Preparing for the changes in healthcare: Part 2 Operational Improvement

Both healthcare providers and payers are under a lot of pressure due to rising costs as well as governmental requirements and regulations. To better serve their customers and to stay ahead of the challenges, health care enterprises must improve their operational as well as financial performances. Many organizations will have their own in-house consultants or management team, but not all. Any health care organization will benefit from seeking healthcare management consulting to improve their strategies and achieve their goals.

Congress passed health “insurance reform” on Sunday night and the President will sign into law shortly, we as both consumers of healthcare as well as those who work in healthcare will see changes as costs go up and government increases its regulatory role. It is also likely that reimbursement will decrease. It will be interesting to see how it all unfolds over the next few years but preparing for the future is now even more important. Not only is the financial aspects critical but making sure your healthcare organization is running at peak efficiency is critical.

Improving Operational Performance
The operational aspect of a health care organization must also be strengthened through the help of healthcare management consulting. With a strong backbone, organizations can implement the right programs and services. The organization can set new goals in order to increase effectiveness, efficiency and productivity.

With these elements in the right place, the programs can better serve the customers and provide higher quality care. With a new focus, the organization will meet government regulations and have enhanced ways of communicating with physicians and other health care professionals.

Improving Healthcare Profitability for Providers Part 4: Improving Collections

I hope the past three posts have helped healthcare practices begin to think about all the important ways that they can improve profitability without working harder, seeing more patients or laying off staff. This post will focus on methods to improve collecting what you bill.  I have seen many practices increase production as a solution to increase profits.  Typically that is done without an eye towards collections.  When this happens everyone works harder, gets burnt out and administrative cost rise but total revenue barely goes up.  We at BHM Healthcare Solutions recommend to first improve the collection process.  We also have a saying that what is measured is managed so our first step is setting up metrics and benchmarks.

Here are three ways to measure performance in collections:

1. Months in gross fee-for-service AR – this benchmark tells you how many months it takes to get paid –Divide total AR by 1/12 annual gross fee-for-service charges.

2. Percent of total AR over 120 days –Top performing organizations will see less than 10% of AR more than 120 days old

3.Adjusted fee-for-service collection percentage – focuses on the money you expect to collect. Take 12 months of collections, subtract refunds to insurers and patient, and multiply the difference by 100.  Divide this figure by gross charges for the same period minus contractual discounts set by insurers.

The above three simple measures are a good place to start tracking monthly. The next step is to set organizational goals. Because collecting balances is numbers oriented, it is important to set quantifiable work goals which helps produce results. Set both organization wide, and individual collector goals. Develop standard processes for collection of account receivables. Finally award employees for meeting collection goals.

Finally it is critical to utilize collection technology. Some examples would include:

1. Utilize Electronic Claims –Will enable you to receive payment much more quickly –Send claims directly to the payer, rather than going through a clearinghouse whenever possible

2. Utilize Electronic Remittance and Fund Transfer –Automatically post payments and capture information eliminating hours of manual data entry

3. Scan documents instead of making copies

4. Utilize online statements and payments

5.Utilize PDAsUtilize charge-capture software and take it to the hospital where doctors often forget to document services rendered

Improving Healthcare Profitability for Providers Part 3: Optimizing Coding

The first two blog posts on improving profitability were about reducing no shows and collection at point of service.  Today’s post will be on the importance of corect coding.  We will use the example of outpatient psychiatric services but the concept holds true for any situation.  You as providers need to make sure the services that are being delivered are coded accurately and correctly thus maximizing reimbursement for services rendered.

All E/M and psychiatry codes are currently included in Category I. Nearly 1/3 of all services reported by physicians are E/M services. The CPT codes reported on the health insurance claim form or billing statement should be supported by the documentation in the medical record.  Three similar CPT codes:  90862, 90805, 99214. All three have different requirements and significantly different reimbursement rates.  In fact if your practices is billing $100,000 per year in  90862 but are actually delivering a more comprehensive service ( as most of our clients do) than by correctly coding the practice can bill an addition $67,000 by correctly coding and documenting services delivered.  That is a 67 percent increase.

