How to Transform and Optimize a Large Scale
Revenue Cycle Operation
March 1, 2016
Michael G. Souza, President & CEO, New England Life Care
William E. O’Brien, Senior Revenue Cycle Consultant, Culbert Healthcare Solutions
Conflict of Interest
Michael G. Souza
Has no real or apparent conflicts of interest to report
William E. O’Brien
Has a conflict of interest as Culbert Healthcare Solutions was contracted with New
England Life Care to conduct the Revenue Cycle assessment. He has a commercial
interest in the success of this transformation
Agenda
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Introductions
Learning Objectives
Who is New England Life Care?
New England Life Care Project Scope and Objectives
Implementation Accomplishments to Date
Findings and Recommendations
Implementation Elements
Keys for Success
Questions
Learning Objectives
• Recognize the steps necessary to ensure that financial improvement is
optimized during this large scale revenue cycle process improvement
initiative
• Prepare to manage change and transform financial operations within their
organizations, focusing on overall revenue cycle workflows
• Respond effectively to revenue cycle issues using a step-by-step
methodology
Health IT Value Steps
This Presentation will demonstrate the various stages of STEPS in the following manner
•S
Satisfaction – Leadership and staff adoption of revenue cycle
process improvements has enhanced New England Life Care’s
financial situation
•T
Treatment – Ability to effectively manage revenue cycle
processes
•E
Electronic Information/Data – Revenue cycle model that is
built on an advanced technological infrastructure that supports
connectivity, data aggregation, data analytics and robust reporting
•P
Patient Engagement/Population Management – Patient
engagement strategies are a primary focus in the New England Life
Care revenue cycle model for success
•S
Savings – Standardization of practices
New England Life Care at a glance
•
•
•
•
•
Founded in 1987 by Dartmouth Hitchcock & Maine Medical Center
Not-for-Profit, 501(e) Cooperative
Owned by our Member Hospitals
“Preferred Provider” to 36 Members representing 10,000 beds
NELC has:
– 2,000 patients currently on census
– 6,000 new patient starts in 2015
– 730,000 patient days of service
– 94.5% patient satisfaction score
– 210 NELC team members
– 6 locations - 3 specialty pharmacies, regional office, 2 satellite nursing
offices/distribution centers
– Accredited by the Joint Commission
New England Life Care Facts
 New England Life Care has led the way in New England since 1987
 Comprehensive home infusion therapy
 Home infusion nursing
 Specialty pharmacy services
 Founded to provide a highly specialized service with superior service and
extraordinary clinical results, we share our member hospitals’ commitment
to clinical excellence, quality and ethics
 To better reflect our mission and serve our communities, we changed our
corporate structure to a not-for-profit hospital services cooperative in
1993. This spurred a period of rapid growth, expanding our hospital
membership to 39, including many of New England’s most prestigious
teaching hospitals

NELC has doubled in size over the last four years
New England Life Care Facts
 New England Life Care brings considerable expertise and experience to
the delivery of efficient and effective therapeutic infusion services
 The staff at New England Life Care provides comprehensive clinical
management for adult and pediatric home infusion therapies
 Nutritional
 Anti-infective
 Chemotherapy
 Pain management
 Other therapies
 New England Life Care maintains branch pharmacies in
 Massachusetts
 Maine
 New Hampshire
 With its multi-state staffing network
 Therapy can often be initiated within hours of notification.
