HIPAA Collaborative of Wisconsin Spring Conference - May 7, 2004 ROI with the HIPAA Transactions Suzanne Ronde Aur

1. HIPAA Collaborative of Wisconsin Spring Conference - May 7, 2004 ROI with the HIPAA Transactions Suzanne Ronde Aurora Health Care Milwaukee, WI

3. Discussion Focused On: The HIPAA Transactions � A Mountain of Opportunity? Getting Started: Looking Up from the Bottom Determining the Possible Peaks of Return What to Analyze Revenue Cycle Calculating the ROI Examples of Savings Connectivity � What�s the Vehicle to Cross the Mountain? Using the Train � The Clearinghouse Using the Truck � Driving Yourself Up the Mountain Reaching the Peaks of the Mountain Next Steps

4. The HIPAA Transactions � A Mountain of Opportunity? Getting Started: Looking Up from the Bottom Compliance Mindset: Another government mandated regulation to adhere to Convert production as quickly as possible No ROI, the quick and dirty (Just get it done.) Beyond Compliance: Evaluate current processes Implement best practices Opportunity to standardize within the organization Strategic initiatives for improvements, analyzing your current revenue cycle

5. Getting Started: Looking Up from the Bottom, Continued� Internally: Conducting Gap Analyses � Operational and IT Reviewing current processes and procedures Getting individuals involved External: Learn from other health organizations when possible Talk to payers regarding their readiness

6. Determining the Possible Peaks of Return � What to Analyze Internal Software purchase (capital or operations dollars) Software install (internal staff or contracted) Software testing (internal staff or contracted) End user training (internal staff or contracted) Coordination (internal staff or contracted) Calculating the possible ROI

7. Determining the Possible Peaks of Return � What to Analyze, Continued� Measurements that Matter Turn-around time Acceptance rate Time spent on claim edits Clearinghouse cost per claim Hold days Overall average cost per claim

8. Determining the Possible Peaks of Return � An Example of a Revenue Cycle Process

9. The HIPAA Transactions � A Mountain of Opportunity? Aurora�s Revenue Cycle One of the top strategic initiatives at Aurora Revenue Cycle Steering Committee: Updates sent to the Board of Directors Revenue Cycle Department Contracting EDI Coordinator Business Office Personnel Assists with Denial Management Strategy: Create a �virtual� repository to improve the overall revenue cycle process

10. Determining the Possible Peaks of Return � Improving the Revenue Cycle Process

11. Determining the Possible Peaks of Return � Calculating the ROI Types of Savings � Improvements in these areas help create ROI: Staff Savings: Moving to Automation # of FTEs x Hourly Costs x Paid Hours x % of Time x 30-60% = Potential ROI Number of FTEs working on these processes today (Both front end and back end processes when applicable � Registration, Insurance Verification, Billing Areas, etc�) Hourly costs (Benefits/hourly or salary) Paid hours (Per Year) Percentage of Time spent on the processes or reworking 30-60% of Estimated Savings: This is the targeted improvement rate that organizations decide is their goal for ROI.

12. Determining the Possible Peaks of Return � Calculating the ROI Types of Savings � Continued� Write Off Reduction Write Off $s x Collection Rate x 30-60% = Potential ROI Dollars associated with claims written off due to inaccurate information in a year Collection rate 30-60% of Estimated Savings: This is the targeted improvement rate that organizations decide is their goal for ROI.

13. Determining the Possible Peaks of Return � Calculating the ROI Types of Savings � Continued� One-Time Reduction in A/R Savings Comparing the Clean Claims days vs. the Rework Claims Days Clean claims typically from health plans average 25 days Evaluating the cash flow possible improvement Multiple by the target improvement rate

14. Determining the Possible Peaks of Return � Examples of Savings1 (Info based on 350-bed hospital)

15. Determining the Possible Peaks of Return � Examples of Savings1 (Info based on 350-bed hospital)

16. Determining the Possible Peaks of Return � Examples of Savings1 (Info based on 350-bed hospital)

17. Using the Train � The Clearinghouse Advantages One train can drop off various transactions at the appropriate �stops� Editing/scrubbing services Some have GUI modules to be able to fix transactions or view them. The train staff can support multiple passengers (Providers, Health Plans and other Clearinghouses): development, training and payer related issues Transaction/maintenance fees Disadvantages Transaction/maintenance fees Difficult to track and resolve issues if there are multiple connections It can be difficult to get the train staffs attention due to the number of passengers.

18. Using the Truck � Driving Yourself Up the Mountain Advantages Decreasing the lag time with the number of stops. Improve the volume of clean claims Improved relationship with Health Plans Able to track the issues and transactions better Disadvantages Upfront investment into the vehicle May take time to purchase the vehicle to drive yourself On-going maintenance costs May need a �mechanic� to keep the truck running smoothly (IT/IS)

19. A Balance of Options May not implement only one means of transportation. Based on transaction needs Based on costs When direct might make sense: Larger or high volume payers electronically: 80/20 Rule If your only option is to receiving the transaction directly. If PMS has editing system built within. If there is a front-end transaction management piece. Organization has the EDI expertise to handle the transactions.

20. Reaching the Peaks � Next Steps Creating the Strategy Measuring the ROI � Evaluation of the current revenue cycle Involving the Parties Executive Buy-In Process/cultural changes: Migrate from manual to automated Implementing the changes

21. Any Questions???