Compliance
BP - annual observation, monitoring, tracking of results
Evaluation can be performed by any outside dept
Evaluation should cover all relevant scenarios.
(5) Compliance Executive Level Metrics Reporting
BP - Evaluations from the 4 areas should be compiled into overall Compliance Report and presented to exec leadership on annul basis.
(3) Technology Compliance Evaluation
BP - Evaluation that tech supports verification of insurance eligibility, verification of prior balance, estimated cost of services - and the patient responsibility portion.
Perform evaluation by qualified internal or external person.
(4) Compliance Feedback process and response
Purpose to solicit feedback from key stakeholders and response to input, and ensure that patient complaints are resolved.
HFMA’s Adopter Program
BP - Providers who implement and support Adopter of Patient Financial Communication Best Practices.
Price Transparency
ACA, Health Insurance Exchange (Marketplace) high deductibles and coinsurance.
As bear more cost, expect clarity and communication re: these costs.
Need transparent pricing to make smart, educated decisions.
Need driven by both high liability and HSAs and other reimbursement arrangements.
Problem with hospital Charge Master - lists total charge, not net charges after payer’s contractual adjustment.
3 Things Patients Need to Make Estimates Meaningful
- Type of service based on CPT or MS-DRG
- Patient’s health plan
- Patient’s benefit plan
Price Transparency is applying the above.
In handling a call from patient -
Obtain order (or CPT). Verify insurance and benefits.
BP - Produce a patient friendly estimate form (software?)
Explain how insurance and patient portions were calculated.
HFMA Task Force developed 2 resource documents to assist with this process:
Price Transparency Report
Consumer Guide to Healthcare Prices (Understanding Healthcare Prices).
Patients decide based on Price, Quality & Safety.
Patients Identify, Compare and Choose among providers.
Medical Account Resolution
HFMA partnered with Association of Credit and Collections Professionals International (ACA) to form Medical Debt Task Force.
BP - Developed based on HFMA Patient-Friendly Billing and spans patient-centric revenue cycle.
Medical Account Resolution - Best Practices
See Resource -
Medical Account Resolution BP Workflow Chart.
- Educate - BP patient communication
- Bills - Clear, Concise, Correct and Patient-friendly
- Policies - Follow internally and by business affiliates
- Consistency - be consistent from billing disputes to payment application.
- Coordinate - coordinate with business affiliates to AVOID DUPLICATIVE PATIENT CONTACTS
- Juddment - good judgment about best way to communicate about patient bills.
- Timing - START ACCOUNT RESOLUTION WHEN FIRST STATEMENT IS SENT TO PATIENT
- Report and Track - Report back to credit bureaus when account is resolved (if account is reported). Track all patient complaints.
1.3 Patient Experience and Satisfaction
Today’s patients as consumers - want to know overall price and what they must pay out of pocket, prior to receiving service.
HCAHPS - 27 Q, Would you recommend this hospital to your friends and family?
Implement
Educate - what is copay, deductible, etc.
Communicate - clearly, such as price estimates, financial assistance options, early pay discounts.
Quality (1.3 Patient Experience)
40% of billing info obtained by Pt Access
When missing or inaccurate, delayed payment or nonpayment impacts patient experience.
BP - Insurance verification, pre-cert/pre-auth completed prior to scheduled visit.
Incorrect estimate or incorrect combination of health plan contract rules and patient benefit may result in debits or credits on the patient’s account.
BP - Verify with picture ID and insurance card. Review and reverify during registration.
BP - Collect copay, pt balance and coinsurance (requires charge estimate).
1.3 Billing Communication
BPs - Patient-friendly bills Expanded hours Staff identify themselves First call resolution Follow up within 48 hours Include customer service in performance appraisals.
1.3 Billing Impacts
Missing Information - missing auth, catch in pre-bill edits.
Delayed payments - incorrect health plan
Rework - no payment, delayed or partial payment.
1.3 Physician Impacts
Attending physician listed correctly
Consulting
Primary Care Provider
Results routing
Patient ID wrong
Duplicate records - historical records not accessed and considered during treatment.
