IN THIS ISSUE
Fall 2015  
Provider Based Clinics: Do Qualifying Requirements Outweigh the Continually Shrinking Benefits?
By Johanna Epstein
Hospitals across the county continue to establish provider-based clinics with the understanding that the anticipated professional and hospital outpatient reimbursement is a financial advantage for the Health System as a whole. It goes without saying that the Provider-Based Rule (PBR) found in the Code of Federal Regulations is extremely complex and in many instances, less than straightforward. While many hospitals enjoy increased revenue by implementing provider-based clinics, it is imperative that these same organizations dedicate the time and resources to ensuring that these clinics meet all the qualifying requirements in order to remain compliant in the event of an audit by the OIG.
Over the past ten years, CMS and the OIG have continued to review provider-based clinics as a result of the increased overall reimbursements made to health systems as compared to the reimbursement were the very same clinic be established as a physician freestanding practice. The pressure to review these clinics and further reduce reimbursement has come with stringent qualifying rules and regulations; particularly around physician supervision, clinical documentation and ancillary service bundling.
Do your provider-based clinics stand up to a threat of audit? Have you recently reviewed your cost to remain compliant as compared to your anticipated reimbursement given the payment reductions occurring year after year?
Culbert Healthcare Solutions can help you analyze your current provider-based clinic environment. With an eye toward future regulatory changes, Culbert’s team of management consultants can arm you with the data you need to determine if the Provider-Based strategy is right for your Health System today and in three years from now.
Optimize or Rip and Replace?
By Alan Worsham
Spotlight Article
Due to the unprecedented number of mergers, acquisitions, and new strategic partnerships in the healthcare industry over the past few years, many organizations are dealing with a mix of disparate EHR and practice management systems, applications and interfaces. This is often a significant impediment to those organizations who desire to function in a more clinically-integrated fashion. These organizations must decide: should we enhance our existing mix of systems, or should we replace them with a new, integrated system? Of course, there is no single or simple answer to this question. Instead, we advise our clients that making the right decision requires a deliberate and structured process.
Where are we today?
The first step in the decision-making process is to clearly understand what is working well and where there are problems or issues. This “current state analysis” should consider multiple perspectives and include input from a broad range of stakeholders. It is critical to understand how the current systems environment impacts key areas such as clinical quality and effectiveness, patient safety, operational efficiency, revenue cycle performance, population health, regulatory compliance, access to care, reporting requirements, and the patient experience. At the conclusion of this process, organizations should have a specific list of desired areas for improvement.
Where do we want to go?
Lewis Carroll wrote in Alice in Wonderland, “If you don't know where you are going any road can take you there.” Unfortunately, organizations often evaluate their options for a future systems platform without first understanding where they want to go. Of course any decision will get them further down the road but at the conclusion of the journey they are likely to end up somewhere they didn’t want to be. High-performing organizations who get the biggest return from their IT investments spend the time to identify their specific goals and objectives before evaluating solutions. These goals will be unique to each organization and should be directly correlated to the current state analysis. They might include examples such as:
Features and functionality: Online patient portal allows for direct appointment scheduling, online bill payment, and patient data entry; ability to integrate medical devices; automatic prompts for Meaningful Use measures
Performance improvements: Reduce unnecessary lab tests; increase patient volume; accommodate additional patient volume with existing FTEs; increase cash collections
Clinical care: Emergency Department has immediate access to notes and test results from ambulatory clinics; produce reconciled medications list inclusive of all care entities; reduce readmission rates;
Strategic initiatives: Easily share clinical information with referring physicians; strengthen strategic relationships with key IPAs; enhance ability to recruit top-tier residents; support our growth plans; enable us to more effectively participate in ACOs and pay-for-performance initiatives
How do we get there?
Once an organization understands where they are and where they want to go, they are ready to identify and evaluate options for their future systems platform. There are many ways to go about this and the best approach for each organization will vary based on its current state, desired goals, timing, budget, strategic initiatives, regulatory environment, and many other factors. That said, we see the best results when the decision process is structured, impartial, and follows these guidelines:
  1. Calculate the Total Cost of Ownership: It’s important to quantify all expenditures needed to acquire and implement the new solution as well as the cost to support that solution over a number of years. This includes software license and maintenance, hardware, connectivity, implementation staffing, support staff, training, service fees, financing costs, etc.
