2183–Blending Insights with Optimization Using Client Metrics to drive change Matt Wormser, GE Healthcare. Laura Steinkraus, Schumacher Group

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Agenda 5 Revenue cycle challenges Lessons from the other industries Putting theory into practice: Schumacher experience The use of cross-functional teams and root cause analysis Takeaways Q & A

Endemic failure in the revenue cycle Typical organizations see between 5% and 20% of their claims fail upon initial submission*. Imagine if one in ten products you purchased were defective upon initial use? Our challenge is to implement systems to prevent past failures from recurring. 6 * Source: internal GE documentation on “clean claim” performance, HFMA MAP metrics.

Core tenets of quality improvement 7 Cross functional teams Root cause analysis Eliminate variation Define>Measure>Analyze>Improve>Contro l Process analysis & redesign Continuous improvement Six Sigma Total Quality Management Reengineering

What is a ‘defect’? Think of the revenue cycle as a manufacturing line creating billing successes. A defect is anything that requires rework in order to get paid – rejected or denied claims requiring calls to the patient, clinic or payer. Each defect delays payment, driving up AR days and leading to reduced collections. Industry estimates rework costs at $15 per denial. 8

Toyota Production System Jidoka: “Quality must be built in during the manufacturing process! If an equipment malfunction or a defective part is discovered, the affected machine automatically stops, and operators cease production and correct the problem.” * Daily monitoring the use of reporting tools / analytics, along with a commitment to “doing it right the first time” are critical to achieving the same results in the healthcare revenue cycle. 9 * Source:

The holy war of healthcare billing 10 Billing Team IT : Just say “no” and hope they go away. Back End : “If only they would get off their duffs and enter good data.” Front End : “If they had any clue what we have to go through up front…”

The Iron Triangle of billing success 11 Revenu e Cycle Succes s People : Train, inspire, reward, succeed Process : Clear processes, enforced through training, reporting Technology : Leverage what you have, implement what you don’t.

Building project teams to drive success The revenue cycle covers all elements of the enterprise – project teams need to as well. The billing office: The front line of seeing what didn’t happen upstream. The front desk (scheduling, pre-arrival, charge entry team, etc.): Critical to success at each stage. IT: Provides the technology backbone of any successful enterprise. Training: Ensures that process and knowledge gets disseminated successfully. 12

Team composition Leader: drives balance and accountability. Regular members: a core group meeting typically weekly to review metrics, research issues and make and track action items. Ad Hoc: “SMEs” (subject matter/process experts) called in for specific issues. Resource: Called in as needed for specific projects/issues. Executive Sponsor: Responsible for driving the process and serve as escalation point. 13

Keys to success T – E – A – M mentality: think as an enterprise to succeed as one. No turf mentalities allowed. A surprisingly small number of bad attitudes can doom a team. Productive skeptics are welcome. Celebrate successes, understand failures. Cycle: the work can be a grind, but it’s highly valuable. Enroll a cross-section of the enterprise to get exposure to multiple roles. Have fun – it’s actually possible! 14

Six Sigma’s “5 Whys” Why did my claim get denied? Because the payer indicated that the patient was not eligible on service date. Why did we send a claim for an ineligible patient? Because we weren’t able to verify insurance prior to patient arrival. Why weren’t we able to verify insurance? Well we tried, but our staff-person missed that the patient was covered under a Medicare Advantage plan (Medicaid HMO, carve out plan, etc.). How did the staff-person miss that key data? Because our training materials were not up to date (time constraints during check-in / understaffed pre-arrival team / new hires / poor tools, etc.). Why were my training materials not up to date? ICD-10 / ACA / insufficient funding / multiple mandates, you name it!!! 15

Change = Challenge Process change is inherently difficult and underestimated. It is human nature for us to gravitate back to ‘the old way” when new tools and processes are put in place. Simply throwing technology at a problem is doomed to fail. Monitoring is critical! Process changes, need to be continually monitored until the “new way” becomes the norm. Likewise to make sure you got it right! 16

Schumacher Group Medical Billing Medical staffing and billing group active in 28 states, 264 facilities. Primary focus Emergency and Hospital staffing and billing. Over 3,000 providers treating 4 million patients annually. Management changes in late 2012 led to process improvement effort. 17

