Building a Revenue Cycle Vendor Management Program Presenters: Leah Klinke – Director Patient Financial Services, WVU Healthcare Nicholas Fricano – President, Healthfuse September 26, 2014
Jan 04, 2016
Building a Revenue Cycle Vendor Management
ProgramPresenters:
Leah Klinke – Director Patient Financial Services, WVU Healthcare
Nicholas Fricano – President, Healthfuse
September 26, 2014
“If you chase 2 rabbits…you will not catch either one”
– Russian Proverb
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Background
• Big shoes to fill
• Growing list of projects – EPIC upgrade, meaningful use, business office consolidation, etc
• “Tightening of the belt” – cost savings initiatives and revenue recovery goals
• Shifted more to external partners to “share the load” (and the risk)
• Required more from our vendor partners; management is a 2-way street
• Focus was required achieve goals in a timely and efficient way (doing it the right way)
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WVUH Trend Similar to Industry* – Spending More (on third-parties) and Getting Less (rising cost to collect)
Percentage of Revenue Cycle Operating Budget Spent on Third-
Parties
Cost to Collect (Headcount, Technology, Third-Party
Spend/Outsourcing)
* Healthfuse statistics as of January 2012 – based on combination of collected data and surveys from 983 health systems
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Our Top 5 Challenges:
• Patient complaints or compliance issues
• Over invoicing or high fees in general
• Sub-par performance (and functionality) or limited visibility into performance
• Mistakes requiring our time to resolve (e.g. inventory reconciliation)
• Limited vendor interaction or limited vendor understanding of our goals and day to day operations
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#1 – Developed Vendor Portfolio
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#2 – Formed a Vendor Management Office (VMO)
• Manager – dedicated leader for all things revenue cycle vendors – evaluating current partnerships, new partnerships, etc. Liaison between WVUH RCM leadership and vendor
• Analysts – dedicated team responsible for tracking and monitoring outcomes, evaluating trends regarding outcomes and activities, developing business cases for change, and conducting market research
• Auditors – dedicated team responsible for auditing accounts and determining root causes of errors – manual audits and technology-enabled audits
• Legal – full time resource is not required. Contract renegotiations required
• IT – full time resource is not required. We generated reports and customized a technology to enable macro-auditing, streamline reporting, and reconcile invoices and inventories
#3 – Developed Outcome-Based ScorecardsNet Liquidation Comparison
KPITarge
tActua
l
Gross liquidation % on balances > $5,000 12.5% 9.5%
Gross liquidation % on balances < $200 48% 45%
Median number of payments per patient 0.5 0.3
Average payments by patient $113 $56
Median age of first payment - BAI 54 63
Median age of first payment - PSP 93 94
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#5 – And Set Goals
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#4 – Developed Activity-Based Scorecards (Audit)
KPITarge
tActual
Median # of phone attempts – first 120 9 3
Median contacts per patient 0.7 0.2
Median statements per patient 4 4
Median day of first contact 41 78
Median age of account placement 32 56
Vendor compliance to SLAs 85% 47%
#5 – And Set Goals
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#6 – Monthly Reconciliations
-Invoices
-Inventories
#7 – Consistent Operating Rhythm & Governance
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#8 – Coaching & Remediation
Common Findings
• SLA and compliance discrepancies
• Improper balance adjustments
• Incorrect patient demographic information
• Mismanagement of automated workflow tools
• Unanswered requests for the application and/or release of account holds
• Insufficient tracking of defaulted payment plans
• Inadequate documentation of account notes
Common Improvements
• Refined inventory and transaction reconciliation to correct balance discrepancies
• Revised system logic used to apply automatic f/up based on manually applied acct dispositions
• Honed tracking of FA and CC apps
• Elevated accounts in need of supervisory review - weekly
• Shortened response requests for the app and/or release of acct holds
• Augmented utilization of skip tracing protocols
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• Invoice issues – 100% audits (and across vendors)
• Accounts not worked to SLA or industry standards. SLA compliance was 8% - 100% account audit (tech-enabled) and manual review of exceptions; compliance is over 95% today
• Outdated contracts; old terms – vendor getting paid, but not receiving or working accounts – renegotiated contracts
• Tools not used but being paid for – discontinued contracts
• Addressed RFPs (underpay, TPL, BD) that were sitting on desk for 6 months – dedicated resource to coordinate entire process
High Impact Efforts (Areas of Focus) – First 180 Days
“Barry Bonds doesn’t step up to the plate thinking home run. He
steps up to the plate focused on a sweet swing”
– Jim Camp (renowned expert negotiator)
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Managing the Fundamentals is Key…
“Success demands singleness of purpose”
– Vince Lombardi
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But Since It’s Football Season…
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Questions?
For Additional Information:
Leah Klinke
304.598.4198
Nick Fricano
414.988.1136