Cash Acceleration During Turbulent Economic Times: Is your hospital or health system struggling with reduced cash flow and reduced margins related to interest income? Challenges AR Stratification / AR Analysis Third Party Follow-up Work Flow Strategies Business Office Staffing Analysis Follow-up Productivity and Quality Standards Pre-Billing / Post-Billing Denial Management Underpayment Recovery and Strategy Planning Summary Yours very truly, Ron Camejo
With the demands inherent in managing all parts of a Revenue Cycle operation, especially in the current economic downturn, survival is the focus of many hospitals and health systems, rather than process and work flow improvement. The economic climate is accelerating the rate of uninsured and under-insured patients, and is contributing to an increase in the number of high deductible health plans. It is critical that Revenue Cycle leadership teams focus on clinical and financial integration, leveraging current technology, analyzing and redesigning work flows to improve outcomes, analyzing associated labor cost, and implementing aggressive cash acceleration processes. Accounts receivable (A/R) mitigation and cash goals will become increasingly difficult to accomplish, and the cost to collect will increase in the absence of such efforts. The negative impact on operations can last well beyond the economic downturn, if appropriate steps are not taken. We cannot discuss all the details of implementing cash acceleration processes in this forum, but we will include a list of key areas and concepts to consider when embarking on this course of action.
In addition to the existing economic conditions, many Patient Access and Patient Accounting Departments are hampered by inefficient work flows that make it impossible to focus on cash collection and quicker liquidation of the A/R. The potential failure points within the processes are numerous and very difficult to manage. This makes it easy for a patient to be treated without full financial clearance, or could allow an outstanding high-dollar third party claim to go untouched for an extended period. These and other issues combine to produce financial results that are less than optimal. In addition, interdepartmental communication within the Revenue Cycle is traditionally poor or non-existent, and there is a notable lack of formal, integrated Patient Access and Patient Accounting training.
Patient Access and Patient Accounting Departments frequently underutilize their existing technology. Underutilization of technology may prevent efficient follow up protocols, implementation of tracking staff productivity, and can impact the way denials and underpayments are identified and categorized. Revenue Cycle departments must know, or learn, the capabilities of the systems they utilize, to ensure they are getting the most from those systems.
Technology is often available in base hospital information systems to support business processes. Exploring those options or other commercial options, when financially feasible, can make the revenue cycle processes more efficient and can help facilities turn outstanding A/R into cash much more quickly. In the case of Point of Service Collections, a solution as simple as a "patient pay estimator" (created in-house utilizing Microsoft Excel for example), could provide staff with what they need to begin this type of initiative. In this example, front end staff would be given critical information needed to address patient balances prior to service rather than waiting until the insurance pays and a bill is generated.
Understanding and implementing cash acceleration strategies is a key component of Revenue Cycle operations. Continually monitor your processes to ensure wasted effort and expense is eliminated, "hand-offs" are minimized, and staff is held responsible and accountable for their work. In the following section, we have outlined steps that can be taken to position the Revenue Cycle operation for future success. It provides insight into how cash collections can be accelerated and cost-to-collect can be reduced. The outline can be used to compare specific aspects of current operations with associated industry better practices.
Cash Acceleration Strategies
While focusing on surviving the current economic crisis, Revenue Cycle leaders must keep a keen eye on designing and implementing efficient operational processes and maximizing the usage of current and new technology. The key financial metrics used to monitor the effectiveness of the current and redesigned processes include, but are not limited to, Cash on Hand, Operating Margin, Cash / Net Patient Service Revenue, Uncollectible Expense, and Cost-to-Collect. There are resources available that provide metrics surrounding industry-leading practices. If implemented and managed proactively, the cash acceleration process and work flow automation recommendations listed above will carry the operation through the current economic downturn and positively impact key financial indicators for years to come.
We are pleased to have the opportunity to present this information to you. If you have any questions or need assistance in planning and/or implementing cash acceleration processes or labor cost reduction analysis, please do not hesitate to contact either Kim Hollingsworth at 610-517-1386 or me at 484-832-9940.
For more information please visit http://www.ima-consulting.com/
Is your hospital or health system struggling with reduced cash flow and reduced margins related to interest income?
AR Stratification / AR Analysis
Third Party Follow-up Work Flow Strategies
Business Office Staffing Analysis
Follow-up Productivity and Quality Standards
Pre-Billing / Post-Billing Denial Management
Underpayment Recovery and Strategy Planning
Yours very truly,