 Ability to care for patients throughout the service area assures
 Safe initiation of therapy
 Avoids costly readmissions
 Promotes positive outcomes, while controlling costs
NELC Geographical Coverage - 2015
A Hospital Without Walls
2013 New Starts
New England Life Care
Project Scope, Objectives and
Methodologies
• Provide Performance Indicators/ Goal Setting
• Review of Operational IT Capabilities
• Observation of key Revenue Cycle and Patient Access workflows and processes
• Metric reviews
• Interview of key Revenue Cycle staff
• Document reviews
• Review Revenue Cycle reports
• Review Financial reports
• Focused on critical financial activities vital to the performance of processing patient
accounts timely and accurately
3
Implementation Milestones To Date
• AR Aging Tracking Report
– Total 90+ % AR
• In seven weeks, Reduced from 37% to 25% as of April 18. 90+ AR
balance has decreased from $2.2M to $1.4M. The Best Practice goal
of 20-25% has been reached
– Medicaid aging
• Reduced 90+ aging from 45% to 33%. Almost within reach of the
Best Practice goal of 30%
– Cash Posting
• Has exceeded monthly goal for March and April. >90 day cash
posting is continuing to increase. This is due to the improved follow
up processes initiated and monitored
As of Thursday, January 14, 2016
Implementation Milestones To Date
• AR Aging Tracking Report
– Auditor & Collector Backlog
• Auditor backlog has decreased from a high of 32 business days to
10 business days. Exceeding the Best Practice goal of 15 business
days
• Collector backlog has decreased from 16 business days to 6
business days. Close to the Best Practice of 5 business days
– Insurance Verification and Authorization TO DO tracking
• Insurance Verification TO DO list has been reduced from 432 to 32
The team is now current
• Authorizations TO DO list has reduced from a high of 798 in January
to 85. The team is now current
– individual production is being tracked in many areas
As of Friday, December 4, 2015
Implementation Milestones To Date
• Biller Tracking
– Individual biller productivity is now being tracked weekly. Many are
reaching the Best Practice goal of 50 claims a day.
• Unbilled AR
– Unbilled AR is being tracked weekly by the top 5 payers. Ready To Bill
reasons why claims cannot be billed are being monitored weekly. Also,
tracking Ready Too Bill by Therapy
• 30 Day Look Back Revenue Predictor Model report
– Run weekly. Showing some inconsistency in daily billing
• Claim Processing Days
– Weekly count showing the number of days from last date of service that
bills are being produced.
– 73 – 80% claims in the 0 – 30 days’ timeframe for the three weeks since
we began monitoring. Best Practice is >70%
As of Friday, December 4, 2015
Governance
Senior Leadership
– Meets weekly for 1 hour
– Membership
• CEO
• CFO
• Director of Revenue Cycle
• Vice President of Regional Administration and Finance
– Discussion includes program updates and enterprise decisions related to
standardizing process
Champions Team
– Meets every Monday for 2 hours
– Membership includes operational ,service line, and Information Technology
leadership
– Discussion includes updates from each operational area and issue
escalation
3
Before…
Claims Processed to New Revenue
Claims Processed
New Revenue Added
Expon. (New Revenue Added )
4,300,000
4,100,000
3,900,000
3,700,000
3,500,000
3,300,000
3,100,000
2,900,000
2,700,000
2,500,000
2,300,000
1/14 2/14 3/14 4/14 5/14 6/14 7/14 8/14 9/14 10/1411/1412/14 1 /
15
2/
15
3/
15
4/
15
5/
15
After….
Claims Processed to New Revenue
Claims Processed
New Revenue Added
Expon. (New Revenue Added )
4,700,000
4,500,000
4,300,000
4,100,000
3,900,000
3,700,000
3,500,000
3,300,000
3,100,000
2,900,000
2,700,000
2,500,000
12 / 15
11 / 15
10 / 15
9 / 15
8 / 15
7 / 15
6 / 15
5 / 15
4 / 15
3 / 15
2 / 15
1 / 15
12/14
11/14
10/14
9/14
8/14
7/14
6/14
5/14
4/14
3/14
2/14
1/14
2,300,000
DSO Before…
Unbilled DSO
120
100
80
60
40
20
0
Unfinished DSO
Billed DSO
Total DSO
1/14
2/14
3/14
4/14
5/14
6/14
7/14
8/14
9/14
10/14
11/14
12/14
1 / 15
2 / 15
3 / 15
4 / 15
5 / 15
6 / 15
7 / 15
8 / 15
9 / 15
10 / 15
11 / 15
12 / 15
DSO After….
Unbilled DSO
Unfinished DSO
Billed DSO
Total DSO
120
100
80
60
40
20
0
Bad Debt Before….
Bad Debt
8.00%
7.00%
6.00%
5.00%
4.00%
3.00%
2.00%
1.00%
0.00%
Target
1/14
2/14
3/14
4/14
5/14
6/14
7/14
8/14
9/14
10/14
11/14
12/14
1 / 15
2 / 15
3 / 15
4 / 15
5 / 15
6 / 15
7 / 15
8 / 15
9 / 15
10 / 15
11 / 15
12 / 15
Bad Debt After….