The exact codes are determined by the combination of different levels of history taking, examination, and medical decision-making performed by a physician or certain face to face time.The following components are used to determine the level of E/M service: History, Examination, Medical decision making, Counseling, Coordination of care, Nature of presenting problem, Time.

Correct documentation is critical and cannot be addressed here.  For correct E&M coding either time or complexity of patient encounter is the critical factor.  Please contact us for more information on how your healthcare entity can improve it’s bottom line.

 different requirements and significantly different payments

Healthcare Insider Secrets for Healthcare Provider’s to Improve Profitability: Part One No Shows

This week our Healthcare Insider blog is going to post daily tips for providers to rapidly improve their bottom line.  In an era where revenue is decreasing but costs are increasing, staying in business ( making a profit) is even more difficult. Payors are increasing decreasing payments through reduced fee schedules or increased denials as well as increasing number of uninsured patients. Payors including governmental payors are at the same time requesting increased information from providers and increased rules which increase the cost to deliver the healthcare services.  We will address five areas that if addressed can rapidly improve your companies bottom line.

We will start with the big issue of No Show.  I recently met with a few clients and discussed their no-show rate.  They range from a low of 20% to a high of 45%.  Although the client with the no-show rate of 20% was very proud of their ”low ” no-show rate.  Even with this “low” no-show rate, the practice  was losing hundreds of thousands of dollars per year.

Missed Appointments

Interrupt the flow of patient care and impede clinic productivity 

A missed appointment amounts to reduced billing and missed revenue 

Four steps an organization can implement in order to decrease their no-show appointments

Charge for Missed Appointments

1.Strategy works well  for reduction of follow-up no-shows

2.Ineffective for missed intakes

3.Billing missed appointment fee not fee for scheduled service

4.Billing insurance companies for services not rendered is illegal

5.Helps track no-shows

Minimize No-Shows

1.Recognize that any activity that reduces the frequency of no-shows is a revenue-generating activity.

2.Make reminder calls for upcoming appointments

3.It works best when reminders reach the consumers one to three days ahead of their appointments

4.Follow up on recent no-shows

5.Call patients who failed to appear this week

6.Survey them as to the reason for their missed appointment

7.Reschedule next appointment

Track No-Shows

1.Since no-shows are now being charged even a minimum fee one can track this activity more easily

2.Analyze no-show statistics

3.Use this knowledge to target reminder efforts

4.Use this knowledge to change scheduling

Overbook:  This is an effective strategy to  protect revenue from no-shows

1.Overbooking requires a good understanding of your no-show statistics

2.Wave scheduling 

Using these four steps practices can reduce no shows and improve their bottom line.  Please contact us to sign up for a free practice evaluation.

Heart Attacks Increased with Depression

The NYT reported on February 24 about increased heart attacks after job loss.  Numerous studies have reported on stress, depression, and  job loss increaseing heart attack risk. The latest study in 2009 led by Sarah A. Burgard, a professor of sociology and epidemiology at the University of Michigan, found that “persistent perceived job insecurity” was itself a powerful predictor of poor health and might even be more damaging than actual job loss.  We recently posted a blog on behavioral health prevention.  We have a series of behavioral health prevention articles on our website that address several areas of behavioral health prevention.  I suspect that although the new mental health parity rules just release will dramatically increase healthcare costs one benefit may be increased behavioral health prevention of  other medical illnesses such as heart disease. We at BHM can help develop cost-effective management programs using detailed data analysis to improve cost effective care.  I will be posting more articles on this topic as reducing health care costs while maintaining quality is a national debate.

Technology Changes Business Travel

I read with interest a recent article about airlines loss of business travelers over the past few years.  Last year business travel was down 60%. They expect business travel to be up this year.  The article went on to say that the industry does not expect to get back any more than half the  business it lost because of technology advances.  We recently assisted a managed care company to become URAC accredited in 3 areas over a  short period of time.  This would have in the past involved lots of travel and on-site meetings.  We did all of it with just one face to face meeting (excluding  a mock survey and the actual URAC survey).   All the rest of the preparation was done via web conferencing.  This reduced the cost by at least half.  Not only was it very cost-effective but the technology lead to superior results, possible because of the way you can focus participants using web-based technology.  If your organization needs high quality cost-effective health care consulting services please contact us for a free consultation.