Category Archives: Thoughts & Musings

Nearterm shares its thoughts & musings on subjects universally applicable to hospitals, physicians, and other healthcare organizations.

How Many Revenue Cycle FTES Do You Need?

Jim Matthews RCM & Healthcare Financial Management Consultant
Jim Matthews, Principal, Nearterm Corporation

Revenue cycle staffing patterns and ratios are all over the map among provider organizations. This makes sense when you consider that there are variables like technology, volume, patient type, payor mix, skillset, organization structure, mission and management practices. Hospitals often rely on benchmarks in conjunction with staffing decisions. Benchmarks do very little to recognize these variables in a useful way so they are generally not a universally reliable gauge for staffing decisions. However, there are some cases where all of these variables are homogeneous therefore lending credibility to the use of benchmarks for comparative analysis.

A more scientific approach that is globally applicable requires decision making based on the relationship of labor allocation to work arrival. This approach requires (a) full understanding of volumes in terms of type, arrival timing, processing requirements by type etc. and (b) realistic understanding of labor capability and availability at given times. The goal is to match labor allocation as precisely as possible to work arrival so that volumes are processed in a timely manner and productivity is maximized. The following is a hypothetical illustration of how this concept might be applied in various functional areas around the revenue cycle although the concept is applicable in almost every area.

Billing:

Patient accounting offices usually operate based on a five day work week.  Labor allocation in billing is the same each of the five days of the week (e.g. 8 to 5 Monday through Friday). However, the hospital is a 24/7 business and there is patient volume every day. When the billing team arrives on Monday, they have 3 days billing volume in their queue. If they can complete 3 days of volume on Monday, productivity is “x”. When they arrive to work Tuesday through Friday, they have only 1 day of volume each day so productivity is “X-2 days volume” and remains at that level through Friday. How is the change in productivity reconciled? Another scenario is that if they do not complete the 3 days volume on Monday, the hospital has a backlog until later in the week, assuming they caught up by the time they leave Friday at 5:00.

Idea

Flex staffing pattern to allocate labor to work arrival time:

  1. More hours are scheduled for Mondays, tapering down throughout the week based on work arrival
  2. Schedule weekend labor allocation in billing so that labor allocation better matches work arrival

Practical Guidance

The above is an illustration based on assumptions about volume and staffing patterns. It is intended for conceptual design that can be implemented using an engineering approach. Every hospital has to adapt this design in a way that recognizes their operating environment. It requires comprehensive understanding of volumes. However, we have applied this principal of “labor allocation to work arrival” in many hospitals successfully. It works in patient access, billing, follow-up, and most volume driven areas.

Jim Matthews
Principal, Nearterm Corporation

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Does Your Revenue Cycle Team Approach Billing and Collection Efficacy the Same Way They Approach Their Paychecks? Why Not?

Jim Matthews RCM & Healthcare Financial Management Consultant
Jim Matthews, Principal, Nearterm Corporation

I expect that if one of your employees’ paychecks were delayed or underpaid, they would be resolute about getting the problem resolved right away. When inquiring about the problem, they probably would not be accepting of “it is in process” or “we did not get your time report” or how about “please leave a message and we will get back to you within 48 hours.” On the contrary, they would be more likely to drop everything and demand immediate action. This is understandable. They have worked hard and they are entitled to be paid every two weeks like clockwork. After all, they have bills to pay.

Here’s the thing: the hospital provides excellent patient care and like the hypothetical employee, the hospital is entitled to be paid correctly and on time. The hospital cannot deposit delays and promises any more than the employee can.

It is important here to recognize that the complexities associated with capturing hospital revenue and converting hospital revenue into cash are enormous compared to managing payroll – I get that. But, conceptually, the analogy I have offered is relevant to the kind of ownership thinking and culture that can make a big difference in Revenue Optimization performance.

If your team does not connect every Patient Account and Revenue Cycle related activity with the hospital’s paycheck and behave with the same tenacity as if it were their own, find out why. You might hear responses that lead to high impact educational opportunities and/or learn more about the culture of your organization and the individuals in it.

In 2007, my company, Nearterm Corporation embraced the importance of ownership mentality at every level in our organization. We introduced more advanced training programs, upgraded technology and reorganized. We formed an Employee Stock Ownership Plan (ESOP) that allowed employees to vest as shareholders – they could actually become owners. Our associates began to function like owners, not just employees. They understand that client service excellence drives not only the company paycheck but theirs as well: they connect the dots!

The result for us is marked by excellent service to our clients, greater attention to detail, enhanced teamwork, creative thinking and steady profitability since inception. But maybe one of the strongest indicators of our success is that our hospital clients have recognized the ability of our consultants to quickly assimilate their business challenges and approach them as their own. Our people own their paychecks, the company’s paychecks and treat client engagements as if they own that client’s success as well. It really is a mentality, a way of thinking that works universally.

