Optimizing Payor Mix - Guidian Healthcare …

1 Optimizing Payor MixOptimizing Payor MixBilling & Collections in the Changing Economic LandscapeNWRPCA/CHAMPS 2009 FALL CONFERENCESEATTLE, WASHINGTONGUIDIAN Healthcare CONSULTINGGUIDIAN Healthcare CONSULTINGP resentation Overview PAYORMIX THEBIGPICTURE 5 Important Reasons to Evaluate Payor Mix Role of Payor Mix in Operations Management Service Area Payor Mix Optimizing Payor Mix thru Billing & Collecting Optimizing Payor Mix thru Billing & Collecting Wrap-up and Questions Guidian Healthcare Consulting 2009 The Big PictureUnderstanding the financial health of your community health centerbegins with understanding the user groups who access services andbegins with understanding the user groups who access services, andhow those services are reimbursed.

2 Guidian Healthcare Consulting 2009 The Big PictureUnderstanding how many Budgetingvisits per Payor classFinancial PlanningFinancial PlanningDetermine ratio of Understanding Net Revenue per Visit by Determine ratio of Medicaid users needed to cover costs of an uninsured userRevenue per Visit by PayorDetermine total number of uninsured d b tcovered by grants Guidian Healthcare Consulting 2009 The Big PictureEvaluate which Revenue CycleRevenue Cyclepayors are favorableEvaluate receivables b Financial PlanningFinancial Planningby payorC lf f Create a platform for contract negotiationIdentify issues in billing & collecting process by comparing various Payor mix calculationsmix calculations Guidian Healthcare Consulting 2009 The Big PictureRevenue CycleRevenue CycleFinancial PlanningFinancial PlanningUnderstand how you are positioned in Develop growth strategies & project ho gro th ill Strategic PlanningStrategic Planningpservice area marketEvaluate the implications how growth will effect bottom line Determine the number and pof initiating a new serviceDetermine the number and type of providers needed Guidian Healthcare Consulting 2009 The Big PictureRevenue CycleRevenue CycleFinancial PlanningFinancial PlanningCreate targeted outreach strategiesOutreachOutreachgDevelop internal cross selling plansStrategic PlanningStrategic PlanningCreate

3 Relationships w/ other social service agencies that serve the populations that serve the populations you want to target Guidian Healthcare Consulting 2009 Presentation Overview Payor Mix The Big Picture 5 IMPORTANTREASONS TOEVALUATEPAYORMIX Role of Payor Mix in Operations Management Service Area Payor Mix Optimizing Payor Mix thru Billing & Collecting Optimizing Payor Mix thru Billing & Collecting Wrap-up and Questions Guidian Healthcare Consulting 20095 Reasons to Evaluate Payor Mix Payor mix allows the CHC to evaluate how well it is doing and compare ygpitself to other CHCs and private practices Comparing the CHC Payor mix to the service area Payor mix illustrates how the CHC is situated in the market placethe CHC is situated in the market place Payor mix is a key ingredient to organizational strategic planning Comparing various Payor mixes can red flag issues with the CHC s billing and collections or Payor contracts Comparing Payor mix by service line can identify opportunities to Comparing Payor mix by service line can identify opportunities to maximize revenue by maximizing Payor mix across the organization Guidian Healthcare Consulting 2009 Presentation Overview Payor Mix The Big Picture 5 Important Reasons to Evaluate Payor Mix ROLE OFPAYORMIX INOPERATIONSMANAGEMENT Service Area Payor Mix Optimizing Payor Mix thru Billing &

4 Collecting Optimizing Payor Mix thru Billing & Collecting Wrap-up and Questions Guidian Healthcare Consulting 2009 Payor Mix & Operations ManagementbyCHARGESbyNETREVENUEbyUSERy When you come to a fork in the road take it! When you come to a fork in the road, take it!Yogi Berra Guidian Healthcare Consulting 2009 Payor Mix & Operations ManagementDo NothinggWe can try to avoid makingWe can try to avoid makingchoices by doing nothing, but even that is a CollinshhdDoing nothing is very hard todo, you never know when youare NielsenLeslie Nielsen Guidian Healthcare Consulting 2009 Payor Mix & Operations ManagementCase Study #1A CHC was evaluating its business practices, and trying to determine the organizational effects of hiring new providers to treat the growing population in its service area.

5 The service area had a growing uninsured population, and Medicaid is one of the better payors resulting in competition for this patient base between the CHC and private physician practices. the CHC and private physician practices. CHC BASELINEDATAB aseline 7 year Growth l35 Strategic Growth Plan2009 Estimated % Total Revenue2015 Projected % Total RevenueProjected ChangeGross Pt Sx Revenue10,406,000112%28,472,000134%174%O tiGt2 992 00032%2 992 00014%0%Health Center RevenueMidlevels35 Residents2121 Total Grant2,992,00032%2,992,00014%0%Contractu als(4,085,500) 44%(10,177,000) 48%149%Total9,312,500100%21,287,000100% Guidian Healthcare Consulting 2009 Payor Mix & Operations ManagementCase Study #120092015 Service Area Payor Mix2009 Estimated % Market2015 Projected % MarketMedicaid46,00010%47,6258%Uninsured 108,07725%141,02825%Medicare37,2538%53,6 179%Public Insurance8,7872%11,4662%Private 239,22254%319,54856%Total439,339100%573, 284100%2009 Estimated Popln2009 Estimated Medical UserMarket Penetration2015 Estimated Popln2015 Estimated Medical UserMarket PenetrationMedical User Market PenetrationMedicaid46,0008,98920%47,6252 1,59645%Uninsured108,0772,7753%141,02814 ,19910%Medicare37,2531,2263%53,6173,6887 %Public Insurance8,7874795%11,4661,13510%Private 239.