  2. Don’t let cost drive the decision: While the overall cost is clearly important, it should not be the main consideration. It is crucial to evaluate potential options against the full list of organizational goals and strategic objectives. Organizations should also take into account their existing skills and expertise, change management capabilities, and industry trends both locally and nationally.
  3. Conduct scenario-based vendor demonstrations: Allow vendors to demonstrate how their system/solutions can meet the organization’s goals. Prepare a list of 10-20 specific “day-in-the-life” scenarios you want each vendor to demonstrate that best represent your clinical and financial priorities.
  4. Evaluate the vendors: This decision will result in a long-term relationship with the chosen vendor. Strive to understand their culture, vision and values, examine their performance with existing and past customers, and consider their financial strength and likelihood for survival in the marketplace.
  5. Seriously consider enhancing the current state: While something new can be exciting, sometimes the best option is to invest in optimizing and selectively upgrading the existing environment. Don’t dismiss this option prematurely.
  6. Focus on the desired ROI: Based on the current state analysis and list of organizational goals and objectives, determine key results to use as project success criteria. Identify percentages or dollar amounts to strive for. Organizations who start with these measurable results in mind are more likely to achieve the desired results.
Deciding on the best EHR and practice management platform for your organization is both complex and critically-important. The answer may include aggressively optimizing and updating the existing environment, or, it may include installing an entirely new system. In our experience, healthcare organizations have the best results when they go through a structured, objective process to match potential solutions with their unique mix of objective and subjective goals and objectives.
Using Cadence Functionality to Promote Utilization with Parameters
By Rachel Miller
Access to care is a primary requisite for managing a patient’s overall health throughout the care continuum. After all, patients who cannot get timely access to the appropriate care are likely to look elsewhere - thus preventing a health facility from being able to effectively manage the patient’s outcome and care costs. Organizations nationwide are faced with continued challenge to ensure access is timely. The efficiency needed to achieve this starts with designing provider schedules enhanced for proper utilization. Over time we have seen many organizations try to address this very challenge, the most successful have been leveraging Cadence system functionality to help drive the fluidity necessary to create dynamic provider schedules.
The following areas of functionality within Cadence provide the ability to create dynamic provider schedules, creating efficient utilization if configured appropriately.
  1. Blocks - blocks within a provider’s schedule allow preferences so that scheduling staff understand where to put specific types of patients. Additionally, blocks provide the flexibility to change as certain type of blocks are unscheduled approaching the date of service. This allows both the preferences of providers and resources in departments but the flexibility to use the appointment slots in other methods so the slots don’t go unused and utilization stays high
  2. Visit Type Modifiers - these types of modifiers allow the ability to modify visit type properties such that the appropriate parameters are followed when scheduling without a scheduler needing to remember extensive preferences per provider and type of visit. This streamlines not only the scheduling process but also system maintenance. Visit Type Modifiers allow for subtle differences between providers without needing to create additional visit types to accommodate. The ability to standardize visit types also gives organizations the foundation to use MyChart to enhance the scheduling workflows
  3. Session Limits - session limits control how many types of visits are allowed to be scheduled for certain times of day or ranges of dates. Along with blocks and visit type modifiers, session limits promote efficiency by providers and teams yet continues to allow the system to have flexibility with parameters
In addition to leveraging the system to provide the fluidity needed, organizations have employed the following lessons learned which have become increasingly effective in their goals toward increased patient access:
  • Utilize the new system (Cadence) functionality thinking about optimal setup versus a simple replication of a legacy system
  • Don’t forget to manage the change with the staff. Change can have varying levels of impact on your end users
  • Ensure staff understand new workflows both within the system and processes that may change as a result of the implementation or optimization
  • Create documentation that end users have easy access to before, during and after the implementation or optimization effort. This can include a crosswalk of terminology between the new and legacy systems, workflow processes or tips and tricks documents. These documents can typically be linked from right within the application
  • Validate and update each users security template with leadership so they understand what the user can schedule (overbooks, override held time, etc.) Involve all applications with security process and testing validation.
  • Continued support from leadership - change is constant!
Utilizing the critical functions in Cadence to create provider templates for scheduling as well as employing the lessons learned from other organizations, an efficient manner for patient access to care can be created and continually approved upon.
Outsource or Stay the Course?
