Hospital Billing and Patient Experience (Part 2)

As we discussed in part one of this series, healthcare billing can often create problems and this can have a negative impact on a patient’s overall experience.

So, everyone hospital’s overall goal should be to make patient payment easier.

Here are some ideas to help facilitate this:

  • Give patients multiple methods of payment (“71% of consumers saying that being offered multiple ways to pay increases their satisfaction” (Fiserv, “Eighth Annual Billing Household Survey, Fiserv Inc., 2016))
  • Set up automatic payments and save credit card information for recurring bills.
  • Consolidate multiple charges for the same visit into one bill.
  • Use electronic/digital communication/billing whenever possible to speed up the process.
  • Create online, user-friendly, customizable platforms to view and pay EOBs/bills.
  • Offer multiple options to pay bills over extended periods of time.
  • Offer discounts for paying early (even at time of service) or paying with cash.
  • Educate staff on how to discuss payments with patients.
  • Allow/offer the option of patients paying prior to service or while they are still on site.
  • Know how much you are spending on debt collection and cut your losses when needed. Only $15.77 of every $100 is recovered once debt goes to collections. (https://nationallist.blog/2016/10/13/medical-debt-collection-difficulties/)

These solutions can help make bills less confusing, relieve patients’ financial burdens, and help hospitals reduce bad debt by seeing more bills paid and by seeing bills get paid sooner.

Improve your organization’s financial performance AND increase patient satisfaction by giving patients transparency and control, while simplifying the payment process. Click To Tweet

Hospital Billing and Patient Experience (Part 1)

Organizations must change the way they approach the patient financial experience.

Why?

Healthcare billing can often create problems and tarnish the overall patient experience. Click To Tweet

There are a few major reasons for this:

  • Patients are bearing the responsibility of a larger portion of their healthcare bills.
  • Patients can’t afford to pay large hospital bills, at least not all at once.
  • Healthcare billing is often confusing.

Here are a few quotes from Becker Hospital Review’s whitepaper:

  • “As more patients enroll in health plans with high out-of-pocket costs, provider organizations must shift their focus to ensure patients are at the center of their revenue cycle strategy. Hospitals and health systems that fail to make this transition may see their patient experience scores and finances suffer.”
  • “Patients are now responsible for more than a quarter of healthcare revenue and are the fastest growing payer.”
  • “An analysis of 400,000 claims by The Advisory Board confirmed that the greater a patient’s deductible, the less likely he or she is to pay the owed amount, irrespective of his or her income level.”
  • “Healthcare payments are a uniquely complex multi-party ecosystem, and the numerous bills and benefits statements patients receive after hospital visits confuse them. Patients often choose not to pay the bills because they are unsure of the amount they owe, even after comparing invoices from providers and statements from insurers over an extended period of time.”

And, here are a few more important statistics that shed some light on healthcare billing and its relation to patient experience:

  • “Research from the Deloitte Center for Health Solutions shows that hospitals with better patient experiences perform better financially and there is a positive correlation between patient experience and clinical quality measures.”
  • Research from InstaMed reveals that 72% of consumers preferred electronic payment for their healthcare bills. Yet in 2015, 87% of consumers received paper medical bills from their providers.” (Trends in Healthcare Payments Sixth Annual Report: 2015)
  • Patient satisfaction ratings can fall by an average of more than 30% after discharge because of the billing process, according to a 2015 survey by the Hospital Consumer Assessment of Healthcare Providers and Systems

The overall solution requires making patient payment easier. So, how can a hospital accomplish this?

We’ll cover some practical steps in the next edition of this series.

5 Important Steps To Optimize Reimbursement For Your High-Cost Pharmaceuticals & Laboratory Testing

What are the important steps to optimize reimbursement for your high-cost pharmaceuticals and laboratory testing?

Here are five keys:

1. Document and code. Verify that prescribing physicians have adequately documented the order in the patient chart and that the medical records department recognizes the order and uses the ICD-10 procedure code.

2. Review managed care contracts. Review your managed care contracts in depth of top payers for specific clauses pertaining to high-cost pharmaceuticals and high-cost lab testing. If these clauses exist, identify the payer’s coding requirements.

3. Audit your Chargemaster quarterly. Capture and code and all charges associated with high-cost pharmaceuticals and lab tests. Ensure that all the appropriate codes are identified and entered into the Chargemaster with the correct pricing.

