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MAP Keys The Keys to RevenueThe ... - MA/RI Chapter of HFMA

MAP Keys The Keys to RevenueThe Keys to Revenue Cycle SuccessSandra Wolfskill, FHFMAD irector, Healthcare Finance PolicyRevenue Cycle MAPyHealthcare Financial Management Association MA-RI Chapter : Your Compass for Navigating Financial Waters for Revenue Cycle 2015 January 23, 2015 OverviewBackground to the MAP InitiativesMAP Keys MAP KeysMAP App the ToolsMAP AwardsMAP AwardsMAP EventMAP ResearchImplementing Metrics for revenue cycle improvementQuestions .. Focus Shift to Revenue CycleIncreased attention to revenue cycle management yg Cash flow RevenuesFocus on specific process improvementFocus on specific process improvement Cash collection Work flowCustomer satisfaction Customer satisfaction Reduction in process variation Use of metrics to track ImprovementMeasuringComponentsg What are consensus measures of revenue cycle excellence?Comparing How are peers performing and what are valid performance targets?Improving How do high performers achieve and maintain success?

Internal view – Quantifying performance change across key areas of your ... • Use data to change behaviors hfmamap.org 11. Industry Expectations External view – Moody’s looks for: • Comparison against a carefully selected set of peersComparison against a carefully selected set of peers ... validity and relevancy Identify and ...

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Transcription of MAP Keys The Keys to RevenueThe ... - MA/RI Chapter of HFMA

1 MAP Keys The Keys to RevenueThe Keys to Revenue Cycle SuccessSandra Wolfskill, FHFMAD irector, Healthcare Finance PolicyRevenue Cycle MAPyHealthcare Financial Management Association MA-RI Chapter : Your Compass for Navigating Financial Waters for Revenue Cycle 2015 January 23, 2015 OverviewBackground to the MAP InitiativesMAP Keys MAP KeysMAP App the ToolsMAP AwardsMAP AwardsMAP EventMAP ResearchImplementing Metrics for revenue cycle improvementQuestions .. Focus Shift to Revenue CycleIncreased attention to revenue cycle management yg Cash flow RevenuesFocus on specific process improvementFocus on specific process improvement Cash collection Work flowCustomer satisfaction Customer satisfaction Reduction in process variation Use of metrics to track ImprovementMeasuringComponentsg What are consensus measures of revenue cycle excellence?Comparing How are peers performing and what are valid performance targets?Improving How do high performers achieve and maintain success?

2 ImprovementNot All Revenue Cycles Are Created Days in Accounts ReceivablePatient Satisfaction Patients Would Definitely Recommend HospitalIncrease = 6 5% 80 70% = = days20 40 0%20%40%0 0%NationalMedianHigh PerformanceAward WinnersSource: 2014 Medicare HCAHPS ScoresMedianHigh PerformanceAward WinnersMAP Award for High Performance Source: HFMA s MAP APP September 2014 Source: HFMA sMAP Award for High Performance Scoresg2014 Fundamentals for Successful ComparisonComparison StandardizationTimeliness Timeliness Well-defined customized peer Welldefined, customized Is Measuring Performance Important?Important?Creates a framework for analyzing dataCreates a framework for analyzing dataUnderstand your performance progress Internally throughout the organization Externally with peers and high performersIdentify resource needs Allocate labor, technology, and other resources to areas where they will have greatest Affects RelevancePerformance can shift rapidly in response to suchCurrent data is needed to set appropriate performance targetsPerformance can shift rapidly in response to such factors as: Economyy Regulatory environment Shifts in insurance coverage/self payShifts in insurance coverage/self pay Industry rate of technology adoption, such as Definition Affects UsefulnessAre You Comparing Performance With That of True Peers?

