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How University Hospital Reduced Revenue Leakage:

Keys to Optimizing Pricing & Charge Capture

Brian PattersonChargemaster Coordinator

University HospitalAugusta, GA

Laura GilmourSenior Territory Sales Manager

Craneware, Inc.Atlanta, GA

NOTICE: This document contains confidential or proprietary information which may be legally privileged. It is intended only for the named recipients, & may not be shared with vendors outside of Craneware. p.2

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ObjectivesOutline strategies & factors for modern revenue management processes

Realize keys to establish collaboration between clinical, HIM & financial teams for consistent, accurate charge capture across departments

Identify revenue leakage gaps in revenue management processes & documentation

Define systematic revenue improvement processes & prioritize focus areas for sustained revenue management

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Augusta, Georgia

150 miles east of Atlanta

2nd oldest & 2nd largest city (est. 1736)

Masters Golf Tournament

World’s Largest Ironman 70.3 triathlon

Godfather of Soul

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Augusta, Georgia

195k+ residents in the city

500k+ residents in metro area

116th largest city in the US

University Health Care System

NOTICE: This document contains confidential or proprietary information which may be legally privileged. It is intended only for the named recipients, & may not be shared with vendors outside of Craneware. p.5

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University Hospital - Augusta

University Hospital - McDuffie

University Home Health

University Extended Care

Brandon Wilde Retirement Community

University Health Link PHO

Community clinics & satellite campuses

Surgery & Imaging centers

University Health Care System

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University Health Care System is anchored on its main campus by 581-bed acute care University Hospital.

University Hospital

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Facts581 bed not-for-profit50 bed ED with 76,000+ annual visits36 OB suites with 3,000+ births annuallyServe a 25-county region in GA & SC

ProgramsCardiac & Vascular CenterOncology ServicesBreast Health CenterWomen’s CenterSatellite Medical Centers

University Hospital

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The Finance Headache

Denials

Lower Reimbursement Rates

RACS

Incorrect CPT/ICD-9

Bill Errors

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Potential for significant revenue leakage exists in complex & manual processes

Modern Revenue Management: Transparency Importance

to Prevent Revenue Leakage

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Identify disconnects causing missed charges & denials

Address disconnects by improving processes, documentation & ongoing education

Modern Revenue Management: Transparency Importance

to Prevent Revenue Leakage

NOTICE: This document contains confidential or proprietary information which may be legally privileged. It is intended only for the named recipients, & may not be shared with vendors outside of Craneware. p.11

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Modern Revenue Management: Pick the right person to lead revenue integrity

Clinical background

Finance background

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Establishing Collaboration & Workflow

Shared workflow facilitates communication & accountability

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Establishing Collaboration & Training

Process review – determine ownership of key functions

Validate preliminary reports with root cause analysis

Recommend ongoing process improvements

NOTICE: This document contains confidential or proprietary information which may be legally privileged. It is intended only for the named recipients, & may not be shared with vendors outside of Craneware. p.14

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Clinical accountabilityPreparation

• Set expectations early & reinforce • Tools

HuddleProcess to report variance

In-person meetings

CFO & clinical leadership at meeting

Collaboration & Training

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Clinical departmentsSubject matter experts with current information

Charge or Revenue Champion

Documentation

Access to software

Aware of changes - services & physicians

Daily reconciliation

Collaboration

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Collaboration

Clinical teams need to feel ownershipCharging is the most successful when you have a partnership between clinical & billing applications

Chargemaster Management:Increases productivity

Ensures compliance

Enhances revenue

Reduces errors

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Collaboration & Charge Design – CDM Matrix

Lessons learnedMultiple applications + multiple service lines

Clear ownership = “go-to” person

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Lessons learnedProvider participation

Collaboration & Training

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Lack of synch & integration between info systems

Inefficient operations causing increased labor

Missed charges

Lack of data transparency & believable data

No defensible pricing strategy (reflection of cost, market share & sustainability)

Mismatched units of measure purchased/dispensed

Inaccurate CPT/HCPCS codes, modifiers, & revenue codes in the chargemaster

Physician preference & device vendor pricing

Common Causes of Revenue Leakage

NOTICE: This document contains confidential or proprietary information which may be legally privileged. It is intended only for the named recipients, & may not be shared with vendors outside of Craneware. p.20

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CDM Management / Clean-up

Why do it?Optimal & compliant reimbursement

Mitigate risks as RACs escalate

Preparation for projects & partnerships

Medical Necessity

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CDM Management / Clean-upWhy use tools?

