Considerations for Reporting Accounts Receivable

1. Considerations for ReportingAccounts Receivable UBO Working Group November 16, 2006

2. What do we have to do? • We must begin to report Accounts Receivable! • We must report the Accounts Receivable in various ‘segments’ • TPC • MSA • MAC • We are asked to utilize GAAP measurements • 0 to 30; 31 to 60; 61 to 90; 91 to 120; 121 to 180; over 180 • We need to establish criteria and definitions and be held accountable for reporting appropriately

3. Definitions from HARA • Receivable: Refers to either the total or a portion of a patient’s account, which represents uncollected revenue for the facility. • Receivables aging: The number of days receivables age from the point of discharge to the time the open account is closed. • Gross days revenue outstanding (GDRO) or Days in Accounts Receivable: A calculation used to compare the cash flow and level of receivables between healthcare organizations. GDRO is calculated by determining gross revenue during a given period divided by the number of days in that period. This figure is then divided into the total accounts receivable. (Do not subtract contractual allowances)

4. Inpatient TPC Sample Methods

5. Sample Methodologies

6. TPC Calculations • GDRO for FY 2006 • Begin Aging Process for Inpatients after “35” days • Begin Aging Process for Outpatients after “15” days • Begin Aging Process for APV after “15” days Fiscal YearCFY Plus PY2 • First Quarter 56.8 days 130.4 • Second Quarter 68.4 104.7 • Third Quarter 70.9 110.8 • Fourth Quarter 88.6 128.0

7. MSA Process • MSA is basically the inter-agency billings. • Typically, the MTF creates the bill from the encounter • Navy example – Bill is forwarded to “central” • No accounts receivable at the MTF level, but • Accounts receivable needs to be maintained • “Central” must maintain the accounts receivable • Standardization in maintaining A/R needs to be established across the Services • Monthly reporting to the UBO

8. MAC Accounts Receivable • MAC claims consist of liabilities that are determined by JAG to be billable and collectible. • Overview of Process: • Maintain Injury Log for all patients associated with a liability incident • Maintain ‘episode of care’ data for each patient to include the fullness of care associated with this specific patient • Send copy of Injury Log to JAG regularly to allow JAG to have the appropriate information and response time to identify the MAC claims • Upon completion of care, MTF generates bill(s) and send to JAG • MTF needs to maintain A/R while JAG is striving to resolve the claim

9. MAC Accounts Receivable • Tasking to design and develop a database management tool to accomplish the collection and maintenance of Accounts Receivable for MAC patients. • Database built in Microsoft ACCESS data management tool in order provide a simple, effective and powerful tool. • The definition of Accounts Receivable for MAC claims is that aging begins with the generation of the claim and sending the claim information to JAG.

10. MAC Accounts Receivable • Database management system will allow for the entry of all patient demographic and insurance data • DMS will further allow for the collection of clinical information directly associated with the full episode of care • DMS will assist with the management of accounts receivable through date generation criteria • DMS will document the interaction with JAG staff and action dates • DMS will generate a flat file for the printing of bill forms • DMS will further generate a series of reports ranging from an inventory report of the full database to an aging report of claims submitted to JAG • Requirement: a voluntary group of staff (3) from the Services to work with Altarum to design and develop this new system.

11. Reporting Accounts Receivable • Overall Comments: • Will this MAC tool benefit the field and support AR reporting? • Navy – Yes • Army – Yes • AF – Yes • Names of volunteers due by Dec 1 to Rob Borchert • Robert.Borchert@altarum.org • Assistants for the design/development of the DMS MAC billing.