1. Applying Lean Principles for Revenue Cycle Improvements
Debbie Gray, Director Patient Financial Services & Managed Care
UNC Lenoir Health Care
November 7, 2017
AAHAM Carolina

2. UNC Lenoir Health Care Kinston, NC

3. UNC Lenoir Health Care Statistics Fiscal Year 2016 261 Licensed Beds
218 Acute
26 SNF (not presently in use)
17 Rehab
Payor Mix:
Medicare 53%
Medicaid 18%
BCBS, Commercial, Other 21%
Self Pay 8%
FTEs: 798 (Hospital)
Medicare ALOS: 5.2
ALOS All Patients: 4.7
Medicare CMI: 1.5
5,598 Admissions (Adults/Newborns and IP Rehab)
42,218 ED Visits
Patient Days = 26,755 (Adults/Newborns and IP Rehab)
Operating Revenue = $269 million
Net Revenue = $104 million
Days Cash on Hand as of 9/30/16 = 432
Statistics
Fiscal Year 2016

4. Demographics Kinston Lenoir County North Carolina
Lenoir County is designated Tier 1 (most distressed) by NC Department of Commerce for 2016.
County Tiers are calculated using four factors:
Average unemployment rate
Median household income
Percentage growth in population
Adjusted property tax base per capita
Kinston
Lenoir
County
North Carolina
Population Change, 2000 – 2015
-9.7%
-2.5%
+24.8%
Percent Below
Poverty Level, 2014
32.8%
23.7%
17.2%
Median Household
Income, 2014
$28,608
$35,687
$46,693
Children Under 18
in Poverty, 2014
55.1%
37.7%
25%
Lenoir County
Source: North Carolina Department of Commerce
Source: US Census Bureau; American Community Survey ; AdvanceED Executive Summary for Lenoir County Schools 2015

5. The Revenue Cycle

6. The Revenue Cycle
Characteristics of an Effective and Efficient Revenue Cycle:
Dedicated and well-trained staff
Shared accountability between the front end (Registration) and back end (Billing)
Consistent, well-documented and properly communicated policies, procedures and performance expectations.
Effective management reporting around relevant performance metrics.

7. Lean
Originated in the automobile industry in Japan to improve manufacturing processes.
A method of streamlining a process, resulting in increased revenue, reduced costs and improved customer satisfaction.
Lean is achieved by removing “waste” from a process, synchronizing work flows, and managing variability.

8. Alphabet Soup TPOC – VSA – RIE – What!?!?
TPOC – Transformation Plan of Care (Organizational Level)
VSA – Value Stream Analysis (Area of Focus)
RIE – Rapid Improvement Event (Process Level)
Projects, Just Do-its, and Stop-its along the way

9. Lean Techniques: Revenue Cycle Ideal State
Left Brain
Right Brain

10. Lean Techniques: RCVSA Current State Map
Pink = Waste

11. Lean Techniques: RCVSA Future State

12. Fishbone: AR Days

13. Lean Techniques: PFS Project Gaps
No.
GAPS
Root Cause 1
Accounts on tracing reports are not worked consistently
No consistent standard work established for tracing reports; Lack of technical skills; no clear prioritization of other duties 2
Reports not updated according to schedule
Dedicated staff not in place to update reports / Restricted access to report capabilities 4
Unclear documentation on accounts
Use of insurer specific jargon, typing errors in comments; lack of awareness of comment contents 5
Balance moved prematurely
No consistent guidelines established for billing patient or other responsible insurer (i.e. information requested from pt, nursing home / Medicare billing questions); number of receipts results in automatic balance transfer in Meditech 6
Timely response from outside departments not consistent
No organizational expectation / accountability for responses; Insufficient information provided to referred department; Lack of secondary contact person list 7
One to one communication not utilized
Contact person for specific issue not identified; Appropriate party for issues not always known; "blast" s sent to multiple people 8
Inconsistencies in appropriate research completed prior to referral
Resources not known; staff empowered / expectation set for individual research; appropriate presentation of background information not consistently provided to referral 9
Delay tactics / conflicting information received by insurers
No established policy on when to escalate account; utilization of appropriate scripting; availability of contractual information 10
Inaccurate patient information on accounts
Patient provides incorrect information; registration errors, Meditech information flow

14. Lean Techniques: PFS Project Solutions
Standard work established for claims analysts outlining priority of accounts, action items required, and appropriate escalation to management to resolve claim issues.
Excel training provided to claims analysts staff to ensure efficient use of software.
Resource list compiled for commercial claims analysts outlining all available resources and best-practice methods (online, phone, etc.)
Guidelines provided for account comments in Meditech to properly communicate claim status.

15. Lean Techniques: PFS Project Solutions
Developed cross-train matrix to ensure consistent, efficient completion of departmental duties.
Standard work established for COB coordination.
Created process for obtaining requested information from patients when requested by insurer.
Developed goals for accounts with credit balances.

16. Key Performance Indicators

17. Accounts Receivable Days

18. Key Performance Indicators
Internal Compliance review

19. Key Performance Indicators

20. Key Performance Indicators

21. Key Performance Indicators
Excludes BCBS Denials
Includes BCBS Denials

22. Sustainment Improve Communication
Weekly Accounts Receivable (AR) Huddles
Monthly Metrics review at Revenue Cycle Meetings
Transparency
KPI Dashboard-Push data monthly to Senior Leadership
Accountability
Develop trigger points and countermeasures for metrics

23. AR Huddle Board

24. AR Huddle Graphs

25. Denials Management Metrics

26. Revenue Cycle VSA Board

27. Key Performance Indicators

28. Results Red vs. Green
AR AGING 2014
AR AGING 2017

29. Questions/Comments