Every organization is different but a strategy that promotes ownership thinking is, in my opinion, critical regardless of tactics that are driven by those differences.

Jim Matthews
Principal, Nearterm Corporation

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Posted By: nearterm-admin

New Year, New Opportunities

Jim Matthews RCM & Healthcare Financial Management Consultant
Jim Matthews, Principal, Nearterm Corporation

In 2016, Nearterm was part of many client success stories from all over the country. We helped an 850 bed facility in the Southeastern United States reduce un-coded DNFB from $50 million to $2 million through interim leadership and coding support. A California client with a point-of-service collection goal of $25 million surpassed it to reach a record of $37 million. This same client also sustained first pass yield at 96% through process innovation, reorganization, training and other transformational initiatives designed and facilitated by a Nearterm professional (the case study, “Managing Receivables Through Patient Access Ingenuity,” is available on request). At a private 196 bed hospital in the Midwest, our Interim Revenue Cycle Leader and team drastically reduced AR days. These are just a few of our wins in 2016!

Nearterm also implemented several internal improvements in 2016, all aimed at client service excellence. For example, we upgraded PCR, introduced new talent acquisition and assessment protocol, redesigned training and continuing education incentives for professional staff and introduced a new cutting edge encoder for use by HIM staff as they assist clients with audit and coding services.

It’s all part of the mission commitment every Nearterm professional embraces each and every day:

Our mission is to translate employee ownership into unparalleled service distinction resulting in the mutual long term success of our client organizations, our company and the people involved.

We have aggressive plans for 2017, beginning with the Vision Summit we held in January, and participation in the Healthcare CFO Summit later in the year that will further our journey. We look forward to working with our clients this year in the spirit of our mission.

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Improving Cash Flow

HFMA Gulf Coast Image 2

Check out this great article written by our very own Jim Matthews for the HFMA Gulf Coast Express – February 2016 Newsletter:  http://files.ctctcdn.com/d6aa2798201/aedf162e-cc2f-46a7-ab9b-c49a1b0708bc.pdf

Improving Cash Flow

Cash flow from patient care revenue is one of the CFO’s main concerns in today’s transitioning industry environment. How can hospitals and healthcare provider organizations develop sustainable and growing cash flow in this new world?

At Nearterm, we believe that the cash flow challenge to hospitals and healthcare facilities today is to build a sound revenue cycle management (RCM) process that balances a quality consumer-patient clinical experience with an improved financial experience. Doing that produces a sustainable and growing cash flow.

How do we get this balance?

It is critical is to get the patient’s financial experience in-line with the patient’s clinical experience, from the front office to the back office. To do this, our customers are integrating new RCM software with the hospital’s clinical and coding systems to mirror and follow patient care cycle, from front to back office.

What should happen in the front office?

Today, given the complexity of healthcare financing, an important component of the front office patient access is financial options counseling. Here, the patient is advised of the anticipated costs and a payment solution such as verification of coverage, insurance or self-pay is determined.

Most patient-access situations will be routine, but others may require a custom solution. The custom cases are the exceptions and they typically need more time and more experienced professionals to handle them.

The better the front office is at what it does, the easier it is for the back office.

What should happen in the back office?

With the new RCM software integrated with the hospital clinical and coding systems, the back office can track the claims process at every point of the clinical experience. This allows the back office to follow the process and address any issues to prevent a claim denial after the patient is discharged. The goal is to have the patient leave with a positive financial experience when discharged.

There will be exceptions such as denials and non-payment. Then the goal becomes account resolution and determining how to prevent such instances in the future.

How does Nearterm help their clients with RCM?

Nearterm is very flexible in how we engage with clients, providing a custom mix of:

  • Interim Management
  • RCM Consulting
  • HIM/Medical Coders (On-site or Remote)
  • AR Resolution Specialists (On-site or Remote)
  • Healthcare Executive Search
  • RCM Project Staffing
  • Co-sourcing

Co-sourcing is an interesting new way of looking at how we work with customers.

Clients can co-source the exceptions mentioned previously that occur in the back and front offices. We offer experienced Patient Access and AR Resolutions Specialists as well as HIM/Medical Coders who can work on-site or remotely.

In addition, our RCM interim management professionals can manage RCM process improvements to reduce exceptions and improve patient account resolutions.

We find that the better a client gets at RCM, the more payors will favor them and that in itself can generate more business and more cash flow.

Want to hear more, give us a call at 888-646-1330

Posted By: nearterm-admin
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