Brian Patterson Chargemaster Coordinator University Hospital Augusta, GA

1. Brian Patterson Chargemaster Coordinator University Hospital Augusta, GA How University Hospital Reduced Revenue Leakage: Keys to Optimizing Pricing & Charge Capture Laura Gilmour Senior Territory Sales Manager Craneware, Inc. Atlanta, GA

2. Objectives Outline strategies & factors for modern revenue management processes Realize keys to establish collaboration between clinical, HIM & financial teams for consistent, accurate charge capture across departments Identify revenue leakage gaps in revenue management processes & documentation Define systematic revenue improvement processes & prioritize focus areas for sustained revenue management

3. Augusta, Georgia 150 miles east of Atlanta 2nd oldest & 2nd largest city (est. 1736) Masters Golf Tournament World’s Largest Ironman 70.3 triathlon Godfather of Soul

4. University Health Care System • Augusta, Georgia • 195k+ residents in the city • 500k+ residents in metro area • 116th largest city in the US

5. University Health Care System • University Hospital - Augusta • University Hospital - McDuffie • University Home Health • University Extended Care • Brandon Wilde Retirement Community • University Health Link PHO • Community clinics & satellite campuses • Surgery & Imaging centers

6. University Hospital University Health Care System is anchored on its main campus by 581-bed acute care University Hospital.

7. University Hospital Facts 581 bed not-for-profit 50 bed ED with 76,000+ annual visits 36 OB suites with 3,000+ births annually Serve a 25-county region in GA & SC Programs Cardiac & Vascular Center Oncology Services Breast Health Center Women’s Center Satellite Medical Centers

8. The Finance Headache • Denials • Lower Reimbursement Rates • RACS • Incorrect CPT/ICD-9 • Bill Errors

9. Modern Revenue Management: Transparency Importance to Prevent Revenue Leakage • Potential for significant revenue leakage exists in complex & manual processes

10. Modern Revenue Management: Transparency Importance to Prevent Revenue Leakage • Identify disconnects causing missed charges & denials • Address disconnects by improving processes, documentation & ongoing education

11. Modern Revenue Management: Pick the right person to lead revenue integrity • Clinical background • Finance background

12. Establishing Collaboration & Workflow • Shared workflow facilitates communication & accountability

13. Establishing Collaboration & Training • Process review – determine ownership of key functions • Validate preliminary reports with root cause analysis • Recommend ongoing process improvements

14. Collaboration & Training • Clinical accountability • Preparation • Set expectations early & reinforce • Tools • Huddle • Process to report variance • In-person meetings • CFO & clinical leadership at meeting

15. Collaboration • Clinical departments • Subject matter experts with current information • Charge or Revenue Champion • Documentation • Access to software • Aware of changes - services & physicians • Daily reconciliation

16. Collaboration • Clinical teams need to feel ownership • Charging is the most successful when you have a partnership between clinical & billing applications • Chargemaster Management: • Increases productivity • Ensures compliance • Enhances revenue • Reduces errors

17. Collaboration & Charge Design – CDM Matrix • Lessons learned • Multiple applications + multiple service lines • Clear ownership = “go-to” person

18. Collaboration & Training • Lessons learned • Provider participation

19. Common Causes of Revenue Leakage • Lack of synch & integration between info systems • Inefficient operations causing increased labor • Missed charges • Lack of data transparency & believable data • No defensible pricing strategy (reflection of cost, market share & sustainability) • Mismatched units of measure purchased/dispensed • Inaccurate CPT/HCPCS codes, modifiers, & revenue codes in the chargemaster • Physician preference & device vendor pricing

20. CDM Management / Clean-up • Why do it? • Optimal & compliant reimbursement • Mitigate risks as RACs escalate • Preparation for projects & partnerships • Medical Necessity

21. CDM Management / Clean-up • Why use tools? • Automate review of each chargemaster line-item, flag potential problems & organize by priority • Receive routine delivery of Web-based updates – regulatory rules & coding logic for your CDM • Strengthen accountability for the organization with updates & audit trails • Maintain a sustainable business process beyond an individual’s best efforts & experience

22. CDM Management / Clean-up • Why use tools? (cont’d) • Demonstrate a defensible system for compliance education across entire charge capture team • Assign coding modifiers & benchmark prices against payer’s fee schedules & competitors • Reconcile pharmacy & supplies purchases with billing • CDM changes can be immediately implemented • Increases productivity • Speeds up maintenance • Immediate optimization • Direct communication with the department head • New charges easily established

23. CDM Management / Clean-up Automated CDM maintenance is vital for success • Before automation, CDM was maintained using MS Excel • Each line-item had to be reviewed individually to ensure accuracy • CPT, HCPCS, & revenue codes had to be compared to the corresponding manual • Year-end updates were labor intensive • Addendum B had to be downloaded & compared to the MS Excel CDM • CDM maintenance always took longer than expected & sometimes took a back seat to other issues • Lack of maintenance increases compliance risks • CDM optimization never happened due to resource limitations • Lack of optimization resulted in loss of payments

24. CDM Management / Clean-up • Full pull of Current CDM • Mapping of charges based on departments • Dollar value of charges based on APC rates • Lessons learned • Review with department managers • Tricky scenarios • Pre-consolidation clean-up

25. CDM Management / Clean-up $ Results: Automated chargemaster solution quickly optimized CDM Compliance risks reduced by immediate identification Revenue increased & payments enhanced $1.5 million in additional net payments were identified in 2006 55 radiology charges were identified as being priced below the 2006 Medicare APC.

26. CDM Management / Clean-up • Is the CDM clean? • Few or no items with zero volume • Descriptions match AMA short description • All CPT/HCPCS are current • Rev codes are appropriate for CPT/HCPCS &/or location of service • Multipliers are correct • No/minimal line items with modifier -59 hard-coded

27. Pricing Optimization • Value Proposition • Ensure market competitiveness • Verify pricing policy compliance • Ongoing review of pricing • Routine pricing review is integral to strategic pricing initiatives • Quickly identify when cost exceeds charge • Compare charges to defined pricing algorithms

28. Pricing Optimization • Start identifying: • All charges below fee schedule • All charges not within benchmark range for overall CDM & five selected department • Inconsistent pricing of same service in the CDM • Review when pricing is: • Significantly below policy price • Below policy price • Above policy price • Significantly above policy price

29. Proactive Internal Assessments • Coding • Accurate HCPCS code assignment vital to reimbursement • Codable analysis • Assess if correct HCPCS codes are assigned to currently coded items • Assess which items lack a required HCPCS code • Revenue Cycle data analysis • Bi-weekly graph package review • Managed Care Organizations’ negotiations • Continually ensure accurate & maximized reimbursement • Ensure CMS compliance

30. Creating a Revenue Integrity Program Monthly • Data analysis • Coding issues • Pricing issues • Volume reconciliation issues • Department process review • Understanding procurement to delivery to charge process • Root cause analysis of issues discovered through data analysis • Assignment of ownership of issues • Action plan for resolution with frequent check ins

31. Compliance - Avoid RAC • Medical Necessity • LCD’s & NCD’s • CMS Edits • CPT Code Updates/Flags • Catch compliance updates • Stay on top of AR & Billing

32. Summary Improving Financial Performance in Revenue Cycle • Define processes for systematic revenue improvement & prioritize focus areas for ongoing revenue management • Identify revenue leakage gaps in financial management processes • Implement controls & technology into revenue management processes

33. The Revenue Integrity Survival Guide

34. Questions & Answers