Team approach produces dramatic reduction in denials
Collaboration depends on atmosphere of trust’
As the newly hired patient financial services director at St. Helena Hospital in Deer Park, CA, Kim Meredith was ready to put her focus on reducing the institution’s denial rate. Looking at some of the reasons for those denials, Meredith says, she knew she would need help — from her colleagues in admitting to address demographic and authorization problems, from medical records to correct diagnosis and coding errors, and from case management to target denials related to concurrent review. The challenge, she realized, lay in convincing those departments to join together to embrace the denial reduction quest without finger-pointing or airing dirty laundry.
Typically, Meredith knew, "directors don’t want others involved in what I call their backyard,’" she says. "No department runs perfectly. Why do I want admitting [personnel], for example, looking at my backyard when I might have incorrect processes?" Keeping that in mind, the CAMP team (the acronym was created from the first letter of each department’s name) was born, Meredith adds, with the initial emphasis on developing interpersonal relationships and creating an atmosphere of trust. "We had an informal meeting once a month to find out what was going on," she says. "We talked about things like, What’s happening in your department? Two people are out sick. Cash collections are looking good.’"
Meredith describes this phase of the collaboration as "zero to six months — like the infant stage," and she emphasizes that it was crucial to the effort’s ultimate success. "Once we were comfortable that no one was trying to butt into another person’s department, we started problem solving," she says.
To create a common goal, something that every employee of all the CAMP departments could work toward, Meredith notes, she came up with a bonus structure based on exceeding net patient revenue. She then presented it to the CAMP team, and ultimately received the blessing of hospital administration.
The minimum bonus that each person receives if the hospital exceeds the net patient revenue goal is $25, and the amount increases according to how far above the goal collections go. "Money motivates people," she says. "A lot of people say it doesn’t. But I have to tell you, from this example, it does. We have been extremely successful."
The figures speak for themselves. Since November 2001, when CAMP started, hospital collections have increased dramatically, Meredith explains. "In 2002, we collected $14 million more than in 2001; in 2003, we collected $8.7 million more than in 2002; and for 2004, as of May, we collected $5 million more than during the same period last year."
For a 181-bed hospital with a combined annual operating budget of $2 million for the admitting and patient financial services departments, she adds, "that’s a pretty significant amount." The denial rate, meanwhile, is down to less than 1%, from a previous high of about 5%, she says, and accounts receivable (AR) days have been reduced from about 67 to 48.
"The whole concentrated focus of CAMP," notes admitting director Peggy O’Neill, "is assigning the denials to the appropriate CAMP party, which works until it resolves the root problem." The results speak for themselves, she adds, citing one recent month in which $800,000 in potential write-offs was reduced to $50,000 through the team’s efforts. (See chart.)
Actual Denials vs. Potential Write-Offs, 2003 (in Dollars)
O’Neill and her staff have "played a significant role" in those statistics, Meredith reports. St. Helena has placed at the top of Adventist Health’s 20 hospitals in over-the-counter (OTC) cash collections for the past two years and has been recognized for overall process improvement. "Because [admitting] was so successful with upfront collections," Meredith adds, "it has reduced the cost on the back end. We don’t have to bill patients — with the additional expense of mailing statements — and our accounts receivable [AR] days are down because those self-pay dollars aren’t sitting out there."
"There are no territorial walls that impede our working together," O’Neill says of the CAMP collaboration. "This group of departments maintains a highly developed communication network. We are all part of one constantly evolving improvement process."
The CAMP team, which includes directors and supervisors from each of the four departments and the hospital controller, meets on the last Wednesday of every month, Meredith says. "What we’ve done is establish a common playing ground," she adds, "and to get to where we want to be, we [ask], What are the internal problems in CAMP?’ and What are the external issues?’"
To increase efficiency and camaraderie, Meredith notes, the team developed a shared drive on the computer system that allows everyone in the four departments immediate access to "the information we’re tracking and logging, including denials, resource utilization group [RUG] rates, and daily cash." The monitoring of "daily cash," meaning the amount of revenue coming in, shows the CAMP employees where they stand in terms of exceeding the net patient revenue goal, she adds. "We can see how much we collect every day, and how close we are to our goal."
Representatives from other departments occasionally attend the CAMP meetings, Meredith says. "We have invited other departments because it’s important to find out, for example, why a department is having a problem with charge entry, and to ask, What can we do to help you get your charges correct, or to get the correct demographics?’"
The hospital is unable to bill Medicare for services provided at its transitional care unit (TCU), for example, until the unit provides patient financial services with what is called a "RUG analysis," she points out. "It’s a complicated form that they complete and from that, they give us the RUG rate. It takes 60 days to bill Medicare for that service. In the meantime, the patient goes to another facility and exhausts his or her skilled nursing benefits under Medicare, which results in the hospital not being paid at all, she explains. "We invited the TCU director in to talk about why they’re having such difficulty giving this information to patient financial services."
Explaining the financial engine’
CAMP has taken the initiative in providing "financial engine information" to clinical staff, Meredith says. "A nurse has no idea how charges, CPT codes, or billing happens. We go out and do education for nurses so they’ll understand how this works."
In the monthly CAMP meetings, the team looks at "items to target and areas to look at," she adds. "We talk about what to focus on next. What are the different areas we need to help improve their cash position; outline a game plan? Maybe it’s the emergency department."
If that’s the case, the director might be invited to sit in on a CAMP meeting, Meredith says. If there is a need for staff education, team members may go to the outside department in question. "We conduct training classes for the departments that do charge entry," she notes. "We talk about how to know if you’ve made a mistake. If we see that physical therapy is struggling with putting in the correct date of service, we ask them if they want to be in their environment or come to us [to get help]."
Any or all of the CAMP team members may get involved in these endeavors, depending on the issue, Meredith says. "We all take an active role, but 70% of the education is provided by patient financial services and admitting. It’s easier for us to identify issues with other departments because we can manipulate our computer system to see that information very easily and extrapolate variances to target areas of concern."
Time to celebrate
When the CAMP departments exceed the net patient revenue goal, she adds, "it’s important that we celebrate as a group and extend an invitation to the outside departments we’ve worked with. When we resolved the issue with the TCU, we invited the director and whoever helped her resolve the problem."
In 2003, there were nine months of success, and so there were nine celebrations, Meredith says. As of June, CAMP already has had five successful months in 2004, and has celebrated each of those. The celebrations have run the gamut, from ice cream socials where old movies were shown to exotic lunches, she adds. "They’ve mostly centered around food."
"It’s also very important to note that these celebrations cost the hospital very little financially," she points out. "There’s a grill that we keep here, and I buy $50 worth of hot dogs and hamburgers, and we roll the grill down the hill from my office to the hospital."
One department might be responsible for bringing desserts, while another contributes salads or covered dishes, Meredith adds. "It might be a Hawaiian luau, or have a baseball theme. We just did "Around the World," with seven different continents represented. Staff walked through a kind of maze to different areas to pick up food." The celebrations are important, she reiterates, because they reinforce the teamwork concept. "We work together, we celebrate together."
As the newly hired patient financial services director at St. Helena Hospital in Deer Park, CA, Kim Meredith was ready to put her focus on reducing the institutions denial rate.
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