financially position the hospital for the future (part 1) · •need to develop a strategic plan...

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Ralph J. Llewellyn, CPA, CHFP

Partner

Eide Bailly LLP

[email protected]

www.linkedin.com/in/ralphllewellyn

701-239-8594

Road to Value:

What’s Most Important to Know and Do to

Financially Position the Hospital for the Future

(Part 1)

1

mailto:[email protected]

http://www.linkedin.com/in/ralphllewellyn


Positioning Agenda

• Monitor and Improve Financial Viability

• Increase revenues

• Decrease expenses

• Monitor and Improve Quality

• Improve Data Management Skills

• Access to Ongoing Education

• Enhance Value

2


Top Priority

• Accountability must be assigned and accepted

• No excuses

3


Increasing Revenues

• Attempts to increase (or at least maintain)

revenues is critical

• Physician relationships

• Volumes

• Revenue Cycle

4


Physician Relationships

• The move to value based and population management will require providers to enhance their relationships with their primary care providers• Employed

• Contracted

• Visiting

• Other

• Physicians drive covered lives and ultimately what providers are involved in care

5


Physician Relationships

• Improved relationships require an alignment of

vision

• Confidence and trust between physicians and

hospitals

• Physician input in change

• Physician champions

• Meaningful and timely feedback

• Shared levels of accountability

• Recognition and rewards

• Aligned vision

6


Confidence and Trust

• Communication

• Key to develop strong positive relationships

• Failure to properly communicate leads to distrust

• Board involvement

• Board position

• Promotes discussion of physician issues

7


Physician Input in Change

• Input on significant issues

• Creates or enhances shared partnership and

vision

• Creation of Decision Flow Charts

8


Physician Champions

• Physician champions can assist garner support

on difficult issues

• Provide necessary documentation, vision, and

arguments to champion

• Champion promotes necessary positions

9


Meaningful and Timely Feedback

• Physicians expect timely decisions and action

on issues

• Hospitals are frequently slow in acting on

issues

10


Shared Levels of Accountability

• Establishment of expectations and

accountability

• Physician/Provider Compact

• Set expectations

• Financial

• Otherwise

• Hold accountability

11


Shared Levels of Accountability

• Identification of tools and processes to enhance

productivity

• Streamline processes

• Improve productivity

12


Recognition and Rewards

• More than just compensation

• Provide leadership development

13


Volumes

• The focus on volumes is changing

• Past

• Surround patients with services and provide as many

services as possible to each patient

• Future

• Maintain the number of services rendered by facility by

increasing the number of lives covered and providing

minimum number of services and least costly services to

improve their health and address chronic issues

14


Volumes

• Future

• Total cost of population health will be most important

• Focus on increasing market share

15


Market Share

• Community Health Needs Assessment

• Understand current market share

• Understand future market needs

16


Community Health Needs Assessment

(CHNA)

• CHNA provides vital information to determine

opportunities and risks to current market share

• Recommend completion of CHNA even if not

required

• View the CHNA as an opportunity and not just a

legal requirement

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(CHNA)

• Need to develop a strategic plan based on the

findings of the CHNA

• Focus on addressing issues identified in CHNA

through development of services or

collaboration with others to provide the

necessary services

• Send the message that you are an engaged

party in the provision of the healthcare needs in

the community18



(CHNA)

• Monthly reporting on status of plan

• Increase the number of covered lives and retain

services locally when possible and appropriate

19


Market Share

• Providers need to understand their market

share

• Percentage of market share captured

• Who is capturing the market share you are missing

• Cause for lost market share

• Quality

• Real

• Perceived

• Physician preference

• Location

• Hours

• Awareness

20


Market Share

• Understand the future of your market

• Population trends

• Inpatient trends

• Outpatient trends

21


Market Share

• Population trends

• Increases and decreases

• By subsections of the market

• Changes in the following:

