KPIs: Metrics and Tools, How and Where to Benchmark · 5/19/2016 · SOURCE:BearingPoint, Key Performance Indicators. ... • Time Specific – “by the end of 2016” WVU Medicine

KPIs: Metrics and Tools, How and Where to Benchmark

May 19, 2016 Leah Klinke

Director, Patient Financial Services

Overview

•  WVU Medicine Revenue Cycle Overview •  Key Performance Indicator Purpose &

Development •  Sources of KPIs •  Meaningful Benchmarking •  Goal Achievement Strategies •  WVU Medicine Examples

Revenue Cycle •  3 facilities on EPIC with consolidated billing

operation in Morgantown, WV •  $2.28 billion in gross revenue •  $975 million in net revenue

•  4 facilities moving to EPIC from dispirit systems by the end of 2017 with decentralized billing operation •  $1.44 billion in gross revenue •  $576 million in net revenue

•  Patient access functions are decentralized in geography and management

PURPOSE & DEVELOPMENT Key Performance Indicators (KPIs)

What is a Key Performance Indicator?

•  Numerical factor •  Used to quantitatively measure performance

•  Activities, volumes, etc. •  Business processes •  Financial assets •  Functional groups •  The entire revenue cycle

SOURCE: BearingPoint, Key Performance Indicators

“In business, words are words, explanations are explanations, promises are promises, but only performance is reality.”

Harold S. Geneen Former President and CEO of ITT

Why KPIs?

•  View a snapshot of performance at an individual, group, department, hospital, or regional level

•  Assess the current situation and determine root causes of identified problem areas

•  Set goals, expectations, and financial incentives for any individual or group

•  Trend the performance of the selected individual or group over time

SOURCE:BearingPoint, Key Performance Indicators

Characteristics of a Quality KPI

•  Set SMART goals… ü Specific – Clear and Unambiguous ü Measurable – Quantitative vs. Qualitative ü Achievable – Stretch but Not Demotivating ü Relevant – Tie to Overall Goals or Mission ü Time Specific – Keep Focused!

“Count what is countable, measure what is measurable, and what is not measurable, make measurable”

Galileo Galilei

Make it Measurable…

Make it Measurable…

•  Qualitative measures are subjective and process oriented. Data and results are narrative. Data collection would include interviews and open ended questionnaires

•  Quantitative measures are objective and results oriented. Data and results are numeric. Data collection would include quality checklist or scaled questionnaires with numeric results.

Other Characteristics of a Quality KPI

ü Must communicate information and not just data ü Must encourage appropriate behavior

Must Communicate Information…

•  Goal should precede data collection process •  Understand what business question you are

trying to answer and work backwards to identify: •  the form the answers should take •  the analysis that can produce these answers •  the data that this analysis would require

SOURCE: Stacy Barr

Must Encourage Appropriate Behavior…

•  Do not want to create incentives for non-compliant activities

•  Can create measures that counter any inappropriate incentives (e.g. quantity of work AND quality of work measured)

SOURCES OF KPIs Key Performance Indicators (KPIs)

HFMA MAP Keys

•  MAP Keys are industry-standard metrics or KPIs used to track your organization's revenue cycle performance using objective, consistent calculations •  Specific Keys for Hospitals and Health Systems and

Physician Practice Management around… •  Patient Access •  Revenue Integrity •  Claims Adjudication •  Management

•  Pros – •  Comparable from organization to organization •  Based on month end/year end financials

•  Cons – •  Not always measurable in real time •  Results can be manipulated by changes in process

that do not truly increase or accelerate cash •  Recommendation -

•  A balanced approach using both benchmarkable month end results and interim reporting in real time

HFMA MAP Keys

HFMA MAP Keys Management Claims Adjudication Patient Access Revenue Integrity

Aged A/R as a Percentage of Billed A/R

Aged A/R as a Percent of Billed A/R by Payer Group

Conversion Rate of Uninsured Patient to Payer Source

Days in Total Discharged Not Final Billed (DNFB)

Bad Debt Clean Claims Rate Insurance Verification Rate Days in total Discharged Not Submitted to Payer (DNSP)

Case Mix Index Days in Final Billed Not Submitted to Payer (FBNS)