Bad Debt
Target
8.00%
7.00%
6.00%
5.00%
4.00%
3.00%
2.00%
1.00%
0.00%
Accounts Receivable Before…
A/R Trend
A/R Trend
7,000,000
6,500,000
6,000,000
5,500,000
5,000,000
4,500,000
4,000,000
5 / 15
4 / 15
3 / 15
2 / 15
1 / 15
12/14
11/14
10/14
9/14
8/14
7/14
6/14
5/14
4/14
3/14
2/14
1/14
3,500,000
Accounts Receivable After….
A/R Trend
A/R Trend
7,000,000
6,500,000
6,000,000
5,500,000
5,000,000
4,500,000
4,000,000
3,500,000
1/14 3/14 5/14 7/14 9/14 11/14 1 /
15
3/
15
5/
15
7/
15
9/
15
11 /
15
Net Revenue to Accounts Receivable
Comparison Before….
Net Revenue
A/R Trend
7,000,000
6,000,000
5,000,000
4,000,000
3,000,000
2,000,000
1,000,000
5 / 15
4 / 15
3 / 15
2 / 15
1 / 15
12/14
11/14
10/14
9/14
8/14
7/14
6/14
5/14
4/14
3/14
2/14
1/14
0
Net Revenue to Accounts Receivable
Comparison After….
Net Revenue
A/R Trend
7,000,000
6,000,000
5,000,000
4,000,000
3,000,000
2,000,000
1,000,000
0
1/14 3/14 5/14 7/14 9/14 11/14 1 /
15
3/
15
5/
15
7/
15
9/
15
11 /
15
Cash Collection Ratio Before….
Cash Collection Ratio
105.00%
100.00%
95.00%
90.00%
85.00%
80.00%
75.00%
70.00%
1/14
2/14
3/14
4/14
5/14
6/14
7/14
8/14
9/14
10/14
11/14
12/14
1 / 15
2 / 15
3 / 15
4 / 15
5 / 15
6 / 15
7 / 15
8 / 15
9 / 15
10 / 15
11 / 15
12 / 15
Cash Collection Ratio After.…
Cash Collection Ratio
105.00%
100.00%
95.00%
90.00%
85.00%
80.00%
75.00%
70.00%
Cash Collection Before….
Cash Collection
Target
3,800,000
3,600,000
3,400,000
3,200,000
3,000,000
2,800,000
2,600,000
2,400,000
2,200,000
5 / 15
4 / 15
3 / 15
2 / 15
1 / 15
12/14
11/14
10/14
9/14
8/14
7/14
6/14
5/14
4/14
3/14
2/14
1/14
2,000,000
Cash Collection After….
Cash Collection
Target
4,200,000
4,000,000
3,800,000
3,600,000
3,400,000
3,200,000
3,000,000
2,800,000
2,600,000
2,400,000
2,200,000
2,000,000
1/14 3/14 5/14 7/14 9/14 11/14 1 /
15
3/
15
5/
15
7/
15
9/
15
11 /
15
Billed Comparison to A/R Before….
Billed
A/R Trend
7,800,000
6,800,000
5,800,000
4,800,000
3,800,000
2,800,000
5 / 15
4 / 15
3 / 15
2 / 15
1 / 15
12/14
11/14
10/14
9/14
8/14
7/14
6/14
5/14
4/14
3/14
2/14
1/14
1,800,000
Billed Comparison to A/R After….
