In Fiscal Year 2014, patient access leaders at Bakersfield, CA-based Kern Medical Center reduced the billed accounts receivable (A/R) from $82,000 to $56,000. “And we didn’t simply write off the A/R,” reports Susan Labow, interim executive director of revenue cycle.
In addition, says Labow, “We doubled our cash flow from September 2013 to September 2014, with 40% less staff, and reached a record high of cash collections.”
To reach this accomplishment, Labow assessed all of the hospital’s registration functions in the emergency department, inpatient, and surgical settings. These changes were made:
• The department instituted mandatory securing of authorizations during the scheduling process.
“This reduced the amount of services rendered without authorization,” says Labow.
• A process was developed to clean up a large backlog of surgery authorizations from case management.
“Once cleaned up, it was incorporated into the regular pre-registration flow. We moved this responsibility to Patient Access Services,” says Labow. Patient access secures the authorization, validates eligibility, and resolves the patient’s liability, all before the patient’s arrival.
• A pre-registration process was implemented, to be completed five days prior to surgery, including authorization, insurance benefits, and patient liability resolution.
“Patient access absorbed responsibility for all registration and authorization processes for diagnostic services,” says Labow. “This was formerly handled by the hospital’s clinics.”
• Job functions were re-aligned in patient financial services.
A decision was made to outsource Medicare follow-up and commercial claim submissions. “Revenue is 75% Medi-Cal, 8% Medicare, 10% managed care and commercial, and 7% self-pay,” says Labow. FTEs were reduced from 27 to 14, including two supervisors, with employees assigned to these areas:
— One FTE handles commercial insurance follow-up.
— One FTE handles underpayment review and payer escalation efforts.
— One FTE processes and resolves state Medi-Cal revenue.
— One FTE processes state-sponsored Medi-Cal Managed Care revenue.
— Two FTEs handle hard copy claims and attachments, and they handle requests from attorneys for records and itemized bills.
— One FTE is the hospital liaison between self-pay vendor and hospital.
— Five FTEs perform payment processing.
“We outsourced self-pay to pro-actively contact patients, eliminate mail return, and resolve debt,” says Labow.
The department’s claims editing vendor (MDX/MAX II, manufactured by Long Beach, CA-based Medical Data Exchange) resubmitted all Medi-Cal accounts that had not been paid due to inefficient edits by the hospital’s previous claims editing vendor. “We developed numerous edits and programing with MDX to increase clean claim percentage and decrease the need for manual intervention,” says Labow.
Because state programs have a very low reimbursement, it is not cost-effective for staff to work on these claims, she explains. “Medi-Cal and Medicare claims are now generated, submitted, and paid without human intervention,” says Labow.
On the other hand, commercial claims continue to require follow-up even if patient access submits a clean claim. “That’s where you have to focus your staff efforts: dialing for dollars,” says Labow.