Point-of-Service (POS) Cash Collections

Late Charges as a Percentage of Total Charges

Cash Collection as a Percentage of Adjusted Net Patient Service Revenue

Denial Rate-Partial Pay Pre-Registration Rate Net Days in Credit Balance

Charity as a Percent of Uncompensated Care

Denial Write-Offs as a Percent of Net Revenue Service Authorization Rate

Charity Care Denial Rate-Zero Pay

Cost to Collect Denials Overturned by Appeal

Cost to Collect by Functional AreaNet Days in Accounts ReceivableTotal Uncompensated Care (New MAP Key, June 2014)Uninsured Discount (New MAP Key, June 2014)

www.hfma.org/Map/MapKeys/

Additional Resources

•  NAHAM Access Keys – Members only benefit •  Vendors may provide specific tracking metrics –

make sure you understand how they are calculated!

MEANINGFUL BENCHMARKING

Key Performance Indicators (KPIs)

Meaningful Benchmarking

•  Benchmarking is the process of comparing one's business processes and performance metrics to industry bests and best practices from other companies

•  How do we set our KPI thresholds? •  How do we know whether the KPI threshold is a

stretch or overstretch? •  When have we arrived?

SOURCE: Wikipedia

Meaningful Benchmarking

•  Internal Benchmarking – incremental improvement over historical achievement •  Where have we been historically? •  What can we learn from our historical trends? •  What can we do to influence the future results?

•  External Benchmarking – against industry best practices •  EPIC Financial Pulse •  HFMA MAP Initiative Benchmarking •  HFMA MAP Application process •  HFMA MAP App

HFMA’s Revenue Cycle Score www.hfma.org/MAP/MapAwards/

HFMA MAP Awards Winner Statistical Data

www.hfma.org/MAP/MapAwards/

GOAL ACHIEVEMENT STRATEGIES

Key Performance Indicators (KPIs)

Achievement Strategies

•  Now you have set a quality KPI goal set against a meaningful benchmark… are you done?

•  Watching your KPI move up or down is not enough… you need to actively move the number!


•  Trickle down goals •  Director may have a high level goal whose result is

influenced by a number of areas under his/her influence.

•  Managers would take sub-goals that help to achieve the Director’s overall goal, then supervisors, then staff


•  Regular reporting of results •  Scorecard or staff meeting updates to update all

engaged parties in the goal achievement •  Monitor other related keys to make sure that

focus in one area does not negatively impact other areas

•  Focus is important, so setting few focused and relevant goals and keeping team engaged for the entire measurement time period is important!


•  Break long term goals into shorter term steps •  For example, you may have a 5 year goal to win a

MAP award. •  Examine which pieces leave you the furthest from the

goal and set goals around improving that area in a shorter term (e.g. 1 year)

•  Set interim quarterly goals to achieve the 1 year goal. •  This allows team to stay focused and celebrate

interim step achievement!


•  "Anything is measurable in a way that is superior to not measuring it at all." —Tom DeMarco, co-author of Peopleware: Productive Projects

and Teams

•  Do not be intimidated by data collection or complicated scorecards. Look at what data you have now and start with that. Something is better than nothing even if it is not 100% externally benchmarkable or tested. It can be improved and refined over time if needed.

WVU MEDICINE EXAMPLES Key Performance Indicators (KPIs)

DAYS IN A/R & > 90 DAYS Example 1

WVU Medicine KPIs

•  Director Goal: A/R Days, excluding self pay, in-house, and credit balances (2013-2015) •  Specific – “Improve business office performance

measured by improvement of A/R days indicator from 31.5 to 29.5 days”

•  Measurable – data source: daily dashboard report •  Achievable – based on historical performance and

opportunity •  Relevant – ties to our core goal of timely billing •  Time Specific – “by the end of 2016”

WVU Medicine KPIs

•  Manager Goal: Aged A/R > 90 days (2015) •  Staff Goal: Aged A/R > 90 days by Payer group

WVU Medicine KPIs

Map Key: Net Days in Accounts Receivable Purpose: Trending indicator of overall A/R performance Value: Indicates revenue cycle efficiency Equation:

N: Net A/R D: Average daily net patient service revenue

•  We used a Days in A/R “Real Time” calculation = Total A/R (combination of net and gross)/ avg daily gross patient service revenue

Days in A/R “Real Time”

