1. acumen insight ideas attention reach expertise depth agility talent TORCH Annual Conference Rural Hospital Finance Update April 8, 2015 Deborah Whitley

2. acumen insight ideas attention reach expertise depth agility talent Agenda  What is important for today’s financial concerns?  What is important for tomorrow’s financial concerns?  What are the most important concerns at any time?

3. acumen insight ideas attention reach expertise depth agility talent Why Concerns?  Overall Gross Revenues Up  Overall Net Revenues Up  Overall Collection Rates Down  Overall Gross Accounts Receivable Up  Overall Net Accounts Receivable Down  Overall Average Estimated Collectible A/R Down

4. acumen insight ideas attention reach expertise depth agility talent What is an important source of income for your hospital?  Electronic Health Record Incentive Payments  Medicare and Medicaid Incentive Monies  Medicaid Disproportionate Share  1115 Waiver Payments  Uncompensated Care  DSRIP  Nursing Home UPL Program

5. acumen insight ideas attention reach expertise depth agility talent Proposed New Regulations  CMS Stage 3 Meaningful Use  Calendar year reporting starting 2017  Focus on improving health care outcomes and further advance Interoperability  Did not address program year 2015 2015 as of right now still a full year of reporting NOT 90 days Potentially additional regulations on the horizon  Public Comment period ends May 29 th, 2015

6. acumen insight ideas attention reach expertise depth agility talent Proposed New Regulations  Office of the National Coordinator – Program Modifications  Modifying other aspects of the programs to match long-term goals, reduce complexity, and lessen providers’ reporting burden?  Interoperability  Did not address program year 2015 2015 as of right now still a full year of reporting NOT 90 days  Public Comment period ends May 29 th, 2015

7. acumen insight ideas attention reach expertise depth agility talent Texas Medicaid EHR  FY14 Subsequent Payment – January 2015  Questionnaire has to be returned to Receive Subsequent Year Payment  NEW Questionnaire Issued Recently  CGI – Third party vendor implementing Texas Medicaid EMR program  ERRORS- Recoupments

8. acumen insight ideas attention reach expertise depth agility talent Meaningful Use Audits  Program year 2014 should be ramping up soon  All or Nothing Results  DOCUMENTATION, DOCUMENTATION, DOCUMENTATION!  “Flexibility” Rule  Security Risk Analysis

9. acumen insight ideas attention reach expertise depth agility talent Meaningful Use Audits- Stats  Post Payment Audits of Eligible Hospitals  651  613 or 94.2% have been completed  29 or 4.7% FAILED  Proposed Amount of Returned Incentive Payment Ranged from $280,414 to $3,430,592  Average Proposed Returned Incentive Payment $1,132,937 per Hospital

10. acumen insight ideas attention reach expertise depth agility talent Meaningful Use Audits- Stats  Post Payment Audits of Eligible Providers  4,780  4,601 or 96.3% have been completed  1,106 or 24% FAILED to meet MU Standards  Average Proposed Returned Incentive Payment $16,863 per Eligible Provider

11. acumen insight ideas attention reach expertise depth agility talent Audits- Don’t have to just be negative results  Medicare HITECH Audits  PPS & CAH – Every Cost Report that settles a program year  Done by MAC- Novitas  Medicaid Pre/Post Payment Audits  Federal OIG Medicaid Audits

12. acumen insight ideas attention reach expertise depth agility talent Medicare Penalties are HERE!  Hospitals  CAH – Meet MU in 2015 or lose.33% of add-on  PPS – Had to meet in 2013 or by 10/01/2014 or lose.25% of Market Basket Update in 2015  Eligible Professionals  PQRS  EMR  Value Based Modifier

13. acumen insight ideas attention reach expertise depth agility talent What is ICD-10 and Why is it important to the Healthcare Community?  International Classification of Disease (ICD) Codes were set up to be the international classifications for all diseases and many other health problems for purposes of health management  ICD codes are now a key component in reimbursement, quality and utilization review

14. acumen insight ideas attention reach expertise depth agility talent What is it and how big is it?  It replaces ICD-9. It is NOT a revised version of ICD-9.  ICD-9-CM  Diagnosis: 14,000  ICD-10-CM  Diagnosis: 68,000

15. acumen insight ideas attention reach expertise depth agility talent Key ICD-10-CM Code Comparison  Tobacco Abuse  ICD-9: 1 code ICD 10-CM: 5 codes  Diabetes Mellitus  ICD-9: 10 codes ICD-10-CM: 318 codes  Fracture of the Radius  ICD-9: 33 codesICD-10-CM: 1,818 codes

16. acumen insight ideas attention reach expertise depth agility talent Organization Readiness?  Map a patient’s encounter and look at every piece in the organization touched by ICD-9  Financial/ HIM/ IT- Billing systems, DRG grouper, claims software, medical record abstracting, encoding software and case mix systems  Clinical- Patient care protocols, medical necessity, laboratory and pharmacy systems, utilization, quality and case management  Patients- Patient registration and scheduling systems, advance beneficiary notice, preauthorization

17. acumen insight ideas attention reach expertise depth agility talent Budgeting and Manage Cash Flow ? 1. What system upgrades are needed?  What costs are involved?  Are they included in existing vendor agreements?  What customer support (implementation, testing, training) will the vendor be offering? 2. Cash Reserves set aside or access to cash through a loan or line of credit to avoid potential headaches  The amount of reserves needed to set aside will be impacted by the preparation work you do in your facility

18. acumen insight ideas attention reach expertise depth agility talent ICD-10 Go Live- Before and The Day After……..  Assessment of Readiness  Which codes apply to your facility? Know them and apply them  Plan for dual ICD-9 and 10 codes for a brief period to address services rendered before October 1  Monitor physician documentation to ensure ICD-10 compliance  Monitor impact on claim-processing activity, claim denials and rejections  Audit coder productivity and accuracy  Schedule a 30-day post conversion claims assessment

19. acumen insight ideas attention reach expertise depth agility talent The Future? Why do we care about ICD-10-CM?  ICD-11 will build on ICD-10  The final draft is expected to submitted to the World Health Assembly for official endorsement by 2017  It will be impossible to go from ICD-9 to ICD-11 without the move to ICD-10

20. acumen insight ideas attention reach expertise depth agility talent Questions? Deborah Whitley, CPA Managing Director | BKD, LLP 7901 Woodway Dr., Suite 100 Waco, TX 76712 254.776.8244 Waco 254.756.8650 Direct 254.776.8277 Fax http://www.bkd.com/ http://www.bkd.com/ dwhitley@bkd.com 