2183–Blending Insights with OptimizationUsing Client Metrics to drive changeMatt Wormser, GE Healthcare. Laura Steinkraus, Schumacher Group

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Agenda

Revenue cycle challenges

Lessons from the other industries

Putting theory into practice: Schumacher experience

The use of cross-functional teams and root cause analysis

Takeaways

Q & A

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Endemic failure in the revenue cycle

Typical organizations see between 5% and 20% of their claims fail upon initial submission*.

Imagine if one in ten products you purchased were defective upon initial use?

Our challenge is to implement systems to prevent past failures from recurring.

* Source: internal GE documentation on “clean claim” performance, HFMA MAP metrics.

7

Core tenets of quality improvement

Cross functional teams

Root cause analysisEliminate variation

Define>Measure>Analyze>Improve>Control

Process analysis & redesign

Continuous improvement

Six SigmaTotal Quality Management

Reengineering

8

What is a ‘defect’?

Think of the revenue cycle as a manufacturing line creating billing successes.

A defect is anything that requires rework in order to get paid – rejected or denied claims requiring calls to the patient, clinic or payer.

Each defect delays payment, driving up AR days and leading to reduced collections.

Industry estimates rework costs at $15 per denial.

9

Toyota Production System

Jidoka: “Quality must be built in during the manufacturing process! If an equipment malfunction or a defective part is discovered, the affected machine automatically stops, and operators cease production and correct the problem.” *

Daily monitoring the use of reporting tools / analytics, along with a commitment to “doing it right the first time” are critical to achieving the same results in the healthcare revenue cycle.

* Source: http://www.toyota-global.com/company/vision_philosophy/toyota_production_system/

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The holy war of healthcare billing

Billing Team

IT:

Just say “no” and hope they go away.

Back End:

“If only they would get off

their duffs and enter good

data.”

Front End:

“If they had any clue what we

have to go through up

front…”

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The Iron Triangle of billing success

Revenue

Cycle Succes

s

People:

Train, inspire, reward, succeed

Process:

Clear processes, enforced

through training, reporting

Technology:

Leverage what you have,

implement what you don’t.

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Building project teams to drive success

The revenue cycle covers all elements of the enterprise – project teams need to as well.

• The billing office: The front line of seeing what didn’t happen upstream.

• The front desk (scheduling, pre-arrival, charge entry team, etc.): Critical to success at each stage.

• IT: Provides the technology backbone of any successful enterprise.

• Training: Ensures that process and knowledge gets disseminated successfully.

13

Team composition

Leader: drives balance and accountability.

Regular members: a core group meeting typically weekly to review metrics, research issues and make and track action items.

Ad Hoc: “SMEs” (subject matter/process experts) called in for specific issues.

Resource: Called in as needed for specific projects/issues.

Executive Sponsor: Responsible for driving the process and serve as escalation point.

14

Keys to success

T – E – A – M mentality: think as an enterprise to succeed as one.

No turf mentalities allowed. A surprisingly small number of bad attitudes can doom a team. Productive skeptics are welcome.

Celebrate successes, understand failures.

Cycle: the work can be a grind, but it’s highly valuable. Enroll a cross-section of the enterprise to get exposure to multiple roles.

Have fun – it’s actually possible!

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Six Sigma’s “5 Whys”

Why did my claim get denied?• Because the payer indicated that the patient was not eligible on service date.

Why did we send a claim for an ineligible patient?• Because we weren’t able to verify insurance prior to patient arrival.

Why weren’t we able to verify insurance?• Well we tried, but our staff-person missed that the patient was covered under

a Medicare Advantage plan (Medicaid HMO, carve out plan, etc.).

How did the staff-person miss that key data?• Because our training materials were not up to date (time constraints during

check-in / understaffed pre-arrival team / new hires / poor tools, etc.).

Why were my training materials not up to date?• ICD-10 / ACA / insufficient funding / multiple mandates, you name it!!!

16

Change = Challenge

Process change is inherently difficult and underestimated.

It is human nature for us to gravitate back to ‘the old way” when new tools and processes are put in place.

Simply throwing technology at a problem is doomed to fail.

Monitoring is critical! Process changes, need to be continually monitored until the “new way” becomes the norm. Likewise to make sure you got it right!

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Schumacher Group Medical Billing

• Medical staffing and billing group active in 28 states, 264 facilities.

• Primary focus Emergency and Hospital staffing and billing.

