OhioHealth MAP Experience and Denial Management Case Study

1. OhioHealth MAP Experienceand Denial Management Case Study NE Ohio HFMA “March Madness” Chapter Education March 15, 2012 Independence, Ohio

2. Agenda • OhioHealth HFMA MAP Award Experience • OhioHealth’s Revenue Cycle journey to success • OhioHealth Denial Management Case Study

3. MAP Award

4. MAP Award What is the MAP Award? • The MAP Award, first given in 2009, previously was known as HFMA’s High Performance in Revenue Cycle Award. • MAP stands for measure performance, applyevidence-based strategies for improvement, perform to the highest standards in today’s challenging healthcare environment.

5. MAP Award How are the winners chosen? • The award recognizes healthcare organizations that are distinctive, innovative, and effective in revenue cycle process improvements, as well as sustainable financial performance that serves the mission of the organization. • The criteria are based on HFMA’s MAP Keys—revenue cycle key performance indicators.

6. MAP Award Who is eligible? • All acute-care hospitals are eligible. • The award is hospital specific, so you must apply as an individual hospital, rather than as a hospital system. • To be eligible, an executive leader in your organization must be a member of HFMA. • The application process for the 2012 MAP Award will end February 29, 2012.

7. MAP Award • OhioHealth Riverside Methodist Hospital MAP Award Winner June 2010 (FY10 Ending 12/31/09) • Highlighted MAP Keys:

8. OhioHealth Success

9. OhioHealth’s Revenue Cycle Journey to SuccessFY08 to FY11 Net Days In Accounts Receivable

10. OhioHealth Revenue Cycle MetricsFY08 to FY11

11. OhioHealth Revenue Cycle MetricsFY08 to FY11 Actual Write-Offs

12. How are Revenue Cycle results achieved? • Leadership Support (Culture): • Provides foundation for success • Recognizes importance of revenue cycle • Invests in necessary resources • Alignment of 3 critical areas: • People: Exceptional leadership and staff • Processes: Passion for continuous process improvement • Technology: Optimization of technology

13. Who are the People? Internal Revenue Cycle Team Revenue Cycle Operations Supports 6 Hospitals and Multiple Physician Practices

14. Who are the People? • External Revenue Cycle Partners • Medicaid Eligibility Vendors • Patient Statement Vendor • Transcription Vendor • Denial Appeal Vendor • Bad Debt Collection/Legal Collections Vendors • Retro HCAP/Charity Vendor • ROI Vendor • EDI Vendor

15. What are the processes? Patient Access Services Scheduling Final Claim Resolution Pre-Registration Bad Debt and Charity Insurance Verification Appeal Process Denial Management Notification Patient Cash Collections Pre-Certification Registration Statement Generation Payment Posting POS Collections Third Party Follow-Up Financial Counseling Claim Submission Health Information Management Claim Editing Claim Generation Charge Description Master Maintenance Patient Financial Services Charge Capture Enterprise Master Patient Index Clinical Document Management Coding Failed Claim Process Release of Information ROI Dictation/Transcription Electronic Medical Record Management

16. What are the processes? Denial Write-Offs FY09 to FY11 $18M to $6.5M .44% to .13% of GPR FY10 AHIQA Installed Over 400 Registration Edits Patient Access Services Final Claim Resolution Scheduling FY06 to FY11 $0M to $13M Point of Service Collections FY09 to FY11 Online Bill Pay $0M to $5.4M Pre-Registration Bad Debt and Charity Insurance Verification Appeal Process FY11 IVR Credit Card Payments $2M Denial Management Notification Patient Cash Collections Pre-Certification Registration Statement Generation FY09 to FY11 Automation of Cash Posting 80% to 95% FY11 Converted 27% ($114M) Self Pay to Medicaid Gross Rev Payment Posting POS Collections Third Party Follow-Up Financial Counseling Claim Submission FY07 to FY11 70% to 85% Clean Claim Rate FY11 Implemented Computer Assisted Coding Health Information Management Claim Editing Claim Generation Charge Description Master Maintenance Patient Financial Services FY11 Outsourced Transcription to Single Vendor FY08 Reduced Chart Delinquency from 16% to 3% Average Monthly Discharges Charge Capture Enterprise Master Patient Index FY07/08 Improved Chart Availability for Coding-3 days to 24 hrs Clinical Document Management Coding Failed Claim Process Release of Information ROI Dictation/Transcription Electronic Medical Record Management