James Harris
Background:
Recently, a medical group client contacted Culbert to assist with a revenue cycle evaluation to answer this question. The group over the past year, had installed a new electronic medical record and patient billing system; saw its CFO and Practice Administrator leave the group following long tenure for both individuals; experience cash flow problems as a result of insurance credentialing neglect and increased Accounts Receivable due to the billing system conversion.
The revenue cycle evaluation focused on staff interviews, operations and data reviews. Through staff interviews it was determined that checks were held in “the drawer” until they were posted to the patient’s accounts; a practice that was changed by most practices years ago because most practices need the money in the bank TODAY and their auditors insist on tighter cash controls. Posting for the current month could not begin until the prior month’s business was closed. The month could not be closed until all payments received during the prior month were posted. It took from five to fifteen days into the next month for checks to be posted and reconciled.
The Business Office staff, under the direction of a long tenure manager, was assigned to specific insurance payers. Their duties included posting electronic and manual remittances, correspondence, denials and appeals, patient phone inquiries and follow up on unpaid claims. Given the priority of posting payments and responding to phone inquiries, the staff had little time to follow up on unpaid insurance claims. Based on industry benchmarks, the number of Business Office staff was appropriate for the group’s patient activity.
The staff member responsible for reviewing charges and processing electronic claims submission splits their time between billing and staffing the check-out desk. Since the computer conversion six months earlier, there was no effort to resolve outstanding encounters at the end of each month. There were over 200 open encounters with appointment dates 60 days or greater and 100 open encounters that were 30-60 days old. There was approximately $60,000 in EDI errors that prevented claims processing. Completing encounters and processing charges as soon as possible was not a priority.
Self-Pay accounts from the legacy system had not received monthly statements for 4-6 months. Referrals to the collection agency had not occurred for either the legacy or current system since the conversion seven months ago. Two collection agencies were used for bad debt referral with similar results. One agency had a two tier fee schedule based on the age of accounts. Since the accounts that were referred were over 270 days old, the group had to pay the higher rate.
Credit balances in the form of deposits, patient and insurance overpayments were not reviewed and resolved on a systematic schedule. While some of these credit balances were the result of incorrect adjustments or posting errors, it was difficult to determine true credit balances without an in depth review. Since there were multiple accounts receivable files there were credit balances that could be applied to open balances in other systems.
Recommendations:
  • Deposit checks to the bank on a daily basis. Create batches, with control totals, by someone other than the posting staff. Scan checks and remittances prior to distribution to the posting staff.
  • Complete monthly close within 2 business days of month end.
  • Revise Business Office staff responsibilities to prioritize payment posting with a dedicated individual. For the remaining staff, emphasize follow-up with the payers on unpaid claims.
  • Bill encounters within 2 business days of the date of service.
  • Resolve the backlog of encounters and be current within 2 business days of month end.
  • Negotiate a new rate for the more expensive collection agency service.
  • Establish a self-pay review and collection agency referral procedure to bring the referral process current. Refer accounts monthly at 90-120 days from date of service.
  • Establish monthly review and resolution of credit balances.
  • Provide dual computer monitors for payment posting and follow-up staff.
Results:
  • Over $40,000 was deposited from “the drawer” and on a daily basis an average of $25,000 is deposited 5-8 business days quicker.
  • Scanned batches were available 5-10 day quicker.
  • Month end close occurred within 2 days following the first month end.
  • Charges are posted within 2 business days following the date of service.
  • The backlog of open encounters has been resolved.
  • Posting is more timely and accurate as the dedicated staff becomes more knowledgeable.
  • Insurance follow-up has become the priority for the remainder of the staff.
  • New rates were negotiated with the collection agency.
  • Self-pay and referrals to the collection agency are processed monthly.
  • Collections after these changes were 101% of budget first month and 99% in the second month compared to an average of 87% in the prior 4 months. Collections have remained over 94% of expected in following month with a 15% reduction in open Accounts Receivable.
  • In the first month, 32% of the current charges were resolved in the same month compared to the prior month’s rate of 23% resolved within the same month.
  • Daily and monthly reports were implemented to monitor performance.
Outsourcing would require the practice to contract with a vendor, allow 30 days for them to recruit staff, 30 days to train on the group’s system, 30 days to work accounts and 30 days to see results. The group has good staff that needed direction and process improvement. Within 60 days, half the time of outsourcing, they were able to see dramatic financial results. The CFO reports “we have been able to improve our collections and AR position substantially thanks to the structure and tools Culbert helped us put in place”.
Final recommendation: Stay the course.
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