Mercy Health: A Revenue Cycle Turnaround Story Shannon White , President and COO, Ensemble Health Partners Anthony Seminaro , Regional CFO, Mercy Health Youngstown
Now more than ever, a healthy revenue cycle is an essential component to the viability of an organization; one that requires an innovative approach and impeccable coordination. 2 Proprietary and confidential | Ensemblehp.com
Current Industry Environment • Growing financial pressures require hospitals and healthcare systems to improve key performance indicators. • 98 percent of C suite members are considering outsourcing clinical and nonclinical functions to a third- party vendor https://www.prnewswire.com/news-releases/by-2022-average-hospital-costs-must-be-reduced-by-24-to-breakeven-and-outsourcing-may-be-the-solution-says-black- book-300643743.html https://images.magnetmail.net/images/clients/HFMA/attach/HFMA_MAP_Outsourcing_the_Revenue_Cycle.pdf 3 Proprietary and confidential | Ensemblehp.com
About Mercy Health 21 Hospital System $3.5B Annual Net Revenue One ministry serving eight regions in Ohio and Kentucky 4 Proprietary and confidential | Ensemblehp.com
• Uncharted waters – unprecedented financial deficit • System conversions represented significant risk • Disparate systems and vendors • Leadership structure not suited for size of organization • Missing a master plan • Not in the detail • Lack of accountability • Silos 5 Proprietary and confidential | Ensemblehp.com
Mercy Health Revenue Cycle: A Challenging Road Ahead Pre-Ensemble Ensemble Engagement Begins Prior to April April 2014 to November December February 2016 March 2016 May 2016 2014 October 2015 2015 2015 Ensemble Ensemble Mercy Health assessment began RCM purchased Decentralized Partnership Ended Begin migration completed and leadership Ensemble business office with large relationship with of Kentucky recommendations agreement with Health structure national RCM national RCM markets to vendor vendor future state presented Mercy Health Partners. Developed Begin patient Ensemble becomes a centralized remigration accounting wholly owned business office back to native system subsidiary of in Mason, OH patient accounting Mercy Health systems and continues to lead Mercy Health Revenue Cycle 6 Proprietary and confidential | Ensemblehp.com
A Recipe for Disaster Multiple Patient Decentralized Outsource to Varying Market Sizes Accounting Systems Unionized Markets Insourcing Operations Across Multiple States 7 Proprietary and confidential | Ensemblehp.com
A Recipe for Disaster 97% 40 50+ 10 Cash Collections to Basis Points Point-of- Unbilled Days Holding Outsourced Revenue Net Revenue Ratio Service Collections in Accounts Receivable Cycle Vendors $130M Cash Collections Shortfall 8 Proprietary and confidential | Ensemblehp.com
Case Study: Vendor Analytics Mercy Health A Challenging Road Ahead The Ensemble Difference • Errors identified in lookback: $2.2M Number of Vendors: 18 • Monthly error run rate : $100K-$200K Invoices Audited: 369 • Average Error Rate: 6.76% Line Item Charges Audited: • Cost Savings: 5% $2.77M 9 Proprietary and confidential | Ensemblehp.com
Case Study: Performance Improvement Through Insourcing Mercy Health The Ensemble Difference A Challenging Road Ahead MVA Vendor MVA Vendor • Baseline Annual Cost: $2.1M • Baseline Annual Cost: $1.7M Cost Reduction • Baseline Annual Cash : $20.7M • Baseline Annual Cash: $3.7M Cash Increase • Cost to Collect: 10.1% • ROI: 4,618% Increase • Cost to Collect: 9% Reduction Worker’s Compensation Vendor Worker’s Compensation Vendor • • Baseline Annual Cost: $2.1M Cost Reduction Baseline Annual Cost: $2.4M • • Baseline Annual Cash: $2.2M Cash Increase Baseline Annual Cash:$21.2M • • ROI: 5,488% Increase Cost to Collect: 11.3% • Cost to Collect: 10% Reduction 10 Proprietary and confidential | Ensemblehp.com
Ensemble Denials and Recovery Differentiators Appeal process automation to increase productivity for technical appeals. Deep clinical skills to work complex denials. Integration of legal expertise to challenge non-compliance with ERISA laws and other local laws. Intelligent workflow (Ensemble IQ) to escalate denials early via fully integrated web scraping. Advanced analytics to predict denials and pinpoint denial root causes. Real-time reporting engine leveraging 835s and close tracking of appeal success rates. 11 Proprietary and confidential | Ensemblehp.com