• Over 3,000 providers treating 4 million patients annually.

• Management changes in late 2012 led to process improvement effort.

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Pre-existing Challenges & Opportunities

Departure of existing leadership at same time.

Departments working in Silos.

Lack of Communication.

Outdated and inefficient policies and procedures.

Practice management application split between IT and operations.

Incomplete knowledge of existing technology setup

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Strategy

Quick Wins.

Cross department participation.

Key Stakeholder buy in.

Work out sessions.

Cross Training

Monthly KPI report outs to executive leadership

GE “Performance Manager” Partnership to help leverage technology

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Key Performance Indicators

• Claim and Charge Lag Days• EDI Remittance Posting Rates and Top non-posting

reasons• Eligibility Automation, Utilization and Verification Rates• Eligibility payer gap & rejection analysis

• Denials Analysis by category, “scenario”, payer, clinic, etc.• Rejections (pre-adjudication) by category, payer, etc.• Clean Claims rate• Paper claim volume & drivers

• Technology opportunity assessments• Claim form setup / logic issues• Assessments for additional automation opportunities.• Process improvement analyses – Credentialing, Call Center,

Insurance Verification, etc.

BillingPerformanceMetrics

Pre-Billing PerformanceMetrics

OpportunityAppraisal

21

Denials Improvements

2012-12

2013-01

2013-02

2013-03

2013-04

2013-05

2013-06

2013-07

2013-08

2013-09

2013-10

2013-11

2013-12

2014-01

2014-02

2014-03

2014-04

2014-05

2014-06

2014-07

2014-08

2014-09

2014-10

2014-11

2014-12

2015-01

10.00%

12.00%

14.00%

16.00%

18.00%

20.00%

22.00%

24.00%

26.00%

Denied Claims Since Project Inception

% Billing Denied % Inv Denied

Per

cen

t D

enie

d20,000 fewer

denials per

month

Note: for reporting purposes, a “Denial” is any ERA with a “Denied” status, or $0 payment and allowed amount.

22

Categories, denial scenarios help drive root cause analysis

Scenario 2014-08 2014-09 2014-10 2014-11 2014-12 2015-01 6 Mo Total TrendCO22,N192 $2,291,462 $3,064,392 $2,450,512 $2,501,260 $3,134,312 $2,204,047 $15,645,985OA96,M118,N1 $1,284,907 $944,375 $1,078,560 $830,749 $1,076,063 $1,552,595 $6,767,249CO170,N95 $1,086,119 $726,915 $1,226,606 $666,711 $890,171 $825,350 $5,421,872CO208,M56 $627,318 $657,945 $550,306 $623,181 $950,257 $470,050 $3,879,057CO29 $509,843 $754,794 $674,073 $470,297 $638,968 $788,221 $3,836,196COB7,MA01 $1,053,386 $513,280 $662,245 $424,220 $575,909 $288,850 $3,517,890CO45 $660,580 $516,385 $427,364 $387,649 $192,567 $484,378 $2,668,923CO18,N522 $970,438 $472,230 $129,631 $145,333 $596,600 $170,755 $2,484,988CO18,M86 $913,684 $1,105,870 $182,369 $33,119 $183,086 $2,418,128CO256,N130 $305,468 $485,373 $565,838 $370,449 $388,255 $255,637 $2,371,020OA18 $498,899 $406,853 $367,087 $320,633 $475,575 $289,629 $2,358,676CO22,M54,N192 $326,204 $377,638 $326,347 $383,343 $442,164 $332,343 $2,188,039CO22 $371,989 $349,760 $501,484 $249,896 $278,748 $233,795 $1,985,673COA1,N288 $728,308 $707,812 $163,184 $39,439 $191,555 $1,830,298OA18,N702 $323,197 $414,865 $380,813 $241,018 $235,951 $195,132 $1,790,976CO24 $334,673 $355,185 $415,966 $218,100 $196,204 $201,615 $1,721,743CO29,N211 $216,215 $325,903 $268,240 $145,739 $488,678 $256,797 $1,701,572OA18,MA01,N522 $800,268 $284,958 $201,951 $84,202 $128,015 $93,496 $1,592,890PR27 $217,430 $301,768 $251,782 $198,138 $305,749 $296,469 $1,571,336CO252,N29 $139,350 $84,296 $30,945 $75,894 $370,584 $678,380 $1,379,449CO18,M86,N198 $231,606 $845,021 $6,987 $4,246 $215,140 $1,303,000COA1,N255 $351,967 $663,334 $1,449 $3,232 $282,069 $1,302,051CO16,N58 $209,089 $163,374 $279,249 $185,846 $208,052 $217,989 $1,263,599CO185,N55 $254,836 $267,067 $153,221 $174,673 $221,948 $153,009 $1,224,754PR96,N30 $84,942 $101,661 $131,387 $104,676 $381,765 $414,023 $1,218,454CO252,N29,N475 $74,352 $203,210 $455,631 $114,549 $192,019 $78,795 $1,118,556CO97,M86 $58,483 $404,649 $148,961 $283,720 $147,819 $68,500 $1,112,132COB9,MA01,N90 $224,933 $140,899 $258,271 $150,799 $169,616 $147,620 $1,092,138CO11 $383,985 $66,872 $95,594 $118,903 $189,979 $183,885 $1,039,218CO16,CO45,N55,N59 $1,013,659 $1,013,659PR227,N179 $122,635 $154,472 $218,498 $166,697 $165,305 $183,389 $1,010,996