Billed
A/R Trend
7,800,000
6,800,000
5,800,000
4,800,000
3,800,000
2,800,000
1,800,000
1/14 3/14 5/14 7/14 9/14 11/14 1 /
15
3/
15
5/
15
7/
15
9/
15
11 /
15
Initial Assessment Findings/Recommendations
• The current denial management system and process is a very manual,
labor intense process. A review of the first quarter 2014 claims resulted
in approximately $3.9M claim denials
• Conduct a thorough denials assessment in order to accurately target and
remediate loss of significant revenue due to denials
• Track and regularly report denials, recoveries and fatal write-offs by
reason, by individual payer and by dollar amount to monitor effectiveness
of process
• Unbilled revenue is approximately $3.2M and Un-Finished revenue is
approximately $.25M, this represents 38% of total accounts receivable of
$9.2M
• Develop a comprehensive plan that will focus on the Unbilled and
unfinished revenue due
• Create effective TO DO work lists that identify accounts requiring follow
up based on age and payer
• Track and regularly report open AR by individual payer, dollar amount,
staff and account type to monitor effectiveness of processes and staff
productivity
General Findings/Recommendations
• There is a lack of effective communication between Revenue Cycle, the
branches and other areas within New England Life Care, while following
up or researching patient information
• Develop a comprehensive communication plan for communication
between NELC Revenue Cycle and the Branches to include weekly or biweekly meetings along with written updates
• Follow up needs to be focused to address issues with Accounts
Receivable aging
• A comprehensive plan needs to be developed for the accounts aged >
90 days which represents approximately $2.1M (37%)
• Reports for monitoring productivity is nonexistent, which results in no
accountability or sense of urgency among staff
• Revise and implement new key policies and procedures for the Revenue
Cycle to include productivity standards
• Agreement on benchmarks and sanctions for non-adherence
General Findings/Recommendations
• The current Revenue Cycle technologies (CPR+) utilized by NELC
creates inherent efficiencies, resulting in an extended claim adjudication
cycle and potential lost revenue
• Conduct a work flow process mapping exercise with a CPR+ expert to
identify prioritized areas where CPR+ system and Pulse can be improved.
• Identify areas of accountability and gaps
• Develop an effective Service Level Agreement (SLA) with IT in order to
create agreed upon expectations for responses to support issues
• There is a lack of effective training among all areas of the Revenue Cycle
that results in a non-standard orientation and training process
• Implement ongoing training and orientation program with appropriate
documentation and manuals for staff to keep current on insurance carrier
requirements, such as precertification, prior authorization, billing or other
changes
Findings by Revenue Cycle Area
• Information Technology
Feature
Used or Under-Utilized
Electronic Billing
Under-Utilized
Electronic Corrected Claim
Not used
Notes Manager
Under-Utilized
Batch Functions

Write-offs

Assign Status

Resubmit
Payer set up & options
Not used
Lot Tracking
Not used
Under-Utilized
ROI
Increase efficiency of staff
Decrease work arounds
Decrease hand offs
Increase efficiency of staff
Decrease work arounds
Decrease hand offs
Metric tracking
Increase efficiency of staff
Decrease work arounds
Decrease hand offs
Increase efficiency of billing staff
Decrease work arounds
Decrease hand offs
Findings by Revenue Cycle Area
• Information Technology (Continued)
Feature
Used or Under-Utilized
Authorization Tracking
Not used
SMN/CMN Tracking
Under-Utilized
Billing Review Queue
Not used
Recurring Rental Manager
Under-Utilized
Electronic Billing
Under-Utilized
ROI
Increase efficiency of staff
Decrease work arounds
Decrease hand offs
Increase efficiency of staff
Increase efficiency of staff
Decrease work arounds
Decrease hand offs
Automatic review and billing for rental
equipment
Increase efficiency of staff
Increase efficiency of staff
Decrease work arounds
Decrease hand offs
General Findings/Recommendations
Recommendation
Dependencies
ROI
$
ROI
$
Consider making change to the cash
posting process. Separate the
denied claims (D) from the
secondary billing claims (S) . The
EOB’s should be sorted high to low
by amount. The auditor should focus
his/her review of the higher dollar
claims first
Develop a comprehensive
communication plan for
communication between NELC
Revenue Cycle and the Branches to
include weekly or bi-weekly
meetings along with written updates
Review the process , revise the
policy and provide education to staff
regarding the Acknowledgement of
Financial Responsibility (AFR)
process
Timing of Key Bank
implementation of the
EOB scanning
function of Key Bank
Improved overall revenue
stream and cash position
Reduced denials
Reduce hand offs and
duplication
Buy-in from NELC