Billing Information - many hospital-based physicians use hospital’s registration record to complete their billing.
Service delays at check-in if registration not completed in advance.
Case Management - need correct insurance info for post-service resources - SNF, DME.
SEE EXAMPLE OF ED REG NOT UPDATED AND CASE MGT MISSED 24-HR PAYER NOTIFICATION REQUIREMENT
1.4 Collaboration and Continuum of Care
IT Monitoring - e.g. charges coming from disparate systems. monitor daily for integrity.
Collaboration: Payer contracts - timely filing
Continuum of Care: Physician - Orders must include date, valid diagnosis, patient’s name, physician’s name and signature, description of tests ordered.
Schedule or instruct to call to schedule
Typically physician’s office obtains prior auths
SNF: Skilled Nursing Home or Rehab facility
Can be distinct part of a hospital if beds are on floor, ward (Medicare)
CAHs that provide Medicaid can use swing beds for SNF-level care.
For Medicare, SNF must have written transfer agreement with one or more participating hospitals and for the interchange of medical information.
Participating SNFs must comply with Advance Directives (OBRA - Omnibus Act of 1990).
- Inform all adults, in writing, of state laws regarding advance directives and its own policies.
- Document in chart whether or not patient has executed Advance Directive.
- Educate staff and community on issues concerning Advance Directives.
1.4 SNF Covered Level of Care
Care in SNF is covered if:
- Patient requires Skilled Nursing or Skilled Rehab services.
- Requires skilled services on a daily basis
- As practical matter, can only be provided on inpatient basis in SNF.
- Services must be reasonable and necessary for the treatment of a patient’s illness or injury.
1.4 Home Health Agency
Criteria 1. Qualifying Services - Must furnish at least one of these thru HHA. But may furnish 2nd qualifying service and additional services under arrangement with another HHA or organization. - Skilled nursing - Home health aid services - PT - Speech-language path - OT - Medical social services
Criteria 2 - Need policies established and by physician and RN and supervision by same.
Criteria 3 - Maintain clinical records
Criteria 4 - Licensed in State
Criteria 5 - Meeting Other Conditions
Health & safety conditions of HHS
PHYSICIAN CERT - patient confined to home. Not necessarily bedridden, but leaving home requires considerable and taxing effort. Expected that absences from home due to medical treatment.
PATIENT’S PLACE OF RESIDENCE -
Own dwelling, apartment or relative’s home or home for aged.
Not a SNF or hospital for purposes of Home Health coverage.
1.4 DME
Medical equipment prescribed by physician (or if health plan allows - NP, PA or clinical nurse specialist) for use in the home.
walkers, wheelchairs, hospital beds.
Also diabetic supplies, RT supplies, oxygen and CPAP machines.
1.4 Hospice
Generally provided to terminally ill patients at home
Medicare coverage - 2 90-day periods and unlimited subsequent periods up to 60 days each.
1.4 Assisted Living
For adults who need help with everyday tasks (ADLs). Some are part of retirement communities.
Combination of housing, personalized support and healthcare services.
Medicare does not cover Assisted Living. Some may be covered by LTC insurance.
3 meals/day, housekeeping, transportation.
Medical services, 24-hr security/staff, emergency call system, health promotion and exercise programs, medication management, laundry services, social and recreational activities.
1.5 Compliance Plan
2009 FERA (Fraud Enforcement and Recovery Act amended the False Claims Act. Now whistleblowers can bring FCA action against providers who knowingly and improperly keep government funds that are paid in error.
In June 2016, Supreme Court decision in Universal Health Services v United States created theory of “implied certification”. Means violation of FCA if submit a claim that does not meet all compliance standards.