WVU Medicine KPIs

Map Key: Aged A/R as a Percentage of Billed A/R Purpose: Trending indicator of receivable collectability Value: Indicates revenue cycle's ability to liquidate A/R Equation:

N: >90, >120 days D: Total billed A/R

•  We used Aged A/R as a % of Discharged A/R – insurance only

Aged A/R > 90 Days

WVU Medicine KPIs

Map Key: Aged A/R as a Percentage of Billed A/R by Payer Group Purpose: Trending indicator of receivable collectability by payer group Value: Indicates revenue cycle's ability to liquidate A/R by payer group Equation:

N: Billed payer group by aging >90, >120 days D: Total billed A/R by payer group

•  We used discharged A/R > 90 days / Total discharged A/R for payer group

Aged A/R Change by Payer Group

Calculation of “Real Time” A/R Days and Aged A/R from ATB

FinancialClass Open 0to30 31to60 61to90 91to120 121to180 Over180 Totals

BilledAR>90Days(Numerator)

TotalBilledAR(Denominator)

%ofBilledAR>90DaysbyPayerGroup

Commercial $2,512,244 $9,776,649 $3,937,131 $2,951,925 $1,135,446 $1,294,156 $1,218,275 $22,825,826Medicare $7,811,683 $22,994,350 $4,802,322 $1,885,584 $912,780 $364,489 $925,459 $39,696,667Medicaid $7,807,277 $7,816,647 $4,625,953 $1,428,010 $628,759 $869,739 $1,181,199 $24,357,584Self-pay $970,064 $1,056,770 $719,476 $604,456 $118,543 $203,776 $381,063 $4,054,148Worker'sComp $11,887 $10,317 $0 ($2,226) $3,394 ($2,074) ($34,220) ($12,922)Other $0 $56,737 $78,505 $78,390 $16,645 $46,503 $104,548 $381,329BlueCross/BlueShield $2,256,570 $19,883,590 $7,900,933 $2,919,348 $1,293,775 $1,132,633 $244,209 $35,631,057 $2,670,617 $33,374,488 8.0%OtherGov't $554,267 $2,992,822 $1,775,713 $1,048,417 $546,349 $535,900 $542,098 $7,995,566PEIA $852,132 $5,086,164 $1,195,287 $380,650 $123,654 $88,269 $19,915 $7,746,070PEIAMC $113,996 $628,975 $331,091 $69,465 $9,062 $5,138 $217,597 $1,375,323MEDICAREADVANTAGE $2,950,524 $8,498,666 $1,872,058 $814,132 $351,729 $761,958 $1,085,095 $16,334,162MEDICAIDMC $12,765,948 $11,166,951 $3,091,200 $1,517,973 $1,531,897 $2,013,784 $1,223,592 $33,311,345PENDINGMEDICAID $14,090 $693,052 $706,462 $295,797 $26,091 $35,143 $24,789 $1,795,426Outsourced-Insurance $779,976 $4,583,853 $3,590,764 $1,568,478 $1,511,707 $1,893,022 $2,243,782 $16,171,582Outsourced-Self-pay $0 $370,249 $1,688,645 $2,218,059 $2,149,795 $2,209,736 $3,677,409 $12,313,892Undistributed $0 ($172,700) ($156,061) ($78,487) ($73,847) ($50,892) ($69,270) ($601,256)

Totals $39,400,658 $95,443,093 $36,159,478 $17,699,970 $10,285,778 $11,401,279 $12,985,542 $223,375,798 $34,672,599 $183,975,140 18.8%

TotalsWithoutSelfPay $38,416,504 $93,323,022 $33,044,895 $14,581,658 $7,991,349 $8,952,624 $8,902,281 $205,212,332 $25,846,254 $166,795,829 15.5%