17. What is the technology? • Over 20 different systems are used to streamline effectiveness and efficiency throughout Revenue Cycle • Patient Access: • Scheduling System • Imaging System • ABN/Medical Necessity System • Insurance Verification • QA System • Patient Price Estimator Tool • Electronic Forms Management System • Core HIS • Health Information Management: • Coding Edit System • HIM Imaging System • EMPI Integrity System • Encoder • RAC Software • Computer Assisted Coding • Core HIS • Patient Accounting: • Claim Editing/Transmission System • AR Follow-Up System • Denial Management System • Imaging System • Credit Card/Check System • On-Line Bill Pay • Dialer/IVR Phone System • Banking/Lockbox Technology • Cash Posting Automation • Core HIS

18. Success = Fusion of People, Process and Technology Net Days In Accounts Receivable (FY08 to FY11) FY11 FY09 FY10 FY08 FY07 • AthenaNet Reinstall • FormFast • Horizon Business Folder • Grady Electronic Medical Record Conversion • OHMSF relocation to Preserve • Deployed staff accountability scorecards • Insourced Patient Collections • Centralized coding staff • Enterprise Form Committee • Reengineered Denial Management • Opening of Dublin Hospital • Cash posting automation • OHMSF Credentialing System • QMS AR Management Tool • RevRunner Eligibility • Horizon Patient Folder • Automated coding workflow • Patient Compass • Rev Cycle move to Preserve • Revenue Cycle newsletter • Expanded Rev Cycle IT Support • POS Collections • Medicaid Batch Identification • Initiate EMPI system • Installed Graphic User Interface • Developed Project Management Team • Developed Revenue Cycle Financial Reporting Team • Reengineered bad debt collections • Charge Capture Audit Program • OHMSF acquisitions • OHMSF technical billing • MedQuist renegotiated contract • Established monthly operational payer meetings • Expanded charity care guidelines • Grady Revenue Cycle integration • Opening of Westerville Med Center • AHIQA • ePremis claim system • Developed RAC Team • Grady CBO and Scheduling transition to Preserve • Continued centralization of Patient Access Services • Outsourced denial appeal process • Redesigned payer scorecards • On-line patient payment tool • Reengineered call center dialer campaign • System-wide denial reduction initiative • Computer Assisted Coding • IVR patient payments • Grady Healthworks • Relocation of HIM/RAC to Doctors • OHNC integration • Reference lab billing integration • CDM Redesign Initiative • Hardin MedQuist • Nelsonville Rev Cycle integration • Standardization of transcription services (White=Technology, Black=People,Green=Process)

19. Key Revenue Cycle Strategies • Patient Collections: • Strategy: Decrease bad debt, manage charity care and increase patient cash collections • Enhanced Medicaid Eligibility Program (Conversion of Self Pay to Medicaid) • Implemented in-house self pay collections program • Implemented point of service cash collection program • Enhanced Charity/HCAP Program • Expanded patient payment tools (call center, on-line, and IVR) • Reengineered bad debt collection process • Insurance Collections: • Strategy: Strengthen payer accountability for contractual responsibilities • Payer scorecards • Payer monthly and quarterly meetings • Team effort between Revenue Cycle and Managed Care departments • Contract language supports Revenue Cycle and continues to change as needs evolve • Development of aggressive denial management program

20. Key Revenue Cycle Strategies • Technology: • Strategy: Optimize the use of technology to streamline processes and to manage costs • Fully dedicated Revenue Cycle Application IT dept • Implemented new systems and automated hundreds of processes • Standardization of applications across Revenue Cycle • Human Resource Capital: • Strategy: Immerse Revenue Cycle with talented leadership, staff and vendors • Deployed staff accountability • Strengthened vendor partnerships • Trained and developed a skilled and talented workforce (ongoing) • Established Right Choice Award Program • Improved Associate Opinion Survey • Developed Revenue Cycle newsletter

21. Case Study: How OhioHealth used the MAP Strategy to Reduce Denials

22. “MAP” Strategy on Denials • Defining and identifying payer denials (Measure) • Reducing payer denials (Apply) • Achieving results (Perform)

23. Defining and Identifying Payer Denials(Measure)

24. Definitions • What is a payer denial or delay? • Payment was expected by the service provider but was not received from the payer. Additional action must be taken by the provider in order to receive payment from payer. Additional action does not always guarantee payment. • Initial Denial: • Pre-action initial denial • Final Denial: • Post action final write-off i.e. claim has been appealed and denial upheld by payer • Payer Delay: • Request for information before payment can be received from payer

25. Denial Examples Payer Denials: • No authorization • No notification • No pre-cert • Not medically necessary • Pre-existing condition • Experimental • Non-covered • General technical billing errors i.e. Incorrect subscriber ID, missing info on UB format, etc… • Timely filing • Benefits exhausted • Out of network

26. Delay Examples Payer Delays: • Medical record request • Itemized statement request • Coordination of benefits to determine primary payer vs secondary payer