4. Develop a managed care contract strategy. Negotiate special provisions in your managed care contracts for high-cost pharmaceuticals, orphan drugs and lab testing. Four types of contract-provisional clauses that apply to most high-cost drugs and lab tests include: trailer claims, carve-outs, cost outliers, and stop-loss thresholds.

5. Map your managed care reimbursements to actual payments. To ensure manage care contracted reimbursement, compare actual payments to specified agreement terms.

Many times managed care payments miss the high-cost drug payments and this is a lost revenue opportunity for hospitals. Click To Tweet

Call VIE Healthcare to schedule a call to learn how your hospital can implement best practices in high-cost drug revenue optimization at 1-888-484-3332 ext 501 or email me at lmiller@viehealthcare.com.

Tips to Improve Your Hospital Utilization Process for Lucrative Cost Savings (Part 3)

We’re concluding our series on improving your hospital utilization process. If you haven’t already, be sure to read part one and part two.

Take Stock of Your Pharmaceuticals

Biologics extend to pharmaceuticals, although most drugs are chemically synthesized. In either case, it’s been our experience that most drug doses are just thrown away. Although pharmaceuticals are probably the most audited of all, with outside and internal agencies constantly tracking financials, compliance and operations, line-by-line audits of utilization are not common practice.

You’ll need to spend a significant amount of time analyzing your hospital’s utilization data. Click To Tweet

Inspect Outpatient Testing Interpretation

Sometimes outpatient testing results are entered incorrectly into a medical records system, which means the wrong price was charged to the insurance company, or Medicare, and will quite possibly end in retesting of the entire procedure altogether. Also, outpatient coding guidelines contain different information than inpatient guidelines. The challenge is knowing when to use the proper codes. This is why understanding outpatient testing interpretation is key to properly analyzing your hospital’s utilization trends.

Regulate Medical Waste and Excessive Pickup Fees

Many times medical waste and excessive pickup fees are 30% of the overall costs that hospitals just pay because no one is taking the time to check every invoice line item. By reviewing every invoice line item and asking questions about ambiguous charges, you will start to find opportunities for cost savings. If excessive fees are normally 30% of overall costs, then there is already a good chance of a 30% cost savings.

Examine Telecom Services

Telecommunication services is one of the six major hospital purchased services spends, but to manage those costs you must first perform a historical analysis and purchased services contract review. This will not only reveal pricing errors and credits due back to your hospital, but it also reveals utilization trends that greatly affect your telecom costs.

Measuring your hospital’s utilization trends for cost reduction opportunities is tough, and you’ll need an army dedicated to your supply chain department to achieve it. There are so many other factors involved as well, like variations and quality, that affect your purchased services spend. You will need to outsource a lot of the work to an independent group that has the clinical expertise, among other specializations, and experience to do the job right. You’ll want to work with a company like VIE Healthcare.

VIE Healthcare’s expert analysts use comprehensive data to identify trends in your top 50 most utilized supply costs by department. Our system involves proven processes to find cost-savings opportunities. We’ve helped hospitals proactively manage their monthly outsourced purchased services spend since 1999 and now our Invoice ROI™ technology will do the exact same thing for you in real-time. Call our office today at 1-888-484-3332 ext. 500 to schedule a call with founder and CEO Lisa Miller, a healthcare margin improvement expert.

Tips to Improve Your Hospital Utilization Process for Lucrative Cost Savings (Part 2)

We’re continuing our series on improving your hospital utilization process. For part one, click here.

Here’s our next set of tips for you to consider.

Compare High-Cost Implants with Implant Audits

Compare your costs to your services and contract terms. For instance, match the cost of your revision implants with the numbers on your implant audit. Determine if the appropriate charges were made for initial implants or were you billed for the higher cost of a revision implant instead? It would take clinical expertise in this area to compare and benchmark price points, including time and effort to analyze all the data in your monthly invoices and utilization records, line-by-line.

Equate Nitric Oxide Utilization Reviews with Operating Performance

Comparing your nitric oxide usage with operating performance is not much different than your other audits. You’ll want to make sure the amount of nitric oxide used appropriately matches your operating performance. Again, in order to do this properly and to effectively find cost savings, you’ll have to employ experts in this area who also have the time to review every detail of your utilization records.