leadership
Improve staff engagement
Improve communication
Decreased staff frustration
$
Availability of a
process owner
Eliminates duplicative and
unnecessary work steps
Decreased staff frustration
$
General Findings/Recommendations
Recommendation
Dependencies
ROI
Implement ongoing training and
orientation program with appropriate
documentation and manuals for staff
to keep current on insurance carrier
requirements, such as
precertification, prior authorization,
billing or other changes
Availability of process
owner
Reduce denials
Improve staff engagement
Improve communication
Reduce potential for
inconsistent workplace
practices
Improve staff efficiency
Revise and implement new key
policies and procedures for the
Revenue Cycle to include
productivity standards
Agreement on
benchmarks and
sanctions for nonadherence
Review the process and revise the
current policy and provide education
to staff for processing of the
Advanced Beneficiary Notice (ABN)
process and Free Care processes
Comprehensive
Denials Management
Analysis
Improve staff efficiency
Improve staff morale
Reduce potential for
inconsistent workplace
practices
Reduce non-billable charges
decrease denials
Increase cash collections
$
ROI
$
$
$
General Findings/Recommendations
Recommendation
Dependencies
ROI
$
ROI
$
Review the current Part D process
with all appropriate departments and
simplify as much as possible, i.e.,
create a cheat sheet
Availability of process
owner
Reduce potential for
inconsistent workplace
practices
Improve staff efficiency
Decreased staff frustration
Develop a plan to improve the labor
intense process for attaching
invoices to Mass Health claims
Availability of
Materials Dept., IT
staff and others to
assist
Reduce potential for
inconsistent workplace
practices
Improve staff efficiency
$
Update and standardize job
descriptions that are consistent
among positions that clearly align
with relevant and position-specific
performance metrics
Availability of a
process owner
Improve staff efficiency
Improve staff morale
Reduce potential for
inconsistent workplace
practices
Reduced denials
Reduce hand offs and
duplication
Improve overall revenue stream
and cash position
$
Moderate Cost/Low Time to Implement
Recommendation
Conduct a thorough denials assessment in
order to accurately target and remediate loss
of significant revenue due to denials:
Form Denial Committee
Implement Denial Tracking software to
assist with accurate and timely denial
identification
Dedicate staff to work denials, appeals and
underpayments to focus specifically on these
select accounts
Develop specific transaction codes to
facilitate root-cause analysis and improve
accountability
Create new policies and procedures to track
and resolve denials
Implement and monitor process
Track and regularly report denials,
recoveries and fatal write-offs by reason, by
individual payer and by dollar amount to
monitor effectiveness of process
Train staff on standardized collection
processes
Dependencies
System capacity to
support ANSI codes
and standardization
of processes
Process owner
ROI
Decrease denials
Improve overall revenue
position
Reduce hand offs and
duplication
Improve overall revenue
stream and cash
position
Decrease bad debt
$
ROI
$$
Moderate Cost/Low Time to Implement
Recommendation
Dependencies
ROI
Implement and monitor registration and
invoice entry process and review all policies
and procedures to ensure that all data
elements required to bill are captured and are
submitted timely. Include policy guidelines
that address missing, inaccurate or
incomplete data elements
System capacity and
standardization
of processes
Research all NELC payers to determine the
level of online access that is available for
authorization, verification, benefits and billing.
Possible implementation of Bolt-On
technology with Emdeon, Avality or Navinet
Create Director of Revenue Cycle position to
oversee Revenue Cycle operations and
revise the organization/reporting structure.
Fill the vacant Billing/Collections Manager
position
Use of IT resources
or outside resources
Improved charge
capture
Reduced denials
Reduce hand offs and
duplicative work
Improve overall revenue
stream and cash
position
Eliminates duplicative
and unnecessary work
steps
Increase staff efficiency
Buy-in from NELC
leadership
Reduce denials
Improve staff
engagement
Improve communication
Reduce potential for
inconsistent workplace
practices
Improve staff efficiency
$
ROI
$$
Moderate Cost/Moderate Time to Implement
Recommendation
Dependencies
ROI
Conduct a work flow process mapping
exercise with a CPR+ expert to identify
prioritized areas where CPR+ system and
Pulse can be improved. Identify areas of
accountability and gaps
Availability of CPR+
expert
Ensures system
optimization
Eliminates duplicative
and unnecessary work
steps
Quantifies gap areas
requiring remediation
and improvement
Implement and monitor policy regarding bill
production completed less than 5 days after
bill is Ready To Bill.