6 2223,2401%319,5487,6062%Private 239,2223,2401%319,5487,6062%Total439,339 16,7094%573,28448,2248% Guidian Healthcare Consulting 2009 Payor Mix & Operations Managementby User20092015 PayorMixMedical User Payor MixCalculate Payor Mix 2009 Estimated % Users2015 Projected % UsersPayor Mix ChangeMedicaid8,98954%21,59645% 17%Uninsured2,77517%14,19929%77%Medicare 1,2267%3,6888%4%by Service LineTTHEHE H HOWOWTTOO Public Insurance4793%1,1352% 18%Private 3,24019%7,60616% 19%Total16,709100%48,224100% TTHEHE H HOWOWTTOO Assign a unique identifier to each Payor type in the patient management system Verify insurance coverage with each patient at every visit and make sure they are entered into the patient management system correctly TTHEHE W WHYHY Reportable on the UDS Needed to determine how CHC is positioned in market Needed to determine how much of the 330 grant is being used to treat the uninsured Needed to determine how much of the 330 grant is being used to treat the uninsured Use information to evaluate how you can cross sell services to existing users Guidian Healthcare Consulting 2009 Payor Mix & Operations Managementby Visits20092015 PayorMixMedical Visit

7 Volume Payor Mix2009 Estimated % Visits2015 Projected % VisitsPayor Mix ChangeMedicaid25,29862%60,77553% 14%Uninsured9,55923%32,66129%22%Medicare 2,8327%8,5497%8%TTHEHE H HOWOWTTOO Public Insurance1,3463%4,9304%31%Private 2,0415%7,6587%35%Total41,076100%114,5731 00% TTHEHE H HOWOWTTOO Use patient management system to generate report detailing # of encounters by Payor Evaluate EOBs to determine payment per encounter Use information to calculate number of visits per user by Payor type TTHEHE W WHYHY Project annual revenue budget Project additional capacity needed by increasing # users in any given Payor categoryEl t di iti i tt b l Evaluate disparities in user patterns by Payor class Can complete an ICD-9 evaluation to determine if one Payor class is sicker than another Guidian Healthcare Consulting 2009 Payor Mix & Operations Managementby Visits by ServiceVisits/UserEstimatedVisitsPayorMi xPayor Mix by Service UsersFP

8 Only All Medical FP Only All Medical FP Only All MedicalMedicaid1, ,3927,11727%34%Uninsured2, ,3084,45927%21% ,5242,52413%12%Visits/UserEstimated VisitsPayor Mix ,5 4,5 43%%Public ,9652,96515%14%Private 1, ,5913,87818%19%Total6,37119,78020,943100 %100% TTHEHE H HOWOWTTOO Further segment data by service line to understand different utilization patterns for different services by Payor TTHEHE W WHYHY Services will have different Payor mixes Budgeting Implications! Determine where you can cross sell services to increase utilization Determine where you can cross sell services to increase utilization Services will have varying utilization by Payor type Guidian Healthcare Consulting 2009 Payor Mix & Operations Managementby Charges20092015 PayorMixMedical Gross Charge Payor Mix2009 Estimated % Charges2015 Projected % ChargesPayor Mix ChangeMedicaid5,535,00065%14,579,00057% 13%Uninsured1,614,80019%6,049,00024%24%M edicare740,5009%2,451,30010%10%TTHEHE H HOWOWTTOO Public Insurance220,0003%884,0003%33%Private 414,7005%1,706,4007%37%Total8,525,000100 % 25,669.

9 700100% TTHEHE H HOWOWTTOO Generate reports from the billing system to show gross charges by Payor & segment by: by plan by service by provideryp TTHEHE W WHYHY Determine which Payor class utilizes services at the highest rate Determine which providers are most productive (levels playing field for revenue evaluation) Compare with net revenue to determine who is best Payor Guidian Healthcare Consulting 2009 Payor Mix & Operations Managementby Net Revenue20092015 PayorMixMedical Net Revenue Payor Mix2009 Estimated % NPSR2015 Projected % NPSRP ayor Mix ChangeMedicaid3,597,75069%10,467,72264% 8%Uninsured888,14017%3,326,95020%19%Medi care387,2827%1,282,0308%5%PublicInsuranc e74 1401%297 9082%27%Public Insurance74,1401%297,9082%27%Private 241,7705%994,8316%30%Total5,189,082100% 16,369.

10 441100% TTHEHE H HOWOWTTOO Generate reports to s Work with billing department to ensure that all EOBs are entered into system timely & accurately Work with front office staff to be sure that users are assigned to the correct Payor class TTHEHE W WHYHY Net revenue is actual dollars into CHC Used to create budget projections Helps CHC manage cash flow Evaluating net revenue by Payor can red flag issues with a payorgypygpy Look at AR by Payor class to identify potential issues with a Payor Guidian Healthcare Consulting 2009 Payor Mix & Operations ManagementComparing the ResultsUsersVisitsGrossChrgNPSRP ayor Mix Calculations Comparison 2009 UsersVisitsGross ChrgNPSRM edicaid54%62%65%69%Uninsured17%23%19%17% Medicare7%7%9%7%Public Ins