HFMA Hawaii Chapter Conference April 10, 2015 Kern Medical Center

KERN COUNTY MEDICAL CENTER TOTAL BEDS : 222 ANNUAL ADMITS: 32,000 ANNUAL OUTPATIENT CLINIC VISITS: 140,000 ANNUAL ED VISITS: 45,000 ANNUAL OPT SURGICAL PROCEDURES: 4,0000 HOSPITAL FINANCIAL SYSTEM: MCKESSON-STAR PRACTICE MANAGEMENT SYSTEM: MCKESSON PRACTICE PLUS EMR: OPEN VISTA PAYER MIX: 75% M/CAID AND M/CAID MANAGED CARE 8% MEDICARE 12% COMMERCIAL/WORKER’S COMP./JAIL 5% SELF-PAY

KERN MEDICAL CENTER STATISTICS A/R DAYS AS OF 6/30/13 TOTAL A/R 166 DAYS- BILLED A/R 151 A/R DAYS AS OF 3/01/14 TOTAL A/R 94 DAYS- BILLED A/R 84 A/R DAYS AS OF 6/30/14 TOTAL A/R 77 DAYS- BILLED A/R 57 CASH COLLECTIONS AS OF 9/30/13 $6 MILLION CASH COLLECTIONS AS OF 9/30/14 $13 MILLION FTE’S 6/30/13 TOTAL FTE’S 30, PLUS 3 SUPERVISORS FTE’S 6/30/14 TOTAL FTE’S 12, PLUS 2 SUPERVISORS

OVERVIEW – MAJOR BARRIERS  2 Registration platforms  Star for hospital services  Practice Plus for clinic visits & pro fees  Clinic and OP diagnostic registration staff reported to clinic leadership  Hospital registration staff only responsible for ED, INPT and scheduled surgeries  Zero quality and Zero authorizations

OVERVIEW MAJOR BARRIERS Multiple scheduling systems  Surgery -open vista  Diagnostic and pre-op – star  Clinic visits- practice plus EMR is non-functional and not user friendly Diagnostic test performed during clinic visit, were posted in STAR but manually credited and debited in practice plus.  TOTAL DISASTER

OVERVIEW MAJOR BARRIERS  Case management focused on  Medicare certification  M/Caid and M/Caid Managed care  No concurrent review or authorizations for commercial payers  No authorization bill hold in financial system.  business office had to scramble once claim was produced or just bill with records

PROCESS IMPROVEMENT ENGAGEMENTS AT KMC  Various firms and solutions had already failed  consulting was a bad word  Process improvement opportunities are not visible to everyone.  Most common practice is to just add bodies to broken process  Adding bodies, is like adding layers of clothes to hide your extra weight  Nothing is solved

PROCESS IMPROVEMENT DAWNING OF A NEW DAY  Kern was bitten with the improvement bug  Once they were given some direction and ideas they took off and continue to look for opportunities  Watch words are-  maximize technology  pre-register every type of scheduled service  streamline check in- Customer first  automate claims submission expect 100% clean claims  don’t take no for an answer

PATIENT ACCESS JOURNEY  Divided registration  No pre-registration  No insurance verification  No co-pay collection  Full registration  Long wait times  Surgery scheduled w/out pre-op

PATIENT ACCESS TURNS THE SHIP  Implement pre-registration  On-line payments  Quality control over registration  Assembly line for patient packets  Developed check-in process  Assumed registration for diagnostic testing  Assumed registration for clinic services

PATIENT ACCESS HAS SAILED  Quality and eligibility software implemented  Focus on every error  Build edits to correct errors  Pre-Registration a day  On-line credit card and check processing  No bottle-neck at registration  Maximize reimbursement

HOSPITAL BUSINESS OFFICE PAPER, PAPER EVERYWHERE  Inpatient claims produced without authorizations  Staff had to secure the authorization or  claims were billed with medical records, majority of time  Room charges were often missing  designated staff member was forwarded acct. to add missing charge  Auto insurance was always billed as prime  California does not subrogate and only ERISA health plans require payment or denial. This does not include Medicare.  claims were often written off as commercial payer was not billed timely

HOSPTIAL BUSINESS OFFICE PAPER, PAPER EVERYWHERE  Correspondence was passed around until it ended up with the appropriate person  once dealt with it was filed in a daily folder  Payment process staff analyzed each EOB to determine if contractual was accurate  dramatically slowed down payment posting  Medicare billing was handled by 2 fte’s, even though average daily volume is less than 15 accounts.  Commercial billing and follow-up was handled by 3 fte’s and even though the average daily volume is 25, more often balances were written off to timelines.