Denied Charges Total Denied Charges Total Total Charges TrendPayer 2014-08 2014-09 2014-10 2014-11 2014-12 2015-01ECOM LA CAID GE835 9.5% 6.5% 5.1% 5.8% 8.8% 6.6% 7.2% $143,406,911ECOM LA CARE GE835 7.5% 4.3% 5.3% 4.7% 6.6% 3.3% 5.3% $111,815,600ECOM TX CARE GE835 9.4% 6.0% 4.2% 4.2% 4.6% 3.0% 5.2% $96,707,090ECOM UHC GE835 8.0% 9.1% 7.4% 8.5% 9.8% 10.3% 8.8% $91,912,696ECOM TX/FL/OK BLUE GE835 7.4% 6.2% 6.3% 5.5% 6.2% 5.7% 6.2% $64,823,746ECOM MO CARE GE835 6.6% 5.1% 3.0% 2.7% 1.8% 3.0% 3.6% $63,057,711ECOM LA BLUE GE835 6.5% 7.2% 6.0% 6.4% 7.6% 6.3% 6.7% $60,994,910ECOM TX CAID GE835 60.4% 62.3% 62.0% 60.9% 60.2% 60.2% 61.0% $50,255,507ECOM NC CAID GE835 46.1% 49.8% 33.8% 37.6% 49.3% 14.8% 35.5% $48,252,507ECOM HUMANA GE835 #DIV/0! 8.0% 8.1% 8.1% 7.1% 6.8% 7.6% $47,029,230ECOM COVENTRY GE835 12.1% 11.5% 11.7% 11.3% 10.9% 8.0% 11.0% $42,033,273ECOM GA CARE GE835 4.1% 4.1% 3.8% 2.8% 2.8% 3.1% 3.5% $42,022,596ECOM FL CAID GE835 28.6% 49.9% 42.1% 39.4% 4.0% 35.1% 16.1% $41,585,508ECOM AMERIGROUP GE835 #DIV/0! 5.3% 7.0% 4.9% 8.5% 12.6% 7.7% $35,387,608ECOM MO CAID GE835 13.2% 24.4% 17.0% 12.5% 23.5% 16.6% 18.2% $34,408,233ECOM MO BLUE GE835 6.9% 7.0% 7.7% 6.8% 6.7% 6.1% 6.9% $32,255,133ECOM GA CAID GE835 17.4% 18.8% 17.6% 16.8% 18.1% 56.0% 25.6% $32,069,902ECOM AETNA GE835 4.4% 4.1% 4.1% 4.7% 4.6% 3.7% 4.3% $30,802,465ECOM LA HEALTH GE835 9.5% 6.5% 7.7% 10.3% 5.5% 6.6% 7.4% $23,098,829ECOM NC CARE GE835 5.4% 11.5% 3.9% 4.4% 4.1% 3.5% 5.4% $20,854,822ECOM GA BLUE GE835 23.2% 9.0% 8.5% 8.3% 11.4% 9.4% 9.9% $20,426,360ECOM NY CARE GE835 8.3% 6.5% 3.2% 2.3% 7.5% 5.6% 5.3% $19,002,629ECOM TRICARE GE835 5.1% 14.0% 3.7% 4.0% 3.2% 4.4% 5.9% $18,836,276ECOM AR CARE GE835 8.2% 5.4% 4.1% 2.6% 2.8% 2.3% 4.3% $17,910,177ECOM PA CARE GE835 4.8% 4.5% 4.5% 2.6% 12.7% 2.5% 5.1% $16,715,660ECOM CIGNA GE835 11.0% 5.3% 5.9% 5.7% 4.4% 14.5% 8.2% $16,284,584ECOM AR CAID GE835 10.6% 9.1% 8.6% 6.4% 9.2% 10.2% 8.9% $15,445,614ECOM MS CAID GE835 31.8% 19.7% 12.5% 10.8% 12.0% 1.1% 4.6% $15,095,049