Automate review of each chargemaster line-item, flag potential problems & organize by priority

Receive routine delivery of Web-based updates – regulatory rules & coding logic for your CDM

Strengthen accountability for the organization with updates & audit trails

Maintain a sustainable business process beyond an individual’s best efforts & experience

NOTICE: This document contains confidential or proprietary information which may be legally privileged. It is intended only for the named recipients, & may not be shared with vendors outside of Craneware. p.22

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CDM Management / Clean-upWhy use tools? (cont’d)

Demonstrate a defensible system for compliance education across entire charge capture team

Assign coding modifiers & benchmark prices against payer’s fee schedules & competitors

Reconcile pharmacy & supplies purchases with billing

CDM changes can be immediately implemented

Increases productivity

Speeds up maintenance

Immediate optimization

Direct communication with the department head

New charges easily established

NOTICE: This document contains confidential or proprietary information which may be legally privileged. It is intended only for the named recipients, & may not be shared with vendors outside of Craneware. p.23

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CDM Management / Clean-up Automated CDM maintenance is vital for success

Before automation, CDM was maintained using MS ExcelEach line-item had to be reviewed individually to ensure accuracy

CPT, HCPCS, & revenue codes had to be compared to the corresponding manual

Year-end updates were labor intensive

Addendum B had to be downloaded & compared to the MS Excel CDM

CDM maintenance always took longer than expected & sometimes took a back seat to other issues

Lack of maintenance increases compliance risks

CDM optimization never happened due to resource limitations

Lack of optimization resulted in loss of payments

NOTICE: This document contains confidential or proprietary information which may be legally privileged. It is intended only for the named recipients, & may not be shared with vendors outside of Craneware. p.24

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CDM Management / Clean-up

Full pull of Current CDMMapping of charges based on departmentsDollar value of charges based on APC rates

Lessons learnedReview with department managers

Tricky scenarios

Pre-consolidation clean-up

NOTICE: This document contains confidential or proprietary information which may be legally privileged. It is intended only for the named recipients, & may not be shared with vendors outside of Craneware. p.25

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$ Results:Automated chargemaster solution quickly optimized CDMCompliance risks reduced by immediate identificationRevenue increased & payments enhanced

$1.5 million in additional net payments were identified in 2006

55 radiology charges were identified as being priced below the 2006 Medicare APC.

CDM Management / Clean-up

NOTICE: This document contains confidential or proprietary information which may be legally privileged. It is intended only for the named recipients, & may not be shared with vendors outside of Craneware. p.26

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CDM Management / Clean-up

Is the CDM clean?Few or no items with zero volume

Descriptions match AMA short description

All CPT/HCPCS are current

Rev codes are appropriate for CPT/HCPCS &/or location of service

Multipliers are correct

No/minimal line items with modifier -59 hard-coded

NOTICE: This document contains confidential or proprietary information which may be legally privileged. It is intended only for the named recipients, & may not be shared with vendors outside of Craneware. p.27

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Pricing Optimization

Value PropositionEnsure market competitiveness

Verify pricing policy compliance

Ongoing review of pricingRoutine pricing review is integral to strategic pricing initiatives

Quickly identify when cost exceeds charge

Compare charges to defined pricing algorithms

NOTICE: This document contains confidential or proprietary information which may be legally privileged. It is intended only for the named recipients, & may not be shared with vendors outside of Craneware. p.28

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Pricing OptimizationStart identifying:

All charges below fee schedule

All charges not within benchmark range for overall CDM & five selected department

Inconsistent pricing of same service in the CDM

Review when pricing is:Significantly below policy price

Below policy price

Above policy price

Significantly above policy price

NOTICE: This document contains confidential or proprietary information which may be legally privileged. It is intended only for the named recipients, & may not be shared with vendors outside of Craneware. p.29

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CodingAccurate HCPCS code assignment vital to reimbursement

Codable analysis• Assess if correct HCPCS codes are assigned to currently coded items• Assess which items lack a required HCPCS code

Revenue Cycle data analysisBi-weekly graph package review

Managed Care Organizations’ negotiations

Continually ensure accurate & maximized reimbursement

Ensure CMS compliance

Proactive Internal Assessments

NOTICE: This document contains confidential or proprietary information which may be legally privileged. It is intended only for the named recipients, & may not be shared with vendors outside of Craneware. p.30

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Creating a Revenue Integrity Program

Monthly• Data analysis

o Coding issueso Pricing issueso Volume reconciliation issues

• Department process reviewo Understanding procurement to delivery to charge process

• Root cause analysis of issues discovered through data analysiso Assignment of ownership of issues o Action plan for resolution with frequent check ins

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Compliance - Avoid RACMedical Necessity

LCD’s & NCD’s

CMS EditsCPT Code Updates/Flags

Catch compliance updates

Stay on top of AR & Billing

NOTICE: This document contains confidential or proprietary information which may be legally privileged. It is intended only for the named recipients, & may not be shared with vendors outside of Craneware. p.32

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Summary

Define processes for systematic revenue improvement & prioritize focus areas for ongoing revenue management

Identify revenue leakage gaps in financial management processes

Implement controls & technology into revenue management processes

Improving Financial Performance in Revenue Cycle

NOTICE: This document contains confidential or proprietary information which may be legally privileged. It is intended only for the named recipients, & may not be shared with vendors outside of Craneware. p.33

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The Revenue Integrity Survival Guide

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Questions & Answers