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Emergency Cash Management

Emergency Cash Management. Raymond Leadbetter Consultant – Appling Healthcare System. Emergency Cash Management – Step 1. Establish Current Cash position Create 6 month cash projection – Current cash in bank can misrepresent cash position Acknowledge your facility has a cash flow problem

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Emergency Cash Management

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  1. Emergency Cash Management Raymond Leadbetter Consultant – Appling Healthcare System

  2. Emergency Cash Management – Step 1 • Establish Current Cash position • Create 6 month cash projection – Current cash in bank can misrepresent cash position • Acknowledge your facility has a cash flow problem • Present accurate and timely facts and figures to the CEO, Board of Directors, Bank and Staff

  3. Cash projection –Things to take into consideration • Quarterly/Annual payments • Provider Taxes • Funding of DSH payments • Deposit of DSH and UPL payments • Balloon payments • Payroll Taxes • Benefits • Recurring monthly Invoices – Estimate

  4. Emergency Cash Management – Step 2 • Create immediate cash inflow • Go to Paper Checks – will buy facility up to one week of float • Flex down to 32 hour work week – Allows time to evaluate staffing levels • Freeze PTO • Freeze Retirement Match • Outsource Services when possible – (Dietary, House Keeping) – Generate loan of Labor, Benefits and Supplies for 45-60 days • Generate profit to allow new financing opportunities

  5. Emergency Cash Management – Step 2 Continued …. • Consider refinancing short term debt into long term debt • Evaluate equity in real estate – use as collateral • Approach County for potential Splost funding • Capital Acquisitions • Meaningful Use implementation • Present financial impact to the community if facility closes • Special Consideration for CAH • Analysis of conversion to PPS – Must have enough commercial to offset self pay and generate profit • Interim cost report to determine impact of cost cutting efforts and/or raising fee schedule – short term influx – which might create large pay back at cost report settlement

  6. Emergency Cash Management – • Cash flow – How to Improve • Accounts Receivable • Understand what is going on in the business office • Get out from behind the desk! • Create a billing team that meets regularly • Establish accountability among the collectors • Establish daily target of minimum claims to follow up on • Reporting of aged accounts by collector • Reporting of accounts in collector que • Review distribution of accounts between collectors • Regular reporting on status of accounts over 45 days since dos • Set expectations, goals and deadlines

  7. Sample Report of aging of claims assigned to collector

  8. Sample Report of claims in que - by collector

  9. Sample Report of claims assigned by collector

  10. Emergency Cash Management… Establish accountability with HIM department • Monitor non-coded claims • Monitor unbilled claims Submit claims electronically • Increase cash flow Insure proper tracking of denials • Quadex, Emdeon, etc • Maximize set-up of 835 capture • Capture denials automatically • Minimize posting errors

  11. Emergency Cash Management … • Evaluate Contracts with Insurances • Establish policy on elective procedures • Determine minimum upfront requirement to insure profitability • Maximize upfront collections • nTelagent • Create bonus/incentive plan for collectors

  12. Emergency Cash Management • Review all profit centers/service lines for profitability • Insure appropriate allocation of contractual adjustments • Do not utilize total system contractual percentage • Verify that individual profit center earnings total system wide earnings • Insure charges are coming across accurately onto patient bill from various modules • Develop relationship with local banks, banks will loan to profitable hospitals

  13. Emergency Cash Management – Productivity • Monitor volumes within each clinic/office • Record current volumes within each area • Establish minimum visits per day per physician • **Meet with the Board of Directors prior to implementing change** • Review staffing levels within each area • Talk with the staff – you will be amazed at the information that they tell you • Evaluation patient care hours within the Nursing Home – review state required hours of 2.5 • Make the difficult decisions that need to be made

  14. What to concentrate on in the immediate future ….. • Develop an environment of open communications with staff • Town Hall Meetings • Create weekly P&L projections • Share Financial information with the staff • Monitor Expenses within the facility • Acknowledge weaknesses of facility • Management of ER • Medical Screen out process • Admission ratio from ER • Think outside the box • Create network of hospitals • Outsource for under-utilized resources • Cost share for service lines that your facility will not support

  15. Questions- • Raymond Leadbetter • rayleadjr@yahoo.com • (207) 649 -6146

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