Month Credentials Eligibility DocumentsNon- Covered Misc Timely Filing Coding

Denials as a Percent of Billed $2014-08 2.6% 1.3% 1.8% 0.9% 0.6% 0.6% 0.3%2014-09 1.7% 1.2% 2.0% 0.8% 1.0% 0.7% 0.1%2014-10 1.5% 1.1% 1.7% 0.7% 0.6% 0.6% 0.1%2014-11 1.3% 1.1% 1.6% 0.8% 0.5% 0.5% 0.1%2014-12 1.2% 0.9% 1.7% 0.8% 0.6% 0.8% 0.2%2015-01 1.0% 1.1% 2.7% 0.7% 0.5% 0.6% 0.2%

Denials as a Percent of Invoices2014-08 2.7% 1.4% 1.7% 1.1% 1.2% 0.7% 0.4%2014-09 1.8% 1.3% 2.0% 1.0% 1.7% 1.1% 0.3%2014-10 1.5% 1.3% 1.7% 0.8% 1.1% 0.6% 0.3%2014-11 1.4% 1.3% 1.7% 0.9% 1.0% 0.6% 0.3%2014-12 1.4% 1.1% 1.7% 0.9% 1.1% 1.0% 0.3%2015-01 1.1% 1.2% 2.7% 0.8% 0.9% 0.7% 0.4%