Evaluate Dialysis Utilization

Hospital dialysis is super expensive these days and the majority of end-stage renal disease (ESRD) patients will continue to rely heavily on it until they find a matching donor, extracting a hefty chunk of out of your hospital’s resources.

Hospitals will need to find any reimbursement or discount advantage necessary to remain operational, and a detailed audit of your hospital’s dialysis utilization could do just that. Click To Tweet

An audit would reveal many cost-saving opportunities, such as extra fees charged for dialysis performed after 5 pm.

Examine Your Biologics

Just like any other clinical product, your biologics should be properly and regularly tracked. Inaccurate inventory results in overuse or understocked supplies. Last minute orders are costly and unnecessary if the materials were already in stock. Biologics are also much more complex and sensitive, which means mishandling and contamination are not easily recovered. Expertise in this area is crucial if you expect to properly review your biologics utilization in detail.

Enjoying these strategies? We have more coming your way. Stayed tuned for the final installment of this series.

Tips to Improve Your Hospital Utilization Process for Lucrative Cost Savings

Finding opportunities to reduce your hospital utilization costs brings major cost savings, but chances are your GPO or private consultant would rather not attempt it because it’s time-consuming and requires expertise in certain specialized areas. Despite the potential cost savings it adds to your hospital’s financial margins, not everyone is willing to dig that deep.

To find the real savings that often get overlooked, you’ll need a deep understanding of skilled areas, like clinical operations, to accurately interpret the data that you will also need to collect from different sources.

It’s not easy but if you’ve got the resources on site, here are some ways to improve your hospital utilization now.

Review Your Medical Gas Cylinder Utilization

Keeping track of your medical gas cylinders seems arbitrary to some GPOs and private consultants, but we know that tracking usage can significantly improve your bottom line. A hospital with numerous locations could easily lose track of usage and spend extra money ordering new supplies. Managing your cylinders gathers those lost dollars and ensures supplies are always available when they’re needed the most.

Audit Your Lost Linens

Lost linens are probably the most common hospital losses of all, especially for a large hospital losing linens on a regular basis. Statistics show that laundry costs eat 2% to 3% of your hospital budgets. With annual budget deadlines coming up, you’ll want to find cost-saving opportunities in this area to close this gap. Linen loss is a result of several factors, but unless there is a utilization audit procedure put in place, losses will continue to plague a hospital’s financial margins.

Assess Your IT Licensing

IT licensing is difficult to track since technology is constantly changing and IT contracts grow more complex every year. Vendors are always introducing new licensing models, maintenance options and audit clauses every day. Some of these come bundled with technology you may not even be using.

To watch your IT spend, you’ll need to review your contracts and technology usage regularly. Click To Tweet

You’ll also need to benchmark industry pricing options to make sure you’re paying the right price.

Match Bed Size Contracts with Bed Size Numbers

It goes without saying that the number of beds your hospital provides should match the number of beds you actually use. The best way to determine an accurate number is through a detailed analysis. You’ll want to make sure those numbers match up with the terms in your contract. You’ll also want to take other factors into consideration like minimum bed requirements and future growth expectations.

We’ll continue this series with further ideas and strategies. Stay tuned!

6 Steps to Optimize the Value of Your Outsourced Agreements

We’re concluding our series on ensuring quality and financial high performance from outsourced providers. In case you haven’t read them, here are parts one and two.

1. Have clear visibility to data, usage and the ability to understand costs easily. Research indicates that between 40% and 70% of outsourcing value may be lost due to unsustainable contract terms, incorrect pricing and poor relationship management. Understanding these factors, and their impact on revenue and value leakage over time, is absolutely essential to maximizing the value of an outsourcing partnership. Ensure your invoice is accurate, easily understandable and that there aren’t any issues with non-standard and convoluted pricing schemes that make your invoice difficult to validate.

2. Get feedback from the end-users. It’s important to have the insights from those who are working with your outsourced provider. Conduct quarterly performance reviews, quality surveys and an annual meeting with key end-users to understand how the outsourced provider is performing. Are there gaps? Are there issues that are not getting resolved? Are there opportunities for improvement? A well-designed feedback system will ensure a mutually successful outsourced partnership.

3. Expect that the outsourced provider is an extension of your organization and will be committed to cost improvement, process improvement, and revenue improvement. So many times when we review the services being provided to our clients and find out that there are “utilization” issues and we bring it to the attention of the outsourced provider—the provider says they are doing their job according to the agreement. We say, it’s your “job” to ensure utilization is optimized and costs are minimized. If you oversee laundry services, then you are responsible to deliver best in class services and standards in the industry per pound/patient day. If this exceeds the “norm” then it is the outsourced provider that must lead the charge to fix it.