3 *Source: HFMA's MAP App for July 2012 Why Prioritize Revenue ClMt?Cycle Management? Good is no longer good enoughggg Payment trends demand efficiency and effectiveness Regulatory change is adding complexity to the paymentRegulatory change is adding complexity to the payment processes Consumers expect high levels of revenue cycle service Patient financial communication Transparent pricing Prompt and accurate billing Patient-Friendly Billing Seamless payment experience Seamless payment Right Data Guide Performance ImprovementImprovementInternal view Quantifying performance change across key areas of your revenue cycle, will position you to effectively: Set organizational goals and objectives Improve organizational effectiveness and efficiencies Use data to change ExpectationsExternal view Moody s looks for: Comparison against a carefully selected set of peers Comparison against a carefully selected set of peers Frequency and depth with which senior leadership and board members review comparative datap Leadership actions based on hospital performance relative to key How Above Good DY N dtB?

4 Do You Need to Be?To Optimize Improvement Efforts, You Need to First Understand What A Change in Performance Will MeanddUnderstand What A Change in Performance Will acceptedYou need targets that are:Measurable and quantifiableDefined by true peer groups : Days in A/RConsider a Hospital Where Days in A/R Improved to , and pyp,Performance has been Sustained Most Months for the Past Year DaysinJANFEBMARAPRDays in & : Days in A/RMeanwhile, Days in A/R for the Organization s Peers Have Dropped Even MoreDAYSINA/RAMONGPEERGROUPSOFSIMILARREV ENUEDAYS IN A/R AMONG PEER GROUPS OF SIMILAR REVENUE, PAYER Example 135 5 Peer 2 Source: Analysis of HFMA'sMAPAppSM, : Analysis of HFMA s MAP App, How HFMA RespondedHow HFMA Responded .. the Industry s Force PurposeLeading industry representativesLeading industry representatives Supported by HFMA staffCharged to identify a common set of revenueCharged to identify a common set of revenue cycle performance indicators that will allow hospitals to measure in a consistent way for pythe purpose of peer to peer comparison Force ChargeReview current KPIs and other industryReview current KPIs and other industry definition sources for completeness, validity and relevancyIdentify and prioritize the top KPIsFinalize and approve KPI definitionsppReview work product with NACsPrepare recommendations for HFMA Board epa e ecoe dat o s ooa Steps Then and NowOriginal process still in place for revisions and recommendations for new keysResearch and internal reviewResearch and internal reviewResults submitted to KPI Task Forces (Hospital/Physician)

5 Definitions and measure drafted or updated Initial determination of most relevant KPIs Draft concise definition statement and measurement for each KPI Task force consensusRecommendations submitted to the NACNAC comments considered and definitions finalizedNAC comments considered and definitions finalizedFinal work product submitted to HFMA Board for approvalImplementation! the Results Are ..Objective industry-standard metricsClear, consistent and unbiased terms to define the essentials of revenue cycle performanceperformanceGateway to valid peer comparisons through HFMA s MAP App toolHFMA s MAP App toolTool for identifying high performing and improving revenue cycles across aimproving revenue cycles across a standardized set of KPIs Keys27 Individual Keys4 Categories4 Categories Patient Access 5 keys Revenue Integrity 4keysRevenue Integrity 4 keys Claims Adjudication 6 keys Management 12 of all 27 Hospital MAP Keys 1.

6 Net Days in Accounts Receivable (A/R)2. Aged A/R as a percentage of Billed A/R3. Point-of-Service (POS) Cash Collections4. Cost to Collect5. Cash Collection as a Percent of Adjusted Net Patient Services Revenue6 BdDbt6. Bad Debt7. Charity Care8 Di T t l Di hd N t Fil Bill d8. Days in Total Discharged Not Final Billed (DNFB)9 Aged A/R as a % of Billed A/R by Payer Aged A/R as a % of Billed A/R by Payer Group24 List of all 27 Hospital MAP Keys 10. Days in Final Billed Not Submitted to Payer (FBNS)11. Days in Total Discharged Not Submitted to Payer (DNSP)12 L t Ch% f T t l Ch12. Late Charges as % of Total Charges13. Initial Denial Rate Zero Pay14 Initial Denial RatePartial Pay14. Initial Denial Rate -Partial Pay15. Denials Overturned by Appeal16 Net Days Revenue in Credit Balance16. Net Days Revenue in Credit Balance17. Pre-registration of all 27 Hospital MAP Keys 18. Insurance Verification Rate19. Service Authorization Rate20.