23

Transitioning to new web-based tools

23

24

Claim Rejection Improvements

Rejections down

63 percent

25

Eligibility Improvements

2013-01

2013-02

2013-03

2013-04

2013-05

2013-06

2013-07

2013-08

2013-09

2013-10

2013-11

2013-12

2014-01

2014-02

2014-03

2014-04

2014-05

2014-06

2014-07

2014-08

2014-09

2014-10

2014-11

2014-12

2015-01

2015-02

Rate

0.319149727721276

0.338909561216593

0.362263264587089

0.475970725757268

0.602303643508722

0.571712129758725

0.599002540420253

0.714032740041655

0.790081609741353

0.846394378959721

0.865

0.828

0.8622

0.861

0.8554

0.8537

0.858

0.856

0.854

0.848

0.831

0.889427388018276

0.894576965773966

0.870652286569567

0.909

0.907

25.0%

35.0%

45.0%

55.0%

65.0%

75.0%

85.0%

95.0%

Eligibility Verification RateP

erc

ent

of

Regis

trati

ons V

eri

fied

Closure of 86% of

the verification gap

26

Paper Claims Improvements

Sep-12

Oct-12

Nov-12

Dec-12

Jan-13

Feb-13

Mar-13

Apr-13

May-13

Jun-13

Jul-13

Aug-13

Sep-13

Oct-13

Nov-13

Dec-13

Jan-14

Feb-14

Mar-14

Apr-14

May-14

Jun-14

Jul-14

Aug-14

Sep-14

Oct-14

Nov-14

Dec-14

Jan-15

Feb-15

New Claim

0.0946201688546729

0.0907221350078493

0.0741250740596972

0.0652613057547302

0.0722360058223762

0.0705720245727518

0.0684431384334547

0.0675192216580802

0.0609145464539301

0.0611579061528451

0.0703611913030407

0.0728814226999961

0.0570389776143215

0.0581076355158345

0.0634330375897941

0.0545865715146521

0.0487881020028763

0.0517508663140616

0.0490501820484407

0.0505587796887177

0.0592972926752798

0.050017534630896

0.0534576728446562

0.0517219557541821

0.0568400701984676

0.0529707360331067

0.056795254794995

0.0411817036103492

0.0471414064821097

0.0371997184794499

3.5%

4.5%

5.5%

6.5%

7.5%

8.5%

9.5%

Paper as a Percent of Claim Volume – New ClaimsP

erc

ent

Paper

13,500 fewer paper

claims per month

27

Remittance Posting Improvements

Dec-1

2

Dec-1

2

Jan-

13

Jan-

13

Feb-1

3

Mar

-13

Mar

-13

Apr-1

3

May

-13

May

-13

Jun-

13

Jul-1

3

Jul-1

3

Aug-1

3

Sep-1

3

Sep-1

3

Oct-1

3

Nov-1

3

Nov-1

3

Dec-1

3

Jan-

14

Jan-

14

Feb-1

4

Mar

-14

Mar

-14

Apr-1

4

May

-14

May

-14

Jun-

14

Jul-1

4

Jul-1

4

Aug-1

4

Sep-1

4

Sep-1

4

Oct-1

4

Nov-1

4

Nov-1

4

Dec-1

4

Dec-1

455%

60%

65%

70%

75%

80%

85%

90%

95%

EDI Remit to Claim Volume, 3 Month Rolling Average

EDI Remits (invoices) as % of all claims - Rolling 3 Month Average

61% improveme

nt in EDI posting

28

Remittance Edit Improvements

2012-11

2012-12

2013-01

2013-02

2013-03

2013-04

2013-05

2013-06

2013-07

2013-08

2013-09

2013-10

2013-11

2013-12

2014-01

2014-02

2014-03

2014-04

2014-05

2014-06

2014-07

2014-08

2014-09

2014-10

2014-11

2014-12

2015-01

% of $

0.912479245328746

0.935254583139545

0.970652076021117

0.968557414814212

0.970663665277463

0.979310573082371

0.979032276402546

0.979085898608334

1.002 0.972 0.973021987331478

0.978477705405644

0.97628830708792

0.97 0.966977719556014

0.962797795032904

0.970240481567248

0.968464350349681

0.970447974095414

0.960643821485882

0.96559311071022

0.970503100684085

0.966381354608586

0.971596124307383

0.974533980203724

0.976062692832606

0.977910214263338

91.5%

92.5%

93.5%

94.5%

95.5%

96.5%

97.5%

98.5%

99.5%

100.5%

EDI Remit Posting since Project Inception

75% reduction

in EDI remit edits

29

Improvement summary

Denials: 20,000 fewer denials per month

Claim rejections: down 63 percent

Paper claims: 13,500 fewer paper claims/mo

Eligibility verification: Closure of 86% of gap

Remittance posting: 61% increase in posting

ERA remittance “kick-outs”: 75% decline

Clean claim rate: 43% improvement

In sum – a more efficient, successful operation

30

Challenges, Lessons Learned

Managing in a matrix environment.

Resources, resources, resources.

Knowing what we don’t know.

Maintaining support for the effort when time, conflicting priorities exist.

Understanding what we could and can’t do with our practice management system.

Getting users to adapt to new processes.

31

Process overview:

Set KPI-based goals

Build a solid team

Use reliable, consistent metrics

Set your schedule – weekly/monthly/quarterly

Drive root cause analysis – what went wrong?

Determine your follow up actions

Record your victories and failures

Stick to it – process improvement is a journey, not a destination.

32

Metrics Subscription Options

Client Metrics Client Metrics PlusClient Metrics

PremiumPerformance

Manager

Allows for tracking performance over time, identifying

problem areas, and peer to peer

benchmarking capability

Leverages GE Healthcare expertise to help implement

sustainable processes and

improved workflows, resulting in optimized

departmental productivity.

Provides monthly reporting, with

enhanced metric suite and

breakdowns, providing greater

insight into performance

opportunities.

Helps your organization better understand how to

analyze metrics and track performance.

• Quarterly report on key financial metrics at enterprise level

• Some benchmarking

• Access to Client Metrics Plus

• Partnership with GE Healthcare consultants, who will complete all analysis and provide

1) targeted action plans to implement change,

2) regular monitoring, 3)monthly reviews,4)KPI focused workouts,5)active configuration, as

necessary

• Monthly reporting on key financial metrics with drill through capability

• Enhanced breakdown capabilities and benchmarking

• Access to enhanced metric suite

• Access to Client Metrics Plus

• Partnership with GE Healthcare consultants to

1)understand how to leverage the value of Client Metrics,

2) identify improvement areas, and

3)develop targeted action plans to implement change Part of existing support

agreement Monthly subscription

2-year termMonthly subscription

OngoingMonthly subscription

2-year term

33

Questions