Steven Levin, Connance Chief Executive Officer, shares recent trends he is seeing in the provider space in terms of self-pay, as well as tips on focusing technology efforts and follow-up account activity for streamlined results.
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HFMA: The first question I have for you is what kinds of trends are you hearing from your providers related to revenue cycle?
SL: We’re seeing business office teams facing continued growth in their self-pay accounts, from balance after insurance accounts as well as uninsured. There is growth in both the number of accounts and in the value of those accounts. So put simply, more accounts with more money at risk.
What’s also interesting is we’re hearing a lot about the complexity of the balance after accounts from providers. So, where it used to be co-pay or an uncovered procedure, now we are hearing about complicated co-insurance structures and having to calculate the percentage that the patient owes.
We’re also hearing a heightened level of sensitivity to helping patients with the financial process, both educating them as to what their responsibilities are, but also helping them work through the charity, and financial counseling processes.
HFMA: What types of cash opportunities are you seeing in the provider space?
SL: I’m going to focus on the business office and self-pay, as that’s where we spend most of our time. There’s a huge cash opportunity in helping get self-pay accounts into the right follow-up process. One size doesn’t fit all accounts, and you need to use segmentation based on analytics to put accounts into the proper process. Engage patients with the right message at the right time in the right medium, like letter or customer service call or simply a phone message.
There’s also significant cash opportunity in updating policies and procedures and related collection guidelines. Providers need to empower either their own customer service representatives, or their third party representatives, to help engage patients proactively solve their financial situation.
Healthcare’s not easy. Patients have a lot of questions. There are lots of very unique and special circumstances. It’s important that business offices do a good job of giving their resources all the tools to help that patient account work through the collection process.
We also see lots of leakage in the back and forth with providers and vendors. Hospitals use lots of vendors, and there’s a lot of activity going on, day-to-day, back and forth between vendors and provider’s business offices on individual accounts; asking for more information, trying to get clarification, following up on prior requests, and so on. There’s just a lot of hand offs, and movement back and forth. This activity creates leakage – lost accounts, slower response to a patient issue, less activity.
Finally, in terms of cash opportunity we see lots of manual activities. It’s amazing in today’s world, given what you can do with technology today, how much manual activity is actually happening in a business office. In my mind, it’s a waste of highly skilled resources. We’re not using technology efficiently to help our really smart people do a great job with their patients.
These items all speak to the financial side of your question. We actually also see major opportunities in compliance and oversight – addressing the risks and exposure of the operation. There is significant concern with respect to collection activity and how that activity is monitored and managed.
Do we know what’s happening? Are we able to audit, monitor and manage all those interactions in a way that, as a provider, we can say we know exactly what’s happened with all our patients? Can we proactively identify when there’s an issue, and can we solve it or take appropriate action before it becomes significant? We don’t have to wait 90 days or two months after the fact to discover the problem occurred. All of these sorts of compliance and oversight concerns are on the rise.
If you think about these ideas, how do we find them or how do we recognize them? There are a couple of things that we commonly see.
If we see a business office that’s treating all accounts the same way; everyone gets the same letters, or everyone gets the same phone call; everyone gets placed at the same time and the same spot or whatever. That’s always a tell-tale sign, because we all know from our own lives that it’s not one-size fits all.
Tied to that is this idea that there one message for everyone. Yes, there’s a common message, but patients need help, and the types of things the patients need in terms of resolving their bills can be different. Some people are more experienced and don’t need as much help, or don’t need the same kind of help as somebody for whom this is the first time at a hospital. Therefore, one message for everyone is also another tell-tale sign.
When we hear people tell us that policies and procedures haven’t been updated for several years that also suggests an opportunity.
When we hear providers say they can’t reconcile inventory at their vendors, they aren’t really able to do performance analysis or auditing of vendor activity, that’s another tell-tale sign that there’s probably administrative opportunities here. There’s probably cash leakage as well as compliance exposure.
When we hear about lots of accounts that have special handling — “we handle that one offline”, or “we use this manual work-around to do that” – that’s another sign that there is probably an opportunity.
One issue that’s become more common recently is that lots of people are having problems documenting self-pay bad debt reimbursements on their cost reports. They are having trouble demonstrating that all collection activity has stopped or that all accounts are being treated equally. That is another sign that existing data control is insufficient.