$2.6B recovered by Dept of Justice in 2017 -
Kickbacks, inappropriate payments
1.5 Elements of Corporate Compliance Plan
1 - Self reporting may mitigate sanctions
2 - Culture that supports identification of violations and takes immediate action
3 - Full support of leadership and Compliance Officer in senior level
4 - Oversight of personnel
5 - Written procedures, including Code of Conduct
6 - Regular training program that includes physicians
7 - Hotline or anonymous communications process to report potential issues
8 - Due diligence in employment of individuals under sanction
9 - Monitoring system to achieve compliance with standards
10 - Establish compliance standards and procedures
11 - Written communication standards and procedures
12 - Plan to communicate standards to employees
13 - Individuals unlikely to engage in criminal conduct
14 - Mechanisms to monitor compliance, including independent evaluations
15 - Appropriate and consistent discipline for employees violating procedures/ethics
16 - Implementation of an audit plan
1.5 Elements of Compliance AUDIT Plan
- Clearly defined goals that identify specific practices to be audited
- Personnel who will conduct the audit
- Individuals to be interviewed
- Documents to be reviewed
- Steps to be taken to ensure protection by attorney/client privilege
1.5 Code of Conduct
Helps employees understand expectations and fosters an environment where questions/concerns raised without fear of retaliation or retribution.
Areas of Focus
- HR
- Privacy/confidentiality
- Quality of care
- Billing/Coding
- Conflicts of Interest
- Laws/Regulations
1.5 Chief Compliance Officer
Reports directly to Board of Directors as well as CEO.
Ideally has limited responsibilities for operational aspects of the organization to not feel pressured due to job security.
Board or Compliance Committee should meet regularly with planned agenda to discuss the operations and accomplishments of the Compliance Program (minutes).
OIG - provide oversight for HHS
Publish OIG Work Plan monthly - all examples related to claims
1.5 HIPAA 1996
Compliance-related
- Coordinate fraud & abuse control program
Other HIPAA: Protection of patient info Electronic transaction standards and sets Security and Privacy Officers EIN - also used by IRS NPI - 10 digit, intelligence-free
Goals of HIPAA:
Expand health coverage and continuity in group and individual markets
Patient access to records and right to amend and make corrections
Electronic exchange for TPO
1.5 HIPAA Privacy Rule
- Written policies regarding staff who have access to PHI, how it will be used and when it will be disclosed.
- Provide training to all staff
- Define PHI and access by individuals, health plans and BAs.
- DesignatedPrivacy Officer
HITECH Act 2009 to promote the adoption and meaningful use of HIT.
HITECH addresses privacy and security concerns. Compliance required as of 2013.
OCR oversees HIPAA
EPHI - guidance for remote use of data accessed, stored or transported off site.
1.6 Medicare Compliance
DRG Three-Day Payment Window
- Hospitals cannot bill for Part B if within 3-day, 72 hour, DRG window, if patient has Part A.
- All diagnostic services provided by a hospital (or wholly owned or operated entity) during 3 calendar days prior to admission must be included on the bill for inpatient stay (included in Part A payment
- Can bill for Part B nondiagnostic services if services unrelated to admission. CONDITION CODE 51 - noted on separate UB-40 outpatient claim.
1.6 Medicare 5 Compliance Rules
- Violation of DRG Window - 72 hour, 3-day rule - Delays payment when not bundled. Submit claims to Medicare Administrative Contractor (MAC). Apply to hospitals operating under Medicare’s Inpatient Prospective Payment System (IPPS).
Nursing home services okay
CAH exempt from both 3-day and 1-day rule.
Cancer, children’s, psych, inpt rehab subject to 1-day DRG rule.
- Two-midnight Rule
- Medical Necessity Screening and ABNs
- ABN Notification Requirements
- Medicare Secondary Payer (MSPQ)
1.6 Medicare Two-Midnight Rule
Inpatient admissions spanning 2 midnights appropriate for IPPS payment.
Some “inpatient only” procedures are excluded.
1.6 Medicare as Secondary Payer (MSP)
From beginning of Medicare, Medicare has not made secondary payment for certain payers.
Amounts paid by primary payer are considered payment in full.
Medicare as Secondary -
Working aged -
if group has 20 or more employees, Medicare is primary if employee declines group coverage. Otherwise, Medicare is secondary.
Accident or other Liability -
Liability is primary only if accident did not occur on patient’s own property. Coding on UB-04 includes Occurrence Code and Date of Accident.