27. Identify • Critical step towards resolution • Quantification of data tells story and changes behavior; first step is to identify and then quantify • Very complicated but can be achieved • Manual identification • Electronic identification

28. Manual Identification • Posting from paper remittance advice/explanation of benefits (EOB) • Identification through follow-up process • Inefficient and ineffective • Opportunity for error

29. Electronic Identification HIPAA: • The Health Insurance Portability and Accountability Act (HIPAA) was passed on August 21, 1996. Among other things, it included rules covering administrative simplification, including making healthcare delivery more efficient. Portability of medical coverage for pre-existing conditions was a key provision of the act as was defining the underwriting process for group medical coverage. It also provided standardization of electronic transmittal of billing and claims information. • October 16, 2003 - Implementation of initial ANSI standards associated with the HIPAA law Note: • “Administrative Simplification” • Standardization has taken too long and still has a long way to go!

30. ANSI 835 • HIPAA proposed, in part, to standardize and privatize the electronic exchange of information between providers and payers. • ANSI 835 is the American National Standards Institutes (ANSI) Health Care Claims Payment and Remittances Advice Format. This format outlines the first all electronic standard for health care claims. The format handles health care claims in a way that follows HIPAA regulations. Prior to the creation and implementation of 835, there were hundreds of different electronic remittance formats in use. HIPAA requires the use of 835 or an equivalent. • ANSI, ANSI, ANSI…… Linking ANSI Standards to Denial management

31. ANSI 835 CAS Codes • Over 200 Claim Adjustment Reason Codes (CARC) • Ex. – 1-Deduct amt; 51 Non-covered/pre-existing • Over 800 Remittance Advice Remark Codes (RARC) • Ex. – N47 – Claim conflicts with another inpt stay; N-50 – Claim missing discharge info • Claim Adjustment Groups (CAG) • Ex. – CO-Contractual obligations; PI- Payer initiated reductions

32. Health Information System CARC/CAG Mapping Table • Develop team to review and map CARC and Claim Adjustment Groups • Team to include members from payer follow-up, remittance posting, and IT • Update Health Information System mapping table • Continue to monitor as payers change codes • Future changes-Stakeholder signoff from both payer follow-up and remittance posting leadership • Some payers use codes differently therefore create master table and then subset for unique payer usage • Keep in close communication with payer EDI department/contacts for changes or updates to codes

33. Internal Mapping Table-Example

34. Initial Denial Identification • Categorize initial denials and develop work flow for resolution • Example: “CO-197 NPRE Lack of Pre-cert/Auth” – route to clinical appeal team for action • Develop separate Financial Class for pending appeals and monitor, i.e. medical necessity and pre-cert/auth denials

35. Final Denial Identification • Create specific denial write-off codes • Write-off gross $ charges (vs expected reimbursement) • Track everything even if unclear if “contractual vs denial” • Do not write off to generic administrative adjustment code or to general contractual • Be able to slice by patient type, service location, payer, etc... • Example Specific Denial Write-Off Codes • Medicare Medical Necessity: Radiology, Lab, Heart Services, Behavioral Health, Pharmacy, Cardiac, Endo, and Other • No Medicaid Sterilization Form • Managed Care Medical Necessity • No Pre-cert/Authorization • Untimely Retraction by Payer • Payer Non-covered

36. Reducing Payer Denials(Apply)

37. Reducing Denials • Quantify and Communicate • Leadership and Associate Accountability • Payer Accountability • Process Improvement

38. Quantify and Communicate • Data is powerful and can change behavior!!!!! • Awareness is key critical • Quantify initial and final denials by denial codes and write-off adjustments; both # accounts and total gross charges • Distribute denial reports weekly/monthly to key stakeholders via email to stakeholders and include CFOs, Directors of Finance, Controllers, Revenue Cycle Leadership, Clinical Dept Leadership • Example Case Management to receive all Inpatient No Auth/Medical Necessity Denials, Pre-cert team to receive missing Pre-cert Denials, Business Office to receive all timely filing denials • Transparency-Include all stakeholders on same email • Educate/train stakeholders how to use and interpret the data • Develop hospital/health system teams with stakeholders from various departments • Ongoing

39. Quantify and Communicate • Critical to identify and monitor both Initial Denials Pended in AR and Final Denial Write-Offs (Balance Sheet and P/L) • Possible issue if write-offs are down but pended denials in AR are extremely high (not working denials efficiently and effectively?) • Possible issue if write-offs are up and pended denials in AR are extremely low (writing off denials too soon before all efforts are exhausted?)