Lastly, when we talk to folks about their charity and community benefit accounting we find people that aren’t using presumptive charity or scrubbing open self-pay prior to bad debt placement. That is another sign that providers are probably leaving something on the table, whether it relates to community benefit or patient-friendly processes. With emerging regulations, it is also a compliance concern – that charity cases may be ending up in collections.
HFMA: Now you touched on technology briefly and the importance of it. How can providers ensure that they are at the technological level that they should be operating at?
SL: Well, certainly technology is key to the business office. Better business offices or leading business offices are technology-enabled. Technology gets skilled resources to focus on the right accounts at the right time. It helps get those accounts that don’t need attention to be pushed automatically through, while pulling the complicated accounts to the specialist desktops.
Given the volume of activity, given the complications we’re seeing in the contracts, and given the regulatory environment, success is certainly not found by eliminating people, but helping get current resources focused on the right issues at the right time with the right information. We need existing staffs to get more done.
There’s a long list of technology in the business office, and the technology is all great technology. Probably at the top of today’s implementation list are patient accounting systems and electronic medical records. Behind those two, which I think of as fundamental systems, are a whole bunch of other bolt-ons and additive applications.
What’s interesting when we talk to providers is that there’s a challenge in getting all of the IT or technology done in the time frame or sequence that they want. There’s a real sense of letting patient accounting systems and electronic medical records get priority and everything else gets behind them. I understand why at one level because those are such significant endeavors.
An interesting idea that we have heard in a number of business offices focuses on preparing for the big endeavors by risk reducing through other IT projects. They implement smaller technology pieces ahead of the bigger events to try to streamline some complicated process or operations, and thereby reduce some of the downside exposure and work in the bigger system implementation. It is a bit like cleaning out the refrigerator before replacing it – it’s easier to make the change when there is less stuff involved. By using flanking endeavors or preceding endeavors, they are able to reduce and improve the overall IT agenda – get more done faster, with lower risk and simplify the ongoing IT demands.
HFMA: Are there any innovative things Connance is doing to help provider’s lower days in A/R, reduce bad debt, and comply with charity care?
SL: This all starts with getting accounts into the right follow-up process. It’s about getting those accounts that need to be enrolled or eligible for programs or charity processing into that process early. It’s about getting those accounts which need collections into the right collection effort early, with the right resources.
We find that upwards of 31% of accounts being sent to bad debt should in fact be considered charity and taken as presumptive charity. But by sending those accounts to bad debt agencies, we’re diluting the efforts of our vendors; we’re putting ourselves in a bad way with patients, and we’re missing the opportunity to demonstrate our true community benefit and our true mission of healthcare. We find that many operations continue to process every self-pay account in the same way, or simply adjust for balance after insurance versus uninsured. It is more complicated than that.
We start with getting accounts into the right follow-up activity. This begins at the point of service and eligibility, areas where the industry’s made a lot of progress. We think you need to build upon that in the business office by using analytics to help get accounts into the most appropriate follow-up routine. Analytics can identify those accounts that should be pushed and prioritized for financial counseling, and if that process fails, allow the provider to take them as presumptive charity. Analytics can help customer service reps speak to the patients with the right language system and help them resolve those accounts.
Business offices all have different situations. Some have more resources at their disposal, some don’t. One of the things that we have spent a fair amount of time doing is giving every organization a way to start, and a road map to improve over time. We try to work with what they have, to get more from it, to create momentum and then to find easy opportunities for them to build on the success.
Unfortunately there’s no silver bullet here. So this is about working smarter over time and learning and improving and learning. If you do this right with segmentation and analytics, we’ve seen the ability to drive cash improvements upwards of 30%, all the while increasing and improving community benefit filings. So it is possible to realize more cash and improve your demonstrated community benefit activity.
These ideas are for providers doing the work yourself. Other opportunities are introduced if you are using third-parties to work your accounts. There’s a lot of opportunity in working smarter with vendors, to help vendors get engaged with patients faster and have more information at their disposal so they can give the patient a better experience. This will yield more cash which is good for vendors and providers alike as well as a better and more satisfied patient.
There are ways to do this to deliver lower risk and more compliance oversight. You can open up the business office to deploy more specialists and use more third parties. The goal is a better patient experience, more cash, better demonstration of charity and lowering A/R days.