After 120 days, Provider has option of canceling the liability claim and billing Medicare.Medicare will process claim and recover payment from liability health plan.
Disability -
Patient is under 65 and patient (or spouse) has employment status with large group plan of 100 or more employees.
End Stage Renal Disease -
Medicare is secondary during the 30 month coordination period if patient is covered by GHP.
1.6 ABN (Advance Beneficiary Notice of Noncoverage)
Medicare pays for only medically necessary services.
Provider is required to issue ABN if ordered service does not meet medical necessity.
The ABN is the mechanism used by providers to explain to patients that ordered test or services probably will not be covered by Medicare because the diagnostic information provided by the physician does not support the need for these services.
The ABN may also be used for voluntary notification, in place of the Notice of Exclusion for Medicare Benefits (NEMB). By providing this notice in advance, the patient is given the cost of the test and the option to refuse or pay for services.
This allows the beneficiary to make an informed decision about whether or not to receive the services which he/she may have to pay out of pocket.
ABN Requirements -
As soon as provider determines Medicare most likely will not pay, it must advise patient that, in the provider’s opinion, he/she will be personally and fully responsibility for payment.
The involves timely and effective delivery of approved CMS ABN form (CMS-R-131)
Format of ABN -
Type large and easy to read (Font 12 or larger)
Avoid highlighting and shading
High contract (black ink on white paper)
Handwritten info must be legible.
Must clearly identify specific test or services. Provide info used to determine that Medicare may not pay.
Identify estimated cost of test that may not be covered.
Deliver in person to patient or patient’s rep
Provide far enough in advance to make an informed decision
Be understood
Be signed
1.6 Correct Coding Initiative (CCI)
Purpose to ensure that most comprehensive group of codes, rather than component parts, are billed.
Program consists of edits that are implemented within providers’ claim processing systems. The CCI edits are incorporated within the outpatient code editor. The edits also check for mutually exclusive code pairs.
Unit-of-service edits- determine maximum allowed # of services for each Healthcare Common Procedure Coding System (HCPCS) code.
1.6 Modifiers
Indicate specific circumstance without changing the code.
Modifiers are used to:
- Indicate both a prof and tech component (applies to CAH using Method II Reimbursement)
- Performed by more than one physician and/or in more than one location
- Was increased or reduced
- Was performed more than once.
- Only part of service performed
- Bilateral performed
- Unusual events occurred
- An ADJUNCTIVE service was performed
Don’t use Modifier if code already indicates “2-4 lesions”, “multiple extremities” or if specific codes apply to different body parts - avoid redundancy with use of Modifiers.
1.6 Outpatient Prospective Payment System (OPPS) Modifiers
Level I - 2 numbers. Apply to CPT codes.
Level II- 2 letters or Letter and number. Apply to HCPCS codes. Apply whether Medicare is primary or secondary. May be appended to CPTs. Used to add specificity to eyelids, fingers, toes, arteries.
If more than one Level II Modifier applies, HCPCS code is repeated on another line. For example, 26010FA AND 26010F1 - Drainage on left thumb and 2nd finger.
Use no dashes before Modifier.
Level I - 2 numbers. Apply to CPT codes.
Level II- 2 letters or Letter and number. Apply to HCPCS codes. Apply whether Medicare is primary or secondary. May be appended to CPTs. Used to add specificity to eyelids, fingers, toes, arteries.
If more than one Level II Modifier applies, HCPCS code is repeated on another line. For example, 26010FA AND 26010F1 - Drainage on left thumb and 2nd finger.
Use no dashes before Modifier.
1.8 Volume to Value
ACA:
To reform healthcare system to reward greater value, improve quality of care and increase efficiency in delivery of services
Center for Medicare and Medicaid Innovation - delivery & payment models
Improve quality of care - initiatives Reduce readmissions Reduce hospital acquired infections Comp Joint Replacement and Cardiac Improve physician quality reporting
Accountable Care Organizations
1.8 ACOs
Why ACOS?