7 Denial write-offs as a percent of net revenue21. Charity as a Percent of Uncompensated Care22. Case Mix Index23. Cost to Collect by Functional Area24. UB04 (837I) Clean Claim rate of uninsured Inpatient to payer sourcesource26. Uninsured Discount27. Total Uncompensated Access Key: Insurance Verification Measure: Insurance verification ratePurpose: Trending indicator that patient access functions are timely accurate and efficienttimely, accurate and efficientValue: Indicates revenue cycle process efficiency and effectivenessVariable Notes:Metric Calculation:Numerator: Includes all scheduled Total number of verified encountersTotal number of registered encountersencounters prior to service and non-scheduled accounts verified within one day of service or date of admissionadmissionDenominator: Total registered IP and OP encounters in same reporting period as Integrity Key: Late ChargesMeasure: Late charges as % of total chargesPurpose: Measure of revenue capture efficiencyValue: Identify opportunities to improve revenue captureValue.

8 Identify opportunities to improve revenue capture, reduce unnecessary cost, enhance compliance, and accelerate cash flowMetric Calculation: Variable Notes: ChithtNumerator:charges must come from the Charges with postdate >3 days from DOSTo t a l gross chargessame reporting period monthly; based on last posting date of month; transaction level detaildebits + credits reported as absolute valueDenominator: No : No noteClaims Adjudication Key: Days in FBNSM easure: Days in final billed not submitted to the payerPurpose: Trending indicator of claims impacted by payer/Purpose: Trending indicator of claims impacted by payer/regulatory edits within claims processing systemVlT kit fitl/ tlit t lValue: Track impact of internal / external requirements to clean claim production which impacts positive cash flowMetric Calculation: Variable Notes: Gross dollars in FBNSN umerator:Excludes In-house and DNFB.

9 Excludes rebills and late charge billsAverage Daily Gross RevenueDenominator: No Key: Net Days in A/RMeasure: Net Days in Accounts Receivable (A/R)Purpose: Trending indicator of overall A/R performanceValue: Indicates revenue cycle efficiencyValue: Indicates revenue cycle efficiencyMetric Calculation: Variable Notes: Net A/RNet Patient Service RevenueNumerator:Excludes credit balances, non-patient A/R related 3rdparty settlements & non-patient A/RDenominator: most recent threemonth daily - Net Days in - A/R Aging Over 90 flow Cash collections as % of net flow Point of service flow Days in discharged not final bill d (DNFB)billed (DNFB) flow Final billed not submitted to (FBNS)payer (FBNS) of net patient service Bddbtrevenue Bad of net patient service Ch itrevenue Revenue cycle operations Ctt llt/ITCost to collect w/o Practice Management Keys14 Individual Keys14 Individual Keys4 Categories Patient Access 2keysPatient Access 2 keys Revenue Integrity 1 keys Claims Adjudication 2 keys Management 9 keysSimilar concept to hospital side with other keys unique to physician practice Physician Practice Management MAP Keys 1a.

10 Primary Physician Practice Operating Margin yyg gRatio1b. Specialty Physician Practice Operating Margin Income/Loss per Primary FTE Physician1d N t I/LSi lt FTE Ph i Income/Loss per Specialty FTE Physician2. Practice Net Days in Accounts Receivable (A/R)3 Practice Cash Collection Percentage3. Practice Cash Collection Primary Physician Compensation as a Percentage of Net of Net Revenue4114 Physician Practice Management 4b. Total Specialty Physician Compensation as a PfNRMAP Keys Percentage of Net Revenue5. Percent of Patient Schedule Occupied6P f ilS iD ilPt6. Professional Services Denial Percentage7. Point-of Service (POS) Collection Rate8 TtlChL D8. Total Charge Lag Accounts Receivable (A/R) by Payer Group as a Percentage of Outstanding Total A/RGroup as a Percentage of Outstanding To t a l Accounts Receivable (A/R) as a Percentage of Outstanding Accounts Patient Schedule OccupiedPeer Group: 12 Sep 12 Oct 12 Nov 12 Dec 12 Jan 13 Feb 13 Mar 13 Apr 13 May 13 Jun 13 Jul 13A/B MAC 5 & 6 Median Performance90th Decile75th PercentileA/B MAC X Median PerformanceAug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Collection RatePeer Group.


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