Pre-existing Challenges & Opportunities Departure of existing leadership at same time. Departments working in Silos. Lack of Communication. Outdated and inefficient policies and procedures. Practice management application split between IT and operations. Incomplete knowledge of existing technology setup 18

Strategy Quick Wins. Cross department participation. Key Stakeholder buy in. Work out sessions. Cross Training Monthly KPI report outs to executive leadership GE “Performance Manager” Partnership to help leverage technology 19

Key Performance Indicators 20 Claim and Charge Lag Days EDI Remittance Posting Rates and Top non-posting reasons Eligibility Automation, Utilization and Verification Rates Eligibility payer gap & rejection analysis Denials Analysis by category, “scenario”, payer, clinic, etc. Rejections (pre-adjudication) by category, payer, etc. Clean Claims rate Paper claim volume & drivers Technology opportunity assessments Claim form setup / logic issues Assessments for additional automation opportunities. Process improvement analyses – Credentialing, Call Center, Insurance Verification, etc. Billing Performance Metrics Pre-Billing Performance Metrics Opportunity Appraisal

Denials Improvements 21 20,000 fewer denials per month Note: for reporting purposes, a “Denial” is any ERA with a “Denied” status, or $0 payment and allowed amount.

Categories, denial scenarios help drive root cause analysis 22

Transitioning to new web-based tools 23

Claim Rejection Improvements 24 Rejections down 63 percent

Eligibility Improvements 25 Closure of 86% of the verification gap

Paper Claims Improvements 26 13,500 fewer paper claims per month

Remittance Posting Improvements 27 61% improvement in EDI posting

Remittance Edit Improvements 28 75% reduction in EDI remit edits

Improvement summary Denials: 20,000 fewer denials per month Claim rejections: down 63 percent Paper claims: 13,500 fewer paper claims/mo Eligibility verification: Closure of 86% of gap Remittance posting: 61% increase in posting ERA remittance “kick-outs”: 75% decline Clean claim rate: 43% improvement In sum – a more efficient, successful operation 29

Challenges, Lessons Learned Managing in a matrix environment. Resources, resources, resources. Knowing what we don’t know. Maintaining support for the effort when time, conflicting priorities exist. Understanding what we could and can’t do with our practice management system. Getting users to adapt to new processes. 30

Process overview: Set KPI-based goals Build a solid team Use reliable, consistent metrics Set your schedule – weekly/monthly/quarterly Drive root cause analysis – what went wrong? Determine your follow up actions Record your victories and failures Stick to it – process improvement is a journey, not a destination. 31

Metrics Subscription Options 32 Client Metrics Client Metrics Plus Client Metrics Premium Performance Manager Allows for tracking performance over time, identifying problem areas, and peer to peer benchmarking capability Leverages GE Healthcare expertise to help implement sustainable processes and improved workflows, resulting in optimized departmental productivity. Provides monthly reporting, with enhanced metric suite and breakdowns, providing greater insight into performance opportunities. Helps your organization better understand how to analyze metrics and track performance. Quarterly report on key financial metrics at enterprise level Some benchmarking Quarterly report on key financial metrics at enterprise level Some benchmarking Access to Client Metrics Plus Partnership with GE Healthcare consultants, who will complete all analysis and provide 1)targeted action plans to implement change, 2)regular monitoring, 3)monthly reviews, 4)KPI focused workouts, 5)active configuration, as necessary Access to Client Metrics Plus Partnership with GE Healthcare consultants, who will complete all analysis and provide 1)targeted action plans to implement change, 2)regular monitoring, 3)monthly reviews, 4)KPI focused workouts, 5)active configuration, as necessary Monthly reporting on key financial metrics with drill through capability Enhanced breakdown capabilities and benchmarking Access to enhanced metric suite Monthly reporting on key financial metrics with drill through capability Enhanced breakdown capabilities and benchmarking Access to enhanced metric suite Access to Client Metrics Plus Partnership with GE Healthcare consultants to 1)understand how to leverage the value of Client Metrics, 2)identify improvement areas, and 3)develop targeted action plans to implement change Access to Client Metrics Plus Partnership with GE Healthcare consultants to 1)understand how to leverage the value of Client Metrics, 2)identify improvement areas, and 3)develop targeted action plans to implement change Part of existing support agreement Monthly subscription 2-year term Monthly subscription 2-year term Monthly subscription Ongoing Monthly subscription Ongoing Monthly subscription 2-year term Monthly subscription 2-year term

33 Questions