Denial Avoidance - Timeline & Results Client Benchmarks: • DACs established across 2015 initial denial all hospitals based upon rate: 10.85% common service-line leadership • 2016 initial denial Implementation rate: 10.29% of first-pass • 2017: initial denial denial data (away from write- rate: 9.34% offs) as focus Ensemble engaged for Revenue Cycle management Denial Avoidance introduced to client – facilities & revenue cycle – through “boot camps” 12 Proprietary and confidential | Ensemblehp.com
Case Study: Denial Avoidance Financial Impact Mercy Health The Ensemble Difference A Challenging Road Ahead • .94% Denial rate reduction in less than 12 months First Pass Denial Rate • $174.2M Gross charge denial reduction YTD 2016: 10.29% • 65% Appeal overturn rate • $13.4M Net impact (appeal overturn rate) 13 Proprietary and confidential | Ensemblehp.com
Case Study: Patient Accounting Conversion Mercy Health: 6 Hospital Market in Ohio INCREASED NET REVENUE BY 5.4% Net $41,358,277.73 POST EPIC GO LIVE Revenue THROUGH DOCUMENTATION BASED Increase CHARGE CAPTURE AND REVENUE EDUCATION $3,326,706.76 REDUCTION IN NET AR OVER 3 MONTH TIME PERIOD THROUGH WORKFLOW AND SYSTEM EFFICINCIES $5,100,000 Net Benefit CASH FLOW NORMALIZATION < 90 DAYS FROM CHARGE MASTER [EPIC PUBLISHED AVERAGE 180 DAYS] CONFIGURATION INITIATIVES RETURN TO BASELINE GROSS REVENUE WITHIN 4 DAYS 14 Proprietary and confidential | Ensemblehp.com
Mercy Health Systemwide Impact of Automation AUTOMATED STATUSING CLAIM STATUS INTEGRATION RESULTING IN OVER EQUIVALENT TO 33-38 FTEs AT 30,000 ACCOUNTS QUALIFYING FOR AUTOMATED AVERAGE PRODUCTION STATUS AND FOLLOW UP PRE-ACCESS AUTOMATION WORKFLOW AUTHORIZATION, VERIFICATION, NOTICE OF EQUIVALENT TO 118 FTEs , OVER ADMISSION, AND VERIFICATION AUTOMATION 90,000 MONTHLY ACCOUNTS RESULTS IN 75.9% OF WORKFLOW AUTOMATION $7.5M – $7.8M BENEFIT POINT OF SERVICE 95.83% IMPROVEMENT POST IN REDUCED FTE EXPENSE THROUGH AUTOMATED ESTIMATES AUTOMATION OF WORKFLOW PRE-REGISTRATION AND AUTHORIZATION DAYS OUT IMPROVEMENT FROM 1-2 DAYS TO 5 DAYS OUT (NON-EPIC) 10 DAYS OUT (EPIC) AUTOMATED CHARGE CAPTURE AUDIT OF ALL 100% VENDOR INVOICING REVIEWS ACCOUNTS RESULTING IN OVER $15M ADDED IDENTIFIED $3.3M OF INVOICING NET REVENUE ERRORS RECOVERED 15 Proprietary and confidential | Ensemblehp.com
Avoiding Disaster and Heading to Excellence 16 Proprietary and confidential | Ensemblehp.com
Clear and Concrete Steps: 1. Establish routine meetings with CFO or VP finance – Gain Vision and Buy-in 2. Develop a scorecard 3. Set a benchmark to measure against – Understand the definitions 4. Establish a multi-disciplinary taskforce 5. Creating Sustainable Success 17 Proprietary and confidential | Ensemblehp.com
1) Establish Regular Top-Level Meetings • Key participants: CFO or VP finance • Recommended Cadence: Monthly at Minimum and promote an open door concept for any arising concerns • Suggested Structure: • KPI Review (performance against benchmark and change since last meeting) • Action plan and status review • CFO expectations • Assess current resources and structure • Updates on any new service line thoughts or payer changes 18 Proprietary and confidential | Ensemblehp.com
19 Proprietary and confidential | Ensemblehp.com
2) Develop a Scorecard 20 Proprietary and confidential | Ensemblehp.com
3) Set a Benchmark • Suggested sources • MAP – Best for … • HBI – Best for … • MGMA – Best for … • Dig in and understand the “why” behind your variance from industry benchmark • Three key questions to ask: 1. Do I have a resource opportunity? Staffing/Capital etc. 2. Do I have a technology opportunity? Manual vs. automated processes 3. Do I have a leadership opportunity? Who is the agent for operational improvement • Understand the definitions of the metrics • What is a Denial? First Pass and Write-offs? • Cost to collect • Cash to net revenue • MAP Application 21 Proprietary and confidential | Ensemblehp.com
Consistent Results Driven By Analytics CFO Summary Key Indicators to Quarterly Executive Cash Collections Reporting Industry Best Practices Summary Reporting 22 Proprietary and confidential | Ensemblehp.com
Daily Cash Collections Tracking 23 Proprietary and confidential | Ensemblehp.com
Recommend
More recommend
