Improving Revenue Cycle Outcome: Harnessing the Power of Process Analytics and Automated Workflow April 17, 2015

Agenda Introductions Baseline definitions Why these solutions are important Process analytic concepts Automated workflow concepts Using BPM as competitive advantage Applying business rules to drive higher performance Evolution of revenue cycle Q&A 1

Need to look for different pictures to liven up the slides – cosmetic, will focus on after content is solidified. Introductions

With us today Phillip Brooks Director KPMG LLP Over 20 years healthcare experience Focuses on Revenue Cycle Redesign, Capital Budgeting and Planning, Vendor Selection and Implementation, and Operational Efficiency and Cost Reduction Works with community health organizations, large integrated providers, and academic medical centers Phillip Brooks Director KPMG LLP

Baseline definitions

Baseline: Definitions Workflow: repeatable patterns of activity that involve a system of resources, roles, knowledgeable worker interaction, and information flow Automated Workflow: a collection of methods and tools used to document, improve, and monitor business processes as defined by standard workflows Process Analytics: the ability to access data about individual instances of a process and use that data to monitor, analyze, and improve an organization’s critical operational processes Business Process Management (BPM): the combination of Automated Workflow solutions that are specifically designed for revenue cycle operations and incorporate Process Analytic concepts to create an interactive system that can automatically prioritize high-value tasks to the right people to improve efficiency and drive down costs

Why these solutions are important Tom Why these solutions are important

Why these solutions are important Do you need an automated workflow? Have you driven 20 percent of costs out of your revenue cycle over the past five years? Have you improved net revenue annually? Have you reduced your headcount by 10 percent? Have you improved processing times by 50 percent? Tom Examples: Have you driven 20% - Do you have technology in place to reduce manually touching each account. Do all your systems talk or are you still using one system for this and another system for that…….A streamlined, integrated approach saves time and money. Improved Annually - Do you have processes in place to CONTINUOUSLY review people, process, and technology? Do you address this once every 5 years and then move onto another project. This is a CONSTANT battle that needs your attention. Headcount by 10% - Have you jumped on the EXCEPTION-BASED technologies? Do you leverage the HIPAA X12 EDI transactions to eliminate TOUCHING all accounts? 835 & 277 identifying problems early, electronically. DO more with LESS. Processing – Not sure what this means If you answered “no” to any of the above questions, you likely need to think about implementing an automated workflow approach.

Evolve your revenue cycle into revenue cycle 3.0 RC 1.0 RC 2.0 RC 3.0 Traditional assessments, Automated workflow Automated workflow Recommendations, and design and deployment with process enabled options and analytics Implementation Allows for deeper penetration into root cause issues and Due to a change in Automated workflow allows enables automated workflow organizational focus or for repeatable, quicker-paced, to perform continuous change in personnel, and sustainable monitoring of micro-processes benefits erode over time. Improvements, even that contribute to delays in All processing bills, delays in when personnel changes, cash flow, loss of revenue, since workflow is hardcoded. and increase costs.

Using BPM as competitive advantage Placeholder – need to add slides. Using BPM as competitive advantage

Using BPM as a competitive advantage: Transformation through automation Business Process Management is not just about managing a defined basket of work activities faster or more efficiently. It is also about improving results. What can BPM do? Identify Highest value accounts for follow-up and push them up the queue Route POS Collections efforts for prescreening by financial clearance staff Help speed/standardize medical eligibility status processes and tasks Christine & Kim Tom to chime in Identify root causes of identified anomalies Display how a single problem manifests and interrelates across entire revenue cycle ecosystem

Process analytic concepts

Process analytic concepts: Why the need? Business need to combine data from multiple systems Requirement to compare historical and current comparative analysis to understand improvement strategies Need to make real-time proactive decisions and move away from reactive actions Must find ways to mitigate revenue at risk Leverage info from slide 8. Need to view consolidated revenue cycle operations

Process analytic concepts: Benefits of using data analytics Root cause analysis of denied claims to reduce at source Rapid identification of daily productivity performance to take appropriate actions Simplify presentation of actionable management information allowing for faster decision making Financial Improvement Quickly understand process outcomes to make adjustments Consolidation of data from multiple sources to provide quality scorecards for staff Tom Job/staff outcomes trending to monitor work outcomes

Process analytic concepts: Case study #1 Overview A not-for-profit integrated healthcare system comprising of 12 hospitals whose net patient revenue is $3.7 billion with total system discharges of 172k. Problem Decentralized business offices that did not take advantage of system wide standards and economies of scale. Disparate patient accounting systems. Outpace Cash goals in the first year of implementation Improve Denial and underpayment processing by working active issues in an automated, timely manner Scorecard Tom Study to get Hospital from Level 1.0 to 3.0. Christine & Kim to reinforce from Revenue Cycle perspective Reduce Future denials through root cause analysis and process improvement Equip Support the centralized business office strategy while also redeploying associates to high-value roles

Automated workflow concepts

Automated workflow concepts BPM is a collection of methods and tools used to document, improve, and monitor revenue cycle processes. The Process The Result 1 2 3 4 5 Revenue cycle processes are modeled to document current state. An undefined, inconsistent, and over-complicated process... A B C = The revenue cycle processes are simulated in order to identify gaps. D E The processes are streamlined through reengineering to fill gaps and eliminate bottlenecks. BECOMES A simplified, consistent, and streamlined process. All Christine/Kim – discuss Process Automation is introduced into the processes wherever possible. A B C = The processes are monitored to ensure improved outcomes are achieved. Unnecessary steps and task variability are reduced while efficiencies are gained and financial outcomes are improved.