APPROPRIATENESS OF CARE
ELIM DUPLICATIVE SERVICES
PREVENT MEDICAL ERRORS FOR POPULATION
Medicare ACOs as well as commercial payers
Types of ACOs: Demonstration Pay-for-Performance Programs
Medicare Shared Savings Program - FFS
Pioneer ACO -for experienced health systems. Yr 3 to population-based model.
Investment Model ACO - designed for ACOs in MSSP. Targeting rural and underserved areas.
Comprehensive ESRD model
1.8 Other Pay-for-Performance Programs
REDUCTION- Hospital Reduced Readmissions Program
2012 - Heart attack, heart failure, pneumonia - CMS reduce payments for high readmissions.
In 2015 added - COPD, THA (total hip arthroscopy), TKA (total knee arthroscopy)
VALUE - BASED - Hospital Value Based Purchasing
Rewards acute care hospitals following clinical best practices and enhance patient experience. Based on how well perform or improve.
REPORTING - Physician Quality Reporting
Financial incentive to physicians for reporting quality data. In 2015, reduced payments if did not satisfactorily report quality data.
1.8 Episode Based Payment Initiatives. (BPCI)
BPCI Models 1-4 (Bundled Payments for Care Improvement). Include financial and performance accountability for episodes of care.
Comprehensive Care for Joint Replacement
BPCI Model 1 -
Inpatient stay in Acute Care Hospital. Medicare pays hospital discounted IPPC. Medicare continues to pay physicians under Medicare fee schedule.
BPCI Model 2 -
Retrospective bundled payment reconciling actual expenses against target price for episode. Medicare continues to make FFS payments to providers and suppliers of services.
BPCI Model 3 - Similar to Model 2 only trigger is acute hospital stay and BEGINS at initiation of Post-Acute Care. Post-Acute care services must begin within 30 days of discharge and end 30,60,90 days after initiation of episode of care.
BPCI 4 - CMS makes single PROSPECTIVE BUNDLED PAYMENT TO HOSPITAL for all services during the Episode of Care lasting entire hospital stay. Physicians submit “NO PAY” claims and they are paid by the hospital out of the bundled payment. Readmissions within 30 days included in bundled payment.
1.8 Episode Based Payment Initiatives (Comprehensive Care for Joint Replacement)
Hip and knee
LEJR - Lower extremity joint replacements
Most common Medicare inpatient surgeries
Model tests bundled payment and quality.
Coordination of care from initial hospitalization through recovery.
1.8 Medicare’s Pay-for-Performance Initiatives
Standard Quality Measures
Who participated? Hospital associations, The Joint Commission
Agency for Healthcare Research and Quality, Consumer groups, Major payers (AFL-CIO)
Quality Measure for Comprehensive Joint Replacement:
Measure 1 - RSCR (Risk Standardized Complication Rate) - complications within 90 days following admission. Complications include: AMI, pneumonia, sepsis w/i 7 days, surgical site bleeding, PE w/i 30 days,joint/wound infection w/i 90 days.
Measure 2 - HCAHPS - 32 patient questions. Purpose is to address functional outcomes. Voluntary submission by hospital.
1.8 Ambulatory Care Measures
Worked with AMA’s Physician Consortium for Performance Improvement and NCQA
1.9 Financial Reports
Securities and Exchange Commission (SEC)
FASB
GAAP
Income Statement
Balance Sheet - summary of assets, liabilities and net value = net assets
Cash Flow Statement - how cash was used and where it was obtained.
Accrual, Cash, Fund Accounting
Most use Accrual Method - revenue is recorded when it is earned to align with expenses
Cash Method - records revenue when payment is received.
Fund Accounting - record-keeping method to manage categories of net assets to ensure compliance with restrictions on those funds.
1.9 Gross and Net Revenue
Gross Revenue - total charges
Net Revenue - estimate allowances - contractual, discounts that will be applied against those revenues. Net Revenue is amount that payers (3rd party and patient) have committed to pay based on agreement with provider.
Determining Net Revenue -
Historical adjustment
Impact of health plan contracts and self-pay adjustments posted at time of billing
Impact of charity care - eliminated from both revenue and expense for financial statement purposes.
