SCHFMA Annual Institute May 26 -29, 2015

Speaker Elizabeth Lamkin, MHA, ACHE May 27, 2015

Healthcare Environment Increasing regulatory requirements Transition from volume to value Population Health Value Based Purchasing

Quality/HCAHPS reporting and penalties

Readmission caps and penalties Billing audits and denials Changing reimbursement models, i.e. bundling, ACO Physician employment

Healthcare Environment

Inpatient Prospective Payment System (IPPS)/Outpatient Prospective Payment System (OPPS)

Meaningful use and Electronic Medical Record Pricing transparency (Hospitals and Physicians) ICD-10 Growth in Medicare as payer via aging population States opting out of Medicaid expansion Cuts in Medicare Hospitals closing

Caught in Transition CEOs are being challenged to change the

healthcare paradigm after many years in the current business model

While value based purchasing is the new buzz phrase - hospitals are still paid on volume

ACOs may be another way to describe market power

CEO Priorities and Challenges Financial Challenges Ranked No. 1

Healthcare Reform Implementation and

Government Mandates Tied for No. 2

Patient Safety and Quality Ranked No. 3

American College of Healthcare Executive (ACHE) 2014 CEO Survey: www.ache.org/PUBS/research/ceoissues.cfm

Top CEO Concerns 2014 ACHE Survey Deborah J. Bowen, President and CEO for ACHE commented: “Taking care of patients and improving patient safety and quality in their organizations is job No.1, but CEOs acknowledge they must do so in a climate of complex payment reform, dwindling reimbursement and government mandates.” www.ache.org/PUBS/research/ceoissues.cfm

ACHE CEO Priority Survey Results

Lower numbers represent higher priority

While Financial concerns remain the clear winner, all concerns have moved up in ranking with less spread between them. CEOs have to juggle more balls concurrently.

ACHE CEO Survey 2014

Breakdown of Finance Questions Requires

shift in cost structure

Require coordination and cooperation from all departments and medical staff. This is

more than ever a team sport.

Further margin erosion

Observation – National Trends 2006 2009 Percent Increase

OBS 828,353 1,131,236 27%

OBS > 48 hours 26,176 83,183 318%

OBS >72 hours 23,852 44,843 88%

1 Data from Centers for Medicare and Medicaid Services (CMS)

2006 2009 2010 2011 2012 OBS > 48 hours 1% 3% 5% 8% 11%

1

2 Percentage of total number of patients placed in Observation status

Number of Medicare observation patients has increased by 88 percent to 1.8 million in 2012.

Slide Courtesy of Hossain Marandi, M.D. Bay Care, Board Member American College of Physician Advisors

Between 2006 and 2011, there was a more than 400% increase in the number of patients in observation status for more than 48

Average Part A/B Difference Defines New Cost Structure

Slide Courtesy of Hossain Marandi, M.D. Bay Care, Board Member American College of Physician Advisors

Volume Performance

Source: CMS, “2013 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds,” May 31, 2013, available at: http://downloads.cms.gov/files/TR2013.pdf; Health Care Advisory Board interviews and analysis.

Medicare to Become Majority of Volume by 2022 Projected Number of

Medicare Beneficiaries

Millions of Beneficiaries

54.0

55.6

57.3

59.0

60.7

2014 2016 2018 2020 2022

16

Medicare Reimbursement Will Become the New Cost

Structure

CEOs Have to Manage Board Expectations

www.greatboards.org/newsletter/2015/greatboards...

Boards think

everything is a priority

CEOs feel financial pressure the most

Surprised regulatory scored this

low as Board

responsible for

compliance

Governing Board Responsibility Billing compliance starts at the top Billing compliance must be part of the Governing

Board overall compliance plan Must be part of the strategic plan C-suite responsible for implementation of strategy and

compliance

18

19

CEO and Board Responsible for Components of Sustainable Systems

Stru

ctur

e

Committee Structure as “Information Highway” Hospital Medical Staff

Organizational Structure (Organization Chart)

Hospital

Medical Staff

Information Technology Infrastructure & EMR Pr

oces

s

Board & Hospital Plans (Compliance, Quality, UM)

Committee Minutes

IT Use & Access to Data

Policies and Procedures

Key Performance Indicators (KPIs)