Automated workflow concepts (continued) BPM is used to identify bottlenecks, delays, loopbacks, and insufficient resourcing, then improve efficiency and effectiveness through streamlining activities. Process bottlenecks are delays and activities that cost an excessive amount of money and/or time. Delays occur because there is insufficient notification that one activity is finished so that the next one can start. A process with loopbacks has bad process design: processes should always move forward in time and control. All Key: historically, it’s been retrospective…workflow is immediate and provides ability to deal with bottlenecks Tom will chime in. Insufficient available resource pools to execute an activity can cause a process to be drawn out, costing time and money.

Automated workflow concepts: Additional benefits According to Info-Tech Research Group, Over 80% of organizations saw clear benefits as a result of automated workflow implementation. Adaptability: Increased flexibility, scalability, to react to changes in the industry.  Reliability: Processes are repeatable, automated, and more streamlined, which helps reduce variability.  Profitability: Aligning RC activities closely with high-value outcomes may positively impact the bottom line, including increased net revenue and ROI.  Improved efficiency: Identifying the next highest value activity for maximum value in a repeatable processes contributes to smoother operations.  Kim to bring up process analytics to identify key metrics. (80% comes from 20% of volume) Predictability: More projects and tasks will be completed on time with a reduced cost model.  Increased productivity and efficiency: Higher request resolution means that end users have what they need to do their jobs. 

Effective BPM consists of a five-step lifecycle to maximize outcomes Modeling Revenue cycle processes are modeled to document current state. Simulation The revenue cycle processes are simulated in order to identify process gaps. Streamlining The processes are streamlined through reengineering to fill gaps and help eliminate bottlenecks. Automation Automation is introduced into the processes wherever possible. Management The processes are monitored through process analysis, alerting management when changes are needed and ensuring improved outcomes. This may be a slide to skim over to ensure getting to slides 21 & 22. Christine/Kim

Applying business rules to drive higher performance

Applying business rules to drive higher performance: case study #2 Overview A not-for-profit integrated health system with an academic medical center comprising of 7 hospitals whose net patient revenue is $2.3 billion with total system discharges of 108k. Problem Lack of technology. Manual processes were inefficient and days in AR were not improving. Operational teams were not making headway against organizational goals. Outpace Three year risk-adjusted ROI of 435% Improve Account representative productivity and patient satisfaction – cost to collect Scorecard Tom At one 700-bed provider, the implementation of an automated workflow delivered almost $14 million in savings in the first three years, just by reducing avoidable losses and improving claims processing. (Source: Forrester Consulting, “The Total Economic Impact Of Ontario Systems Artiva Healthcare,” (March 2008)) The key to this is technology. Reduce Future denials through root cause analysis and process improvement Equip Providing a single source of truth with data to make better management decisions

Evolution of revenue cycle

Evolution of the revenue cycle 1980 (DRGs) 1990 (APCs) 2000 2010 (ACOs) Today Loosely Managed Highly manual/paper based Charge based blended with cost + reimbursement Localized Silo Management RC departments managed independently Improvement initiatives didn’t fully consider total impact Primarily Cash Flow focus Localized Revenue Cycle Management Emergence of “Rev Cycle” vs. Dept focus Denial Management becomes a discipline Get paid the maximum appropriate Net Revenue, cash flow, and overall cost mgmt Christine/Kim footnote – good to keep at end Enterprise Revenue Cycle Management “Systems Thinking” (ToC) and Connected Efficiency and value-driven Big data and guided discovery Net Revenue and actual cost combination

What should you do next? Evaluate automated workflow capabilities in your current environment Evaluate Process Analytic capabilities Build appropriate business case to support BPM deployment Gain insight into revenue cycle processes and drive significant benefits Christine/Kim Tom – workflow capabilities

In summary New Business Models At KPMG, we believe that health plans, providers, and life sciences companies should be thinking beyond transformation and focus more on healthcare “convergence” and the broader implications of operating in a more collaborative and integrated U.S. healthcare delivery model. While transformation of current operations is likely going to be a business requirement, the real question for forward-looking organizations is what role they plan to play in a new and more converged health system. Christine/Kim

Questions?

Contact information Phillip Brooks, Director, Advisory KPMG LLP 330-329-1269 pebrooks@kpmg.com

Thank You

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