Provision for bad debts associated with patient revenue is reclassified from operating expense to reduction from patient service revenue, net of contractual allowances and discounts.
NET PATIENT SERVICE REVENUE
1.9 Estimating Net Receivables
Estimate the following reserves: Contractual allowances Self-pay adjustments Bad debt Charity Other allowances (e.g. courtesy)
Reserves for BAD DEBT - based on health plan groups and age of AR.
PAYER - Self- Pay
(Net of contractual) - >120 days FROM FIRST PATIENT BILL (% reserved =100%
60-90 days (% reserved = 25%)
PAYER - Medicare
> 365 days from discharge (% reserved = 100%)
IMPORTANT to report both NET PATIENT SERVICES REVENUE and NET ACCOUNTS RECEIVABLE
BAD DEBT is deducted from TOTAL A/R.
CHARITY CARE reduces Gross Revenue and TOTAL A/R. Provided as footnote in financial statements.
If overestimate of reserves - more $ collected than anticipated. CFO sets reserves.
1.9 Contra-Account Amounts
Post adjustments at time of billing to minimize need to estimate contractual reserves.
Software to load 3rd party contracts.
Then A/R reflects payment expected without need to make estimates based on historical averages.
If contractual or other allowance cannot be posted until payment is received, the patient’s account will reflect GROSS CHARGES until payment is received.
Contra-Account estimates used to accurately estimate A/R.
1.10 KPIs
HFMA MAP Keys - n=25
KPIs set standards for A/R collection and control.
5 groups: Patient Access, Pre-billing, Claims, Account Resolution, Financial Management
Patient Access: Insurance Verification Rate Service Auth Conversion Rate of Uninsured to Payer Source POS Cash Collections
Pre-Billing:
Days in Discharged Not Final Billed (DNFB)
Days in Final Billed Not Submitted to Payer
Days in Total Discharged Not Submitted to Payer
CLAIMS:
UB04 (837) Clean Claim Rate
Late Charges as % of Total Charges
ACCOUNT RESOLUTION:
Aged A/R as % of Billed A/R by Payer Group
Denial Rate (Zero Pay and Partial Pay Denials)
Denial Write-offs as % of Net Patient Service Revenue
Bad Debt
Charity
Net Days in Credit Balances
Net Days in Accounts Receivable
FINANCIAL MGT: Cash collected as % of Net Patient Service Revenue Uninsured Discount Uncompensated Care Case Mix Index Cost to Collect Cost to Collect Functional Area
1.10 A/R Days Calculation
Net Pt Service A/R (during specified 3-month period)/ave daily Net Pt Service Revenue = Net Days in Pt A/R. Include all calendar days.
Take total Rev for 3 months/ # total calendar days = Net Daily Pt Service Revenue.
Net Daily Pt Services Revenue/A/R balance at end of period = A/R Days
Can calculate for specific payers
Hospital benchmark = 40-45 days in A/R.
1.10. Reasons A/R Not Collected
Assess processing - Front Office eligibility Failure to collect TOS Delays in Billing - Late charges, coding Delayed insurance elig processing Missing info - modifiers, etc. Delayed payment posting Lack of follow-up on A/R.
Use DESCENDING BALANCE REPORT to focus on highest balance accounts.
Large # of accounts with single outstanding balance may be failure to collect copays.
1.10 Techniques to Measure Accounts Receivable
Discharge Not Final Billed (DNFB) - WHY? Need to complete: Entry of all charges Final coding Verify insurance
DNFB
“SUSPENSE” Period in BILLING SYSTEM -
Allow for completion of the charges, coding, elig verification
BP - 3-day window (72 hours)
1.10. Techniques to Measure Cost to Collect
Because health care is typically not cash-upfront business, cost to collect for services rendered.
Cost to collect Total Patient Service Cash Collected includes Patient Access expense, Patient Accounting Expense and HIM? expense.
Sample Cost to Collect:
$150,000 expenses (2.1% cost to collect)
$7M collections
BP - 1.6% to 2.4%
1.10. Cash Collected as % of Net Revenue
Let’s you know how much actual cash you collected as a percentage of what was available to collect.