HOSPITAL BUSINESS OFFICE MANUAL WAS THE WORD OF THE DAY  Adjustments were manually documented, forms completed and forwarded to supervisors to data enter  M/Caid reimbursement is low but current processes required multiple staff to achieve reimbursement. o KMC spent more then actually received in reimbursement  Remittance advice were manually reviewed by 1 fte  denials were documented in account notes  someone else reviewed denials and re-worked claims that claims editing system had deemed “clean”  Inpatient was handled by yet another fte  M/caid physical therapy was billed by anther fte  M/caid managed care was handled by 2 fte’s.

PATIENT FINANCIAL SERVICES A NEW DAY ARRIVES  Replaced existing claims editing vendor  10% clean claims and even then “clean claims were rebilled  New claims editing vendor programmed majority of errors to improve clean claims, now at 60%  M/Caid paper claims can now be sent electronically with automated program  Continually striving to improve clean claims to virtually eliminate errors

PATIENT FINANCIAL SERVICES A NEW DAY ARRIVES  Claims editing vendor automatically validates eligibility & changes destination and rules of claim as appropriate  report indicates the appropriate payer so financial system can be updated.  report indicates patients with no coverage  Eligibility errors are non-existent due to front-end efficiencies  M/caid denials are automatically adjusted, as defined  Non-covered charges are automatically adjusted  Eliminated re-work and re-processing of denials

PATIENT FINANCIAL SERVICES A NEW DAY ARRIVES  Payment processing posts payments and denials as reflected on EOB, staff merely post what they see  Zero payments posted have the Claim Control Number and reason, documented in the account notes.  Correspondence is answered and documented by 1 fte, same fte also answers all requests for records by attorney’s or subpoena's  Medicare and Commercial 1 fte performing billing function quit, but it was not a full time job anyway. Outsourced function to claims editing vendor.

PATIENT FINANCIAL SERVICES A NEW DAY ARRIVES  Commercial Follow-up is performed by 1 fte focused on making outgoing calls, by payer. Benchmark is resolving 40 claims per day  Established Underpayment review of daily payments, 1fte  created ACCESS database  payment files are imported the day after posting  accounts are reviewed against contracts  underpayment identified, account is documented and is sent to Collector

PATIENT FINANCIAL SERVICES A NEW DAY ARRIVES  Self-Pay was outsourced from Day One  eliminated statement production  eliminated mail returns  Eliminated staff required to answer patient calls  increased self-pay collections  1 fte is the designated as the hospital liaison  assists with resolving issues between vendor and KMC.

PATIENT FINANCIAL SERVICES BRAVE NEW WORLD  Continually striving to identify new opportunities to maximize technology and minimize staff intervention  Cash collections continue to exceed prior year  Billed A/R Days are hovering in the 50’s but we are working to decrease Billed A/R days to mid 40’s.

PATIENT FINANCIAL SERVICES A BRAVE NEW WORLD  12 staff members and 2 Supervisors  Working toward 100% clean claims  Goal for Medicare and M/Caid A/R greater than 30 days from billed date – 10%  Goal for Commercial A/R greater than 90 days from billed date- 10%  Automate anything and everything  Empower staff to be fierce agents of war

PROCESS IMPROVEMENT CONCEPTS Process improvement cannot be achieved with a cookie cutter approach  one solution does not fit all  nor does one product solve “everything” Equally dangerous is the self-help approach  Staff take courses and obtain certificates and titles  the process involves others outside of the focused area  the problem is – you don’t know what you don’t know. how can the best solution be achieved without experience garnered at other providers

LESSONS LEARNED  Challenge everything  Why can’t it be automated?  Does the task add value  Ask your colleagues  Network with fellow financial leaders  Don’t be afraid to ask the people presenting, we are more than happy to help.  THANK YOU  Susan Labow-  Helen Cullen –  Andree Campa –