4. Consider performance-based contracting arrangements. In a performance-based contract, the outsourced provider provides your hospital with specific benefits, such as cost reductions or revenue generation, and in return, the provider shares in the value created. A portion of the price of the contract is linked to a series of key performance indicators that the supplier is responsible for meeting and to business benefits achieved by your hospital through the fulfillment of the contract. Performance-based contracting agreements create an incentive for the provider to control its costs as these contracts align the interests of both parties. Performance-based contracts tend to encourage closer relationships with providers. Performance-based contracts should be implemented for projects with outcomes that can be measured objectively. Performance-based contracts can be used for any contract, including small-dollar-value contracts, but are generally most appropriate when:

• Projects are large, have new technology, or have high risks.

• Existing contracts can be converted to define as much of the requirements in performance-based terms as possible.

• Large umbrella contracts are experiencing cost overruns or performance problems.

• Benefits contributed by providers can be quantified.

• Project implementation and production time need to be reduced.

5. Never be afraid to benchmark. Either informally or formally; and during any time of your agreement. You have a right to know what the competitive marketplace is offering for services, prices, incentives and most importantly new ways of thinking – 16% to 30% can be financially gained when outsourced initiatives are benchmarked by VIE Healthcare.

6. Test-market the relationship — observe behaviors during a well-defined test phase, assuming that realistic tests can be devised and that necessary observations can be obtained, even if pre-contractual monitoring can only be done at a cost that could not be sustained during the contract. For the test to be meaningful, a certain level of environmental stability relative to the contract duration is required. Additionally, it must be possible to perform the test phase without massive irrecoverable investment from either party. Finally, the test must be reliable: it must be too expensive for either party to manipulate the test phase to influence the results, or there must be re-contracting intervals if the initial tests do not turn out to have been reliable.

Outsourced agreements are complex and have many moving parts in the agreement. Click To Tweet

It is difficult for departments to easily validate contract pricing to invoice pricing and the “promises” that were made initially when the agreement was signed. There is a lot of work on the front of putting together a high-performance outsourced agreement.

However, once that work is done, you have a system in place to ensure you are receiving the value for your investment into an outsourced provider. And remember, you don’t have to outsource an entire department or service line—“selective outsourcing” offers a way for your organization to outsource one aspect of a larger service.

However you choose to structure your outsourcing agreements, ensure you’re doing your due diligence in creating an arrangement that leads to success.

Outsourced Providers: Critical Questions and Key Activities

We’re continuing our series on ensuring quality and financial high-performance from outsourced providers. For part one, please click here.

Here are four critical questions that must be answered:

1. What should be outsourced and what services should be performed internally, within the hospital?

2. For those services that should be outsourced, how should the contract be structured?

3. For those services that should be outsourced, how should the contract be negotiated?

4. For those services that should be outsourced, how should the relationship be managed to ensure its continued strategic success? When will the relationship be terminated?

Whether you are in a current agreement with an outsourced provider, in the process of a contract renewal with your current provider or are analyzing the option of outsourcing – it all starts with understanding the needs of your organization and those needs do change over time.

Aspects of a needs assessment can include cost reduction, revenue improvement, and/or the lack of internal specialization. Click To Tweet

The key activities in a needs assessment include:

• Defining the business needs and key objectives.

• Benchmarking the current processes.

• Understanding the standard activities and service level measurements (“as-is”).

• Reviewing future state service delivery options (“to-be”).

• Assessing the gaps between the current and desired state.

• Assessing the feasibility of options & defining the strategy for service delivery alternatives (insource, nearshore, multi-shored delivery, combinations of, etc.).

• Investigating the implications of assessment.

• Validating the associated costs, cost savings, revenue and process improvements.

• Identifying risks, assumptions, dependencies, and creating a mitigation plan.

• Business case development and sponsor alignment.

Once you have a detailed analysis of what your organization “needs” then everything is built from there. Your contract, monthly, quarterly and annual measurements, the ability to ensure you will have best-in-class services provider, competitive pricing for those services as well as a system of accountability built into your agreement.

In the next part of this series, we’ll cover the steps to optimize the value of your outsourced agreements.