90DayAverageDailyRevenue* $5,581,055

"RealTime"DaysinA/R-Fortrendingandinternalcomparisononly 40.0

*GrossRevenuefromlast3monthsoffinancials

A/R Days>90 Days Goal – Facility 1

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

20

25

30

35

40

45

Jan-

14

Feb-

14

Mar

-14

Apr

-14

May

-14

Jun-

14

Jul-1

4

Aug

-14

Sep

-14

Oct

-14

Nov

-14

Dec

-14

Jan-

15

Feb-

15

Mar

-15

Apr

-15

May

-15

Jun-

15

Jul-1

5

Aug

-15

Sep

-15

Oct

-15

Nov

-15

Dec

-15

AR Days Aged > 90 Days

Start of > 90 Day Reduction Initiative


5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

20.0

25.0

30.0

35.0

40.0

45.0

50.0

Jan-

14

Feb-

14

Mar

-14

Apr

-14

May

-14

Jun-

14

Jul-1

4

Aug

-14

Sep

-14

Oct

-14

Nov

-14

Dec

-14

Jan-

15

Feb-

15

Mar

-15

Apr

-15

May

-15

Jun-

15

Jul-1

5

Aug

-15

Sep

-15

Oct

-15

Nov

-15

Dec

-15




15.0%

16.0%

17.0%

18.0%

19.0%

20.0%

21.0%

22.0%

23.0%

24.0%

17.0

19.0

21.0

23.0

25.0

27.0

29.0

31.0

33.0

35.0

Jan-

14

Feb-

14

Mar

-14

Apr

-14

May

-14

Jun-

14

Jul-1

4

Aug

-14

Sep

-14

Oct

-14

Nov

-14

Dec

-14

Jan-

15

Feb-

15

Mar

-15

Apr

-15

May

-15

Jun-

15

Jul-1

5

Aug

-15

Sep

-15

Oct

-15

Nov

-15

Dec

-15



Coding/Outstanding Insurance – Facility 3

3.0

3.5

4.0

4.5

5.0

5.5

6.0

6.5

7.0

7.5

17.0

18.0

19.0

20.0

21.0

22.0

23.0

24.0

Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15

Uncoded Accounts Outstanding Insurance

COMPARING ACROSS FACILITIES ON DISPIRIT SYSTEMS

Example 2

“Everything must be made as simple as possible. But not simpler.”

Albert Einstein

Example – Total A/R Days

0.0

10.0

20.0

30.0

40.0

50.0

60.0

Facility1 Facility2 Facility3 Facility4 Facility5

AR Days

WVU Medicine KPIs

Net Days in Accounts Receivable •  Some facilities track this in real time using our daily dashboard •  System dashboard weekly and monthly •  Process differences between hospitals make comparison difficult –

breakdown by bucket helps with comparison Breakdown buckets by stage in billing process:

•  In house (undischarged patients) •  Uncoded accounts (not yet final coded by HIM) •  DNFB (discharged but not final billed in the system) •  FBNS (final billed in the system, but claim not yet submitted) •  Open Insurance AR (billed insurance AR not yet resolved) •  Open Self Pay AR (billed patient AR not yet resolved)

Example – Detailed A/R Days By Stage in Billing Process

0.0

10.0

20.0

30.0

40.0

50.0

60.0

Facility1 Facility2 Facility3 Facility4 Facility5

In House Uncoded DNFB FBNS Ins AR SP AR

Example – Detailed A/R Days By Aging

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

Facility1 Facility2 Facility3

Open 0-30 31-60 61-90 91-120 121-180 Over 180

Example – Detailed A/R Days By Aging (without Self Pay)

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

Facility1 Facility2 Facility3

Open 0-30 31-60 61-90 91-120 121-180 Over 180

Example Dashboard

Example Dashboard

WVU Medicine Sample KPIs Billing Vendor Management Patient Access

Days in AR (without self pay and credit balances)

Liquidation Rates (Early Out, Bad Debt)

ED Copay Collections

Aged AR > 90 Days (without self pay aged by discharge date)

Net Collections (Net of fees) and Placements

Patient Estimates Delivered

Denial Write Offs Conversion Rate (Medicaid Eligibility)

IMMs Delivered

Initial Denial Rate (New) Call Volume (Early Out) Authorizations Received (coming soon)

Claims with Open Denials Cost per Transaction (clearinghouse, billing edits)

Denials by owning area (coming soon)

Credit Balances

Claim Errors (Part of DNFB)

DNBs and Stop Bills (Part of DNFB)

FBNS

KPIs: Metrics and Tools, How and Where to Benchmark

Questions?

KPIs: Metrics and Tools, How and Where to Benchmark · 5/19/2016 · SOURCE:BearingPoint, Key Performance Indicators. ... • Time Specific – “by the end of 2016” WVU Medicine

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