• Age

• Sex

• Ethnicity

• Other

22


Market Share

• Inpatient service trends

• By service line

• Data will show current volumes as well as anticipated

changes over a 5 and 10 year time period for service

area

• Volumes for total population

• Includes all providers

23


Volumes – Inpatient Trends

Source : The Advisory Board

24


Market Share

• Outpatient service trends

• By service line

• Data will show current volumes as well as anticipated

changes over a 5 and 10 year time period for service

area

• Volumes for total population

• Includes all providers

25


Volume – Outpatient Trends

Source : The Advisory Board

26


Revenue Cycle

• Changes in the industry have increased the

challenges in the revenue cycle

• Strategies

• Establishment and adherence of policies and

procedures

• Improve quality of documentation and coding

• Maximize use of technology

• Drive down days in accounts receivable

27


Revenue Cycle – Patient Access

• Upfront processes are becoming more

important than ever

• Higher levels of patient coinsurance and deductibles

• Increasing mobility of patients

• Changes in health insurance carriers

• Significant variances in patient access

processes

28


Revenue Cycle – Identity and

Responsibility

• Hard to collect if you don’t properly identify the

patient

• Photo identification

• Insurance cards

• Insurance verification

• Processes must be established

• Accountability must be assigned

• After hours included!!

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Responsibility

• Identification of coinsurance, deductibles, and

copays

• Identify estimates prior to scheduled services

• Estimate amounts for non-scheduled services

• Collect estimated balances

• Identify loan sources

• Establish payment plans if necessary/appropriate

• Includes Emergency Room for non-emergent patients

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Responsibility

• Identification of coinsurance, deductibles, and

copays

• Identify charity care recipients

• Application

• Presumptive methods

• Reschedule services or redirect place of service is

appropriate

31



Responsibility

• Back-end

• Establish policies

• Payment plans

• Collection agencies

• Follow policies as identified

32


Revenue Cycle – Charge Capture/Coding

• Best practice facilities capture the revenues for

services they are rendering

• Significant area of opportunity for most facilities

• Common areas of confusion/lost revenues

• Outpatient Nursing Procedures

• Pharmacy

33


Outpatient Nursing Procedures

• Outpatient nursing procedures

• Facilities miss these opportunities

• CAH

• PPS

• IV therapy, injections, Foley catheter insertions, etc.

34




• Lost charges occur due to a lack of understanding of

what is actually separately reportable

• Nursing documentation can affect ability to capture charges

• Start times

• Stop times

• Site

• Drugs

35




• Recommend a team from nursing and HIM meet

frequently to discuss documentation and charge

capture opportunities

36


Charge Capture/Coding

• Pharmacy

• Pharmacy charges are often missing from claims

• Totally missing

• Errors in proper reporting of units

• Overreliance on systems

• Dispensing units

• Unit conversion factors

• Need to develop processes to review and update

processes

37


Documentation/Coding

• Documentation and coding are importance for

all providers

• CAHs included

• Documentation and coding tell payors how

complicated of patients are being cared for

• Failure to properly capture information tells payors

we are caring for less complex patients at a higher

cost

38


Pricing

• Charges for rural services frequently is well below that of larger counterparts for the exact same services• Often 20-40% below competitors

• Sometimes consistently below cost

• Lack of appropriate pricing strategy may caused by numerous issues• Restraints placed on Management by Board

• Lack of understanding of reimbursement impact

• Inability to access market based data

39


Pricing

• Successful providers have strong pricing

strategies

• Use of market based data

• Commercial sources

• MedPar

• 50th - 75th percentile pricing

• Do not need to high price provider

• Annual updates to pricing

40


Timely Filing

• Why capture the charges and then not file them

timely?

• All Medicare claims must be filed within 1 year

of service

• Other payors may vary

• 90 days

• 30 days?

• Many facilities still missing the deadlines!

• Monitor write-off’s

• Separate account for tracking


Denials Management

• Advanced Beneficiary Notices / Medical

Necessity

• Need to manage denials

• ABNs are not an option

• This is an issue of liability not a determination of proper care

42


Denials Management

• Advanced Beneficiary Notices / Medical

Necessity

• Track denials

• Service

• Physician

• Staff performing service

• Etc.

• Emergency Room services are not exempt

• Increased frequency of denials

• Monitor

• Follow up with providers

43


This presentation is presented with the understanding that the information contained does not constitute legal, accounting

or other professional advice. It is not intended to be responsive to any individual situation or concerns, as the contents of

this presentation are intended for general informational purposes only. Viewers are urged not to act upon the information

contained in this presentation without first consulting competent legal, accounting or other professional advice regarding

implications of a particular factual situation. Questions and additional information can be submitted to your Eide Bailly

representative, or to the presenter of this session.

Questions?

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financially position the hospital for the future (part 1) · •need to develop a strategic plan...

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