How to Ensure Quality and Financial High-Performance From Outsourced Providers

First and foremost an organization must understand why they want to outsource and what it is they are trying to accomplish through outsourcing.

Many organizations gloss over or skip this step entirely believing that they already have most of this information and/or a mandate to move forward with the project. That may very well be true – but to skip this step of due diligence is inviting disaster.

Not only is it critical to understand where the organization is today and where the organization is required to go in the future, but this is the time to begin tracking assumptions, dependencies and risks associated with the project along with appropriate mitigation strategies. Above all else, the senior leadership of the organization must be fully onboard with the effort. If executed properly, this step in the continuum may produce alternatives to outsourcing that are more efficient and cost-effective.

Activities that represent core competencies cannot be outsourced and non-core activities are candidates for outsourcing. Outsourcing decisions rarely fully examine the expected benefits, seldom fully understand the risks of outsourcing and the costs that these risks impose, and almost never are based on a sound trade-off of risks and benefits. That would imply that many poor outsourcing decisions are made. Risks include the risk of overpaying, the risk of damage to reputation resulting from inferior service, and risk of loss of control over vital assets.

Before an organization begins building an outsourcing framework it must first decide that outsourcing is a viable alternative and that all other options have been thoroughly reviewed. Click To Tweet

Outsourcing is complex and time-consuming to establish. There is no single approach to outsourcing that will guarantee success. Every situation is unique in one way or another. These unique elements are what keep clients, vendors and advisors up at night as no one can see into the future and anticipate every potential outsourcing challenge.

The key to success is preparation and experience. Just as a sports team would not walk onto the field of play without a meticulous playbook and a coach to lead them, nor should an organization that is contemplating outsourcing move out of ideation without an experienced outsourcing advisor and a strategy to ensure success.

The first requirement in building a strategy for success is to develop a framework that will guide the involved parties. This strategic framework for success must be based upon years of hands-on experience to avoid the obvious and customary crises and pitfalls. Also, the framework must be detailed enough to ensure stability and consistency yet flexible enough to be adaptable to the uniqueness of each client/vendor situation.

Here is a high-level five-step system for outsourcing: assessment, contracting, transformation, transition, and management of the outsourcing process.

These 5 steps provide a framework to ensure that all major phases and processes are addressed, and identify any gaps or missing processes that need to be included for proper planning of an outsourcing engagement.

In the next part in this series, we’ll cover critical questions you must answer prior to outsourcing and other key activities for success.

Late Start Times in Operating Rooms (Part 2)

In the first edition of the series, we covered several potential reasons that OR start times get delayed. Nobody likes to wait, and when ORs are consistently lagging behind schedule, it often leads to increases in cost and decreases in revenue.

But, every problem has a solution, And in the second part of this series, we’ll cover these solutions and provide actionable steps on multiple fronts to help your OR start on time and stay on schedule.

Solution:

  1. Identify the need for improvement. Discuss and show statistics/detailed analysis of the delays and the actual cost of delays.
  2. Align objectives of management and staff to create clear/common goals.
  3. Identify the specific causes of delays through discussion with a multidisciplinary team.
  4. Develop specific measures to address each cause with the multidisciplinary team.
  5. Evaluate/document effectiveness of each measure in improving first case start times.
  6. Monitor/adjust for improvement based on the percentage of first cases starting on time.

Process for Multidisciplinary Team:

  1. Take turns sharing what each member believes to be the causes for delays (narrow down to top 10).
  2. Take turns sharing what each member believes to be the measures needed to address delay (narrow down as well).
  3. Enforce, maintain, and document the effectiveness of each measure taken.

Approaches to motivation for improving first case start time:

  • Punitive – loss of allocated block time for surgeons.
  • Meetings/formal presentations to motivate employees.
  • Create task forces dedicated to ensuring on-time starts.
  • Calculate and convey the actual cost of OR delays.
  • Communicate the possibility of adding an extra case at end of the day for the surgeon.
  • Communicate the possibility of finishing earlier at the end of the day to staff.

It’s not just a “nice thing” to have your OR running on schedule. You can benefit from increased OR efficiency and productivity, a reduction of frustration in hospital employees, increased patient satisfaction, cost reductions, higher revenue and long-term sustainability and profitability.

It's a no-brainer. If your OR is lagging behind, be strategic about how you can get things running on schedule! Click To Tweet