Monitoring and Reporting on KPIs

Feedback Loops to Staff and Providers

Education and Training

Human Resources & Evaluations

Peer Review

Peop

le

Staffing Levels

Staff Knowledge

Staff Training

Accountability

Culture

Continual Measurement and Accountability

Also, CEOs Get a Lot of Advise! Chuck Lauer, Former Publisher of Modern Healthcare

Advises CEO to: Step up and cope with change Take chances Break down silos Set the tone for the organization

CEOs Get a Lot of Advise! Chuck Lauer, Former Publisher of Modern Healthcare

Advises CEO to: Treat patients as customers Communicate with everyone Tolerate dissent Always be visible Reach out to community Be proud of healthcare

Complicated CEO-Physician Relations Physician

Doer Solution-oriented 1:1 Interaction Always “on” Decision-maker Autonomous Patient Advocate Professional Identification Immediate Gratification

http://cph.uiowa.edu/ruralhealthvalue/insights/Presentations/

MacKinney%20-%20Physician%20Allies A. Clinton MacKinney, MD, MS Accessed March 3, 2014

CEO Planner/Designer Process-oriented 1:Many Interaction Some down-time (changing) Delegator Collaborative Organization Advocate Organizational Identification Delayed Gratification

http://cph.uiowa.edu/ruralhealthvalue/insights/Presentations/MacKinney%20-%20Physician%20Allies A. Clinton MacKinney, MD, MS Accessed March 3, 2014

Result=Typical CEO Day

How Does This Relate to You? The CEO cannot do it all Remember top CEO issue

Financial Challenges As finance professional give the CEO an opportunity to

delegate to you Start with what you know:

Revenue Cycle Integrity to Protect Margins

What Can You Do? Do not let the organizational chart put you in silos Finance and clinical operations are dependent

upon each other Finance must have an active role in all major

committees (Quality, Utilization, RAC, Compliance)

View the organization from CEO perspective as a continuum

Organization Chart (Structure Where Power Resides)

Governing Board

Cheif of Staff CEO

Business Development

Officer

Physician Relations

CNO

Clinical Departments

COO

Ancillary Departments

Quality Officer

Clinical Quality

Patient Safety/Risk Infection Control Medical Staff

Support

Care Management

CFO

Patient Financial Services and Registration

Controller

Accounting

Health Information

Mgmt Systems

Physician Advisor

Human Resources

Compliance Officer

Governing Board

Medical Executive Committee

CEO Compliance Officer

Performance Improvement

Committee

Utilization Review

Committee (KPIs)

Chart Audit Committee

Hospital Departments

(KPIs)

Executive Team

Finance

Compliance Committee

Revenue Cycle Team

RAC Committee

Formal reporting structure Lines of team collaboration, e.g. information sharing, cross-functional teams, etc.

Peer Review Committee

(KPIs)

Qua

lity

Depa

rtm

ent a

nd R

epor

ting

Supp

ort

Stru

ctur

e, P

roce

ss, a

nd P

eopl

e

Performance Improvement

Teams

Continuous Survey

Readiness Team

Developed by Elizabeth Lamkin, PACE

Committee Structure (Process Where Understanding and Change Occurs)

27 Reporting and Information Highway

Use Denial Reduction and as a Starting Place

Use Information to Gain CEO Support Do not assume the C-suite and CEO know what

you know Use information and analysis to gain backing for

broad change and improvement The CEOs job is to reduce roadblocks for you to get

the work done Enlist C-suite help to involve medical staff

leadership

Quantify Losses Analyze patient trends for loss of IP Track denials by reason Track denials by physician Track dollar amounts Audit coding accuracy Understand underlying causes

i.e. Finance cannot fix on the back end what went wrong on the front end

Start an Improvement Team Request revenue cycle integrity interdisciplinary

performance improvement (PI) team through quality assurance and performance improvement committee (QAPI)

QAPI committee provides platform to gain exposure for revenue cycle continuum-it is not just a finance responsibility

Engage with Physician Advisor or CMO for medical staff membership on PI team

State Goal for PI Team Reduction of medical necessity denials through

revenue cycle integrity Set financial goals after analysis of losses and

reimbursement Ultimate goal is hospital margin protection to

fund operations and capital

Get Everyone on Same Page (People)

Once On The Same Page! Eat the Elephant One Bite at a Time!

