This proposal could reduce significant losses in revenue cycle
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
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.Subscribe Now for Access
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