This proposal could reduce significant losses in revenue cycle

The below proposal was submitted by John E. Kivimaki, director of patient accounts at Mary Rutan Hospital in Bellefontaine, OH, to identify areas in the revenue cycle where losses could be reduced by focusing on upfront efforts. It was accepted by the hospital's administration, and implementation is underway.

REVENUE IMPACT ANALYSIS

The following ROI is based on increasing our per patient upfront settlement average to $10. This is a very conservative estimate. Once implemented across our facility, our minimum monthly return on investment is $42,500 monthly or $510,000 annually.

CURRENT STATE: Baseline for Analysis

FUTURE STATE OPPORTUNITY: Front End Impact

FRONT END BEST PRACTICE

CURRENT SITUATION

Healthcare management system

Automated

Insurance Verification

Automated

Address Validation

No automated address validation technology in place: exposure to returned mail costs and denied claims, which slows revenue recognition

Capacity to Pay

No capacity to pay technology in place: hard to apply discounting policies according to patient's ability to pay and hard to apply charity policies consistently leading to compliance exposure

Business Rules and Policies

Business rules and policies in place today: no technology to automate the application of those business rules and policies across all patient accounts

Charity Policies & Guidelines

Charity policy in place today

Red Flag Rule Compliancy

Red Flag process in place today: no automated Red Flag compliancy technology in place to ensure process is followed and to provide reports if audited by the FTC

Price Transparency

No automated price transparency technology in place today

Payment Plan Development

No payment plan negotiation technology in place today leading to longer revenue cycle and reduced net patient revenues

Promissory Notes

No automated promissory note development technology in place

Front End Collections

Limited front-end collections capability: averaging $2 per registration today

FRONT END BEST PRACTICE

CURRENT SITUATION

Healthcare management system

Automated, but searching for a new one.

One proposed system can interface with current and future system. Will only charge for first interface, second one is on the house once system chosen

Insurance Verification

Next-generation and simplified insurance verification tool included with proposed system.

Address Validation

Real-time address validation, which verifies address provided is actual U.S. address and validating the patient is associated with the address via web resources available

Reduces returned mail, reduces denied claims and identifies potential fraud (FTC Red Flag compliancy)

Capacity to Pay

Real-time capacity to pay determination based on non-credit scoring, web-based data utilizing over 57 resources

Rates patient based on the market and provides insight into the patient's capacity to pay via both income and net worth criteria

Business Rules and Policies

Automated business rules and discounting policies, provides a script to the registrar telling them exactly how to process every patient based on their capacity to pay and based on if they are insured, uninsured or charity

Reduces registration time, provides process consistency across all patient accounts and limits exposure to lawsuits

Charity Policies & Guidelines

Automated charity policy process, determines if patient qualifies based on household income and federal poverty guidelines, and provides appropriate forms in a web format for completion on the spot

Red Flag Rule Compliancy

Automated Red Flag rule compliancy ensuring hospital is compliant with FTC Red Flag rules

Price Transparency

Automated price transparency built into the system based on your most common procedures

Provides a balance to negotiate and settle on with patients before they leave the hospital, accelerates the revenue cycle

Payment Plan Development

Payment plan calculator built in, providing a tool to negotiate payment plan with patient based on associated discounts and balance

Provides ability to settle patient balance before patient leaves the hospital

Promissory Notes

Automated promissory note developed, which includes balance, payments and negotiated terms

Front-End Collections

Clients average $35 in cash collected and $100 in terms negotiated per registration leading to incredible front-end collections.

Improves cash on hand (improving bond rating and ensuring compliancy with bond covenants), improves net patient revenues and reduces bad debt

Summary

Based on a detail examination of a number of areas, a conservative estimate of between $250,000 to $500,000 a year would be saved by using the software.

Source: John E. Kivimaki