Example of Cash Collected as % of New Revenue:
Gross Revenue: $900,000
Contract allowance: $100,000
Charity: $35,000
Net Revenue: $765,000
If only collect $740,000 and other $25,000 written off as bad debt = 96.7% % cash collected.
BP= >=95% cash collected percentage.
- should also complete net collection rates by each major payer over 12 month period
BP = >=95%.
1.10. Point of Service Cash
Collected on DOS or up to 7 days afterwards. It is % of total self-pay cash collected for the period. Result of patient financial communications BP.
BP = 25-37% POS collections as % of total self-pay cash
(Note POS is defined here as collected on DOS or up to 7 days afterwards.
2.1. Types of Patients
Scheduled
Unscheduled - ED, Walk-in, Observation, Newborns (baby delivered in hospital registered as Newborn).
Non-acute Types
Schedule to ensure appropriate reimbursement and to plan rooms, equipment, staffing. Reduce wait times and maximize patient flow.
Scheduled inpatients - use Medicare criteria. Surgery, OB
Direct Admit Patients considered scheduled if physician calls ahead.
Health Plans categorize scheduled inpt as Elective Admissions and managed care requires Prior Auth.
For Recurring Services like PT/OT, health plans typically require prior auth for # visits, $ amount or specified timeframe.
UNSCHEDULED - Most common is ED.
access processing completed at time of service.
Most health plans require within 24 hours or the next business day notification of Emergency Admissions. May require transfer to another hospital in network when stabilized.
ED - can be discharged, admitted, transferred or needed as observation status.
Urgent Care/Walk-ins for Ancillary -
First-come, first served. Must be in- network facility. Typically don’t require prior auth.
2.1. Unscheduled Observation Patients
Most are from ED or sent as “direct” or “urgent” by physician
NOT appropriate for:
Substitute for inpatient admission or continuous monitoring.
Medically stable who need testing or outpatient procedures.
Waiting for SNF placement or as patient convenience.
Routine prep or recovery from diagnostic or surgical procedures.
To evaluate for admission
To resolve issue for discharge
For treatment expected to last <24 hours
To treat complications from outpatient surgery or procedure
Separate from prolonged ED care.
2.1 Non-Acute Types of Patients
SNF Hospice Home Health DME Clinic
SNF - Need skilled nursing or rehab. Medicare only covers if transferred after at least 3-day stay for related illness or injury. Often ortho or stroke patients. CMS ACO model waives 3-day stay requirement prior to SNF.
Hospice - Life expectancy 6 months or less. Pain and symptom management. Disease is no longer treated. Medicare-certified must provide Rx, physician and nursing 24/7. The hospice program is billed, not Medicare, if hospice services require hospital admission.
Home Health -
Intermittent skilled nursing, PT/OT, etc. Require physician orders.
DME - must be obtained by Medicare-approved supplier for Medicare to pay.
Clinic -
Facility or part of one devoted to diagnosis and treatment of outpatients.
May be hospital-based and hospital may employ professional staff.
2.2 Scheduling
Core Steps
- Patient ID
- Requested service
- Scheduling Instructions
- Review and Validation
- Patient Reminders and Arrival Instructions
- Order Requirements
Scheduling is basis for pre-reg and financial clearance.
2.2. Patient Identification
Full legal name
Date of birth
Sex
SSN
Avoid duplicate MRNs or placing info in wrong record
ONCE PATIENT IS CORRECTLY IDENTIFIED - Full legal name DOB Sex SSN Marital Status Phone # Race Ethnicity Employer - occupation, employment status Emergency contact Health plan, policy and group #’s
2.2. Information to Review in Schedule Finalization
- Service to be provided
- Date and location
- Arrival vs. test time
- Required pre-testing and timeframe
- Patient prep
- Patient arrival instructions - where to park, where to report, how to get to service area.
- Additional patient contact prior to the service -
- complete pre-reg
- schedule pre-procedure testing
- answer health plan questions
- complete financial education/resolution