40. Leadership and Associate Accountability • Incorporate target reductions into joint senior leadership accountabilities; example CFO and VP Revenue Cycle • Incorporate target reductions into all levels of leadership in Revenue Cycle Management (Patient Access, Health Information Management and Business Office), applicable clinical areas and Case Management • Incorporate target reductions into associate level accountabilities • Overall target reduction for health system as a whole not individual hospitals • Target to be established by using external benchmarks or historical hospital/health system data • Industry standard Denials Write-Offs 2-4% of Gross Revenue (Source Unknown)

41. Payer Accountability • Payer Performance Review and Communication: • Comparative data by payer • Denial rates • Types of denials • Overturn rates • Appeal turn around time • Average days to pay • AR Aging • # and $ Outstanding appeals over X days old • # and $ Outstanding overturn denials over X days old

42. Payer Accountability • Quarterly Meetings: Members to include stakeholders from Scheduling, Pre-cert, Pre-Registration, Business Office, Managed Care, Case Management and Payer • Weekly/Monthly Operational Meetings to escalate claims, process issues, etc…. • Clearly understand payer escalation process (get it in writing) and do not take “no” for an answer • Payer contract language • Hospital Managed Care Team and Business Office-critical relationship/must support each other

43. Process ImprovementExamples • Managed Care Inpatient Authorization/Medical Necessity • Managed Care Outpatient Pre-cert/Medical Necessity • Timely Filing Denials • Medicare Outpatient Medical Necessity Denials

44. Process Improvement • Managed Care Inpatient Authorization/Medical Necessity: • Inpatient notification process: fax, email, website, AUTOMATE (ANSI 278) • Inpatient case management clinical review submitted to payer • Complete payer/provider authorization process prior to discharge • Include authorization or reference # on UB • Ensure discharge date is communicated to payer if required during clinical review process (this will delay payment) • Level of care denials-observation vs inpatient • Continued stay denials • Appeal all denials • Centralized Appeal Team-Internal/External • Submit clinical documentation support for admission • Peer to Peer Physician review if necessary

45. Process Improvement • Managed Care Outpatient Pre cert/Medical Necessity: • Require pre-cert for all elective scheduled procedures • Develop a pre-cert physician liaison team • Order should support “Reason for Test” • Use payers to assist with enforcing policy with physician offices; provide list of physician offices for follow-up • Educate physician offices on payer required pre cert process and how to document “reason for test” • Provide physician offices with payer training “tool kit” • Establish process for Radiology dept to notify Pre-cert dept if original ordered procedure is changed; necessary to obtain pre cert for revised procedure • Centralized Appeal Team-Internal/External • Appeal all denials • Submit clinical documentation for reason for test; obtain from ordering physician office

46. Process Improvement • Timely Filing Denials: • Payers have time limits for claim submission; typically 12 months • Payers have time limits for appeals • Develop payer matrix of time limits for staff and appeal team • Critical to obtain correct insurance info the first time during registration process • Implement real time registration QA system including scoring and grade assignment by registrar; incorporate into QA and staff evaluation process • Address delays and denials timely • Develop internal escalation policy for claim follow-up team • Payer retractions; if past timely filing-appeal • Coordination of benefits-get patient involved

47. Process Improvement • Medicare Outpatient Medical Necessity: • Advanced Beneficiary Notice (ABN) process; CMS regulation to notify patient prior to service if service might be non-covered due to lack of medical necessity; provider cannot bill patient for non-covered service unless ABN signed by patient prior to service; GA modifier must be included on HCPCS code of non-covered procedure if ABN obtained • ABN software system • ABN screening at time of scheduling, registration and backend claim edit system • Follow-up with physician office for applicable diagnosis “Reason for Test” if data fails screening and is non-covered

48. Process Improvement • Medicare Outpatient Medical Necessity: (Continued) • Very complicated process; however, brings discipline to obtain diagnosis to support “Reason for Test” • Medical Records to code “Reason for Test” not just result of test • Medical Record “second review” process • Emergency Room; ABN is typically not allowed due to EMTALA however opportunity to review protocol and improve documentation • Focus initial process improvement on high $ write-offs i.e. Radiology • Remember to track write-offs by specific service area (radiology, cardiology, pharmacy, lab, rehab and other

49. Results (Perform) • OhioHealth reduced denials from .44% ($18M) of Gross Revenue FY09 to .13% Gross Revenue FY11 ($6.5M)-Over $11.5M in Reduced Denial Write-Offs • OhioHealth recognized in Modern Healthcare January 31, 2011 “No Denying the Problem” • OhioHealth 2010 Prism Award Finalist-Cross Functional System Denial Team

50. Conclusion Use MAP Strategy to Achieve Results • Measure performance • Apply evidence-based strategies for improvement • Perform to the highest standards in today’s challenging healthcare environment