Specify exceptions and protocols
Implement technology enabler system, if
necessary
Review current system processes
Track and review errors daily and report to
Director
Create and maintain daily management
reports
Agreement on
accountability,
exceptions and
protocols
Improved claim
information resulting in
fewer denials
Clear delineation of
roles and accountability
Decreased staff
frustration
Improve overall revenue
stream and cash
position
$
ROI
$$
$$
Moderate Cost/Moderate Time to Implement
Recommendation
Develop a comprehensive plan to tackle the
Unbilled and unfinished revenue due to the
more than unresolved 5,000 tickets
Create effective TO DO work lists that
identify accounts requiring follow up based on
age and payer
Track and regularly report open AR by
individual payer, dollar amount, staff and
account type to monitor effectiveness of
processes and staff productivity
Review all under-utilized capabilities within
CPR+ for A/R follow-up
Document and flow chart best practices for
insurance follow up
Create new policies and procedures to
identify proper follow up procedures
Train staff on standardized best practice
follow up routines and use of enabling
technology
Monitor employee productivity
Dependencies
ROI
Availability and buy-in Improve staff efficiency
of Revenue Cycle
Improve staff morale
Management Team
Reduce potential for
inconsistent workplace
practices
Reduce bad debt
$
ROI
$$
Moderate Cost/Moderate Time to Implement
Recommendation
Dependencies
Combine Intake Specialists from branch
office with Insurance Verification team at
the corporate office
Attrition
Buy-in from NELC
leadership
Set clear accountability expectation and
provide mandatory leadership development
training for managers and supervisors/Leads
to coincide with implementation of KPIs
Process owner with
skill set to implement
and enforce
accountability and
provide meaningful
Leadership
development
ROI
Improve staff efficiency
Improve staff morale
Reduce potential for
inconsistent workplace
practices
Improved morale and
performance from
managers and
supervisors/Leads
Overall improvement in
department operations
Improved financial
position
$
ROI
$$
$$
Keys for Success/Next Steps
• Approve Recommendations
• Assign dedicated Project Manager to coordinate process improvements
• Develop an overall integrated “master” project plan which incorporates
operational process improvements with technology changes
• Ensure Gaps/Needs are sequenced and timed appropriately
• Ensue dates and milestones are identified
• Clearly define functionality expectations
• Develop detailed process workflows
• Identify and allocate resources required for implementation efforts
• Begin implementation efforts
Denials
Top Denial Reasons -- First Quarter 2014
Amount
%
Previously paid
434,244
25.94%
Claim denied charges
323,983
19.35%
Duplicate claim/service
251,757
15.04%
Precertification/authorization/notification absent
Claim/service lacks information which is needed for
adjudication
147,403
8.80%
129,175
7.71%
The time limit for filing has expired
82,249
4.91%
Expenses incurred after coverage terminated
78,835
4.71%
Additional information is required to process claim
43,159
2.58%
The diagnosis is inconsistent with the patient's age
22,984
1.37%
Total Top Denials
1,674,355
38.82%
Total First Quarter 2014 Denials
3,900,000
December 2014 Billed Accounts
Receivable by Age Group
45%
41%
40%
37%
35%
30%
25%
20%
15%
13%
9%
10%
5%
0%
0 - 30
31 - 60
61 - 90
91+
December 2014 Accounts Receivable
7,000,000
6,000,000
5,802,739
5,000,000
4,000,000
3,197,043
3,000,000
2,000,000
1,000,000
239,936
0
"Billed" AR
"Un - Billed" AR
"Un - Finished" AR
Proposed Revenue Cycle Benchmarks
Health IT Value Steps
This Presentation will demonstrate the various stages of STEPS in the following manner
•S
Satisfaction – Leadership and staff adoption of revenue cycle
process improvements has enhanced New England Life Care’s
financial situation
•T
Treatment – Ability to effectively manage revenue cycle
processes
•E
Electronic Information/Data – Revenue cycle model that is
built on an advanced technological infrastructure that supports
connectivity, data aggregation, data analytics and robust reporting
•P
Patient Engagement/Population Management – Patient
engagement strategies are a primary focus in the New England Life
Care revenue cycle model for success
•S
Savings – Standardization of practices
Summary
Michael G. Souza
President & CEO
New England Life Care
(781)932-4333
[email protected]
William E O’Brien
Senior Revenue Cycle Consultant
Culbert Healthcare Solutions
(207)251-2283
[email protected]