Define the “Bites” of Revenue Cycle

Business Office Care Management

Nursing Ancillaries HIMS Finance (Correct Charge Master)

Care Management Physician Advisor Nursing

Medical Staff Clinical Staff Clinical Documentation Improvement (CDI) HIMS IT

Finance Finance Care Management

Finance

Finance Care Management Physician Advisor Compliance Finance

Contracting Care Management

The PI Team Include representatives from all steps in the

revenue integrity process • Follow the standard format for your organizational PI

process (PDSA – Plan/Do/Study/Act or DMAIC – Define / Measure / Analyze / Improve / Control)

Request a resource from quality such as a LEAN facilitator to map and plan improvement

Develop key performance indicators (KPI) for each function in the process that are reported to QAPI/UM Committee

Data Gathering Each function or department KPIs should be

approved by the PI team and QAPI committee Each function or department is responsible for

gathering and reporting KPIs to Quality Department

Quality Department ensures compliance with reporting requirements

Example Hospital KPIs Scheduling and Registration

100% of patients have valid orders 100% admission paperwork completed

accurately Audit all portals of entry

Each portal using the same standards and compliance checkers as central registration

Surgical services confirm valid order and H&P before starting

Check each procedure against inpatient only list

Example KPIs Hospital Care Management (CM)

Number of medical necessity denials for IP 100% Patients screened for bed placement within 12

hours 100% Continued stay review performed Avoidable Excess days

Clinical Documentation Improvement Program Number of medical necessity denials for IP stays Number of queries required in HIMS

Example KPIs Hospital Nursing & Ancillary

100% accurate charge capture 100% daily continued stay review Timely physician order completion

Finance Timely filing Timely payment posting

Physician KPIs • Physician KPIs are reported to Utilization Management

and Medical Staff Peer Review to maintain peer protection Report by physician percent of valid orders and

documentation Report denials by physician Provide feedback loop to physicians

Physician Utilization Management Committee

42

Utilization Management Committee

Case Management Department KPIs

Physician Advisor KPIs

Physician Scorecard Reporting

RAC/Billing Compliance Committee

HIMMS Department

Departments

Committees

Standard Chart Reviews Peer Chart Reviews

Inter-disciplinary Chart Reviews

• Open • Closed • Special Studies

Quality Department

Information Flow

Scorecards Analytics

Business Intelligence & IT

It Really is Manufacturing Each step is dependent on the quality of the prior

step Reduce variation and eliminate errors Each step must be defined, measured and reported

for accuracy and continual improvement Highly people dependent so training and real

time oversight critical success factor

Live by This Pearson's Law: "That which is measured improves. That which is measured and reported improves exponentially." - Karl Pearson

Sustainability Three Key Roles for Ongoing Compliance: Admission Care Manager Clinical Documentation Improvement Specialist Physician Advisor

45

Review every admission IP/OP for appropriate bed status or place of service

Assign a CM to each point of entry Consider an Emergency Department CM Outsource off-hours or low volume times

Advise Physicians on bed status Partner with Physician Advisor Serve on Utilization Committee Report performance indicators

Admission Care Managers (ACM)

Open chart audits to ensure accuracy of clinical documentation

Based in Health Information Management or Quality Resource to staff and physicians Perform real time physician queries Reduce number of queries by coders Assist Physicians to navigate charts Report Performance Indicators

Clinical Documentation Improvement Specialist (CDIS)

Expert on Quality/UR Resource to CDIS PA collaborative & non-intimidating

Must be available to Case Management for second level review and physician engagement

Ability to interact and have positive conflict with medical staff

Be a resource to medical staff CEO backing for PA function Report Performance Indicators

Physician Advisor

Finally Healthcare is tough – not just for CEOs Success is dependent on everyone acting in teams The CEO and C-suite need your support and pro-

active system improvements and teamwork Use your existing committee structure:

Break down silos Ensure accountability Information highway from staff to medical staff to the

Board

Finally Be a role model for positive change Measurement and reporting must be ongoing and

continuous Be brave! While we do not know the future we do know

what we can control and improve