Are You Ready For Revenue Cycle 2.0?

Presentation Summary & Tools

Presented by:Daniel J. Marino

The Healthcare Reality of Today

• Healthcare costs continue to rise placing pressures on patients, employers and healthcare providers

• Movement from volume-based reimbursement to value-based contacts

– Fee-for-services plus shared savings

– Shared savings with PMPM care management fee

– Risk-based contracts• The importance of data continues to rise– Process-driven outcomes– Performance and care results

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Shift in Revenue Cycle Activities

Based on fee-for-service encountersEncounter-based contract management Based on fee schedule Accounts receivable indicators

Based on clinical performancePerformance-based contract management Bundled payments“New” business metricsConsumer driven healthcare

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Present Future

New Generation of KPIs

• New Generation of financial metrics include:- Tracking “Cost of Care”- Clinical performance- Patient satisfaction/engagement- Beneficiary/program management- Bundled payment indicators

• PM systems tracking by value –based contract- Bundled service- Shared savings- Partial or full risk

• A/R management reflecting performance incentive opportunity

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Physician Key Performance Indicators

Key Performance

Indicators

Revenue Cycle

Payment Analysis

Cost / Profitability

ProductionCare and Outcomes

Patient Access

Patient Satisfaction

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Focused Analytics Help Identify Where to Begin

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Build the total cost of care model on per member, per month bases

Indicators should include: • Allowed versus paid amount• Employee, spouse, child• With and without high cost

claims

Stratify Data based PMPM, Cohorts

Top 10 Diagnoses by Total Cost

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* Diagnoses appeared in the primary, secondary or tertiary codes

Diagnosis Code Description

Allowed Amount

Paid Amount Patients Encounters

Paid per Encounter

Paid per Patient

401.9 Unspecified essential hypertension $1,537,106 $1,434,185 911 5,286 $271 $1,574

585.6End stage renal disease $1,126,685

$1,089,893 9 1,496 $729 $121,099V58.11 Encounter for antineoplastic $746,231 $716,961 28 1,552 $462 $25,606174.9 Malignant neoplasm of breast $758,427 $715,286 72 1,667 $429 $9,935

205.02 Acute myeloid leukemia, in relapse $682,459 $674,449 2 30 $22,482 $337,224

V42.7Liver replaced by transplant $651,863

$634,463 8 309 $2,053 $79,308

V58.0Encounter for radiotherapy $593,219

$593,219 18 766 $774 $32,957280.9 Iron deficiency anemia, unspecified $590,289 $565,894 75 1,198 $472 $7,545

824.8Unspecified fracture of ankle, closed $576,856

$562,333 20 94 $5,982 $28,117

823.82Closed fracture of unspecified part of fibula with tibia

$571,902$560,723 3 58 $9,668 $186,908

Evaluating the High Cost Services Support Bundled Service Tracking

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*Disease categories based off of grouped diagnoses corresponding to condition.

• On a per encounter basis, colorectal cancer is the most expensive cancer type assessed, whereas breast cancer had the highest encounter rate

Cancer TypeAllowed Amount Paid Amount Encounters

Lung $193,509 $179,059 512Colorectal $377,167 $333,967 850Breast $844,232 $797,865 1946

*Figures provided are in Paid Amounts.

Collected vs. Collectable

• Similar to net collection rate, but allows for more accurate review

— Collected: Payment received and line item posted (includes co-pay and

deductible)— Collectable:

The allowable amount as negotiated in contract (includes co-pay and deductible)

• Great metric to evaluate overall revenue cycle performance• Forces you to ask specific questions and drill down to find

answers• Dependent on knowing contract fee schedule• Allows for better contract negotiations

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Collected vs. Collectable

90 Day CvC: Goal 92-94% Payments received in the next 3 months

Allowable posted 4 months ago

180 Day CvC: Goal 95-97% Payments received in the next 6 months

Allowable posted 7 months ago

Annual CvC: Goal 97-99% Payments received in the next 12 months

Allowable posted 13 months ago

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Sample 90 Day CvC Report

JANUARY, 2014INSURANCE PLAN CHARGES ALLOWABLE COLLECTED

(Coll./Allow.) % COLLECTED

AETNA $1,639,044 $1,062,610 $1,043,451 98.20%

AMERIHEALTH $185,361 $145,090 $140,925 97.13%

USHC $1,986,460 $1,267,667 $1,210,398 95.48%

UNITED HEALTH $1,653,396 $1,283,729 $1,219,456 94.99%

MEDICARE $4,532,591 $1,799,580 $1,679,789 93.34%

CIGNA $1,146,525 $911,439 $847,316 92.96%

OXFORD $1,318,334 $1,053,521 $960,497 91.17%

HEALTHNET $579,508 $477,573 $418,675 87.67%

HORIZON $258,003 $258,003 $195,264 75.68%

SELF $272,173 $272,173 $188,777 69.36%

TOTAL $13,571,395 $8,531,385 $7,904,548 92.65%

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End Uses of Clinical Information to Support Revenue Cycle Performance

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• Chronic disease registries• Care gap management• Patient satisfaction

• Quality scorecards• Patient chart view through

continuum of care• Use of referrals and

ancillaries

• Total cost of care reports• Payer analytics• Areas of improvement• Domestic Utilization Mgmt

Program Management

Physician Performance

Financial Effectiveness

Health Directions, LLCTwo Mid America Plaza, Suite 1050Oakbrook Terrace, IL 60181Phone: 312-396-5400dmarino@healthdirections.comwww.healthdirections.com

Daniel J. MarinoPresident/CEOdmarino@healthdirections.com

@HDirections

Contact

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