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Smart Client Assessment - RCM Services
Smart Client Assessment - RCM Services
Smart Client Assessment - RCM Services
Smart Client Assessment - RCM Services
Smart Client Assessment - RCM Services
Smart Client Assessment - RCM Services
Smart Client Assessment - RCM Services
Smart Client Assessment - RCM Services
Smart Client Assessment - RCM Services
Smart Client Assessment - RCM Services
Smart Client Assessment - RCM Services
Smart Client Assessment - RCM Services
Smart Client Assessment - RCM Services
Smart Client Assessment - RCM Services
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Smart Client Assessment - RCM Services

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Learn what your fastest route is to a better bottom line with NextGen® Revenue Cycle Management (RCM) solutions …

Learn what your fastest route is to a better bottom line with NextGen® Revenue Cycle Management (RCM) solutions

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  • 1. Assessment prepared for name of clientAmbulatory Health Center Sample Proprietary and Confidential Achieving and Sustaining Financial Health in Your Practice 8 Essential Metrics You Need to Know
  • 2. Already challenged with an overly complex, ponderous, and slow-moving healthcare system, physician practices today also face stringent regulations, increased payer rules and edits, and eroding bottom lines. Healthcare managers must run physician practices not just as healthcare delivery sites, but also as real businesses. As a NextGen Healthcare client, you have the technology to take your business to the highest level. The question is–are you capitalizing on your system’s functionality to optimize your reimbursements every visit?
  • 3. To help you benchmark your practice’s performance, assess your financial outcomes, and identify opportunities for improvement, we offer a two-pronged approach: InSightReportingTM Analysis: Assessedthe last 90 days of ERAs for processing time, denial detail, andpayment data. Best Practices Financial Assessment: Collecteddata fromNextGen® Practice Management and analyzedcurrent trends of charges, payments, and net revenue. The report whichfollows is a sample of an assessmentsummary. It shows the eight performance indicatorsneededto gauge, and sustain, your practice’sfinancial health. These metrics include: 1. Revenue Cycle Assessment 2. Utilization 3. Staff Processing Time 4. Payer Processing Time 5. Charge Lag 6. Denials 7. Accounts Receivable Management 8. Additional Revenue Enhancements Compare howyour practice performs againstour best practice metrics, which alignwithour software’s optimized, automatedoutcomes. Leverage our experience with similarly sized organizations, andwithrevenue cycle issues. See howoptimizing keysoftwarefunctions can drive your business andclinical success. Your opportunities for optimization include: OPPORTUNITY COST Denial Management (annual) $1,307,387 Accounts Receivable Improvement (one-time) $312,318 Decreasing Charge Lag (one-time) $50,290
  • 4. Revenue Cycle Assessment Thisanalysisisintendedto providea “snapshot”ofanAmbulatoryHealth Center’s financial healthinthecontext ofits revenuecycle, andtoidentifytangible opportunitiesto improve revenueandefficiencywithNextGenRCM Services (RevenueCycleManagement). The table above shows the eight areas of focus, comparing current results against NextGen®-optimized metrics. This graph represents the practice’s per- formance relative to the optimized metrics above. There are areas for improvement in Denial Management and Accounts Receiv- able, First Pass Clean Claims, Charge Lag, Staff Processing Time, and Collections. Performance Indicators Current State Optimized Office Visit Average Charge Lag (days) 4.62 <1 Staff Processing Time (days) 43 14 First Pass Clean Claim Rate 80% 96% Denial Percentage 14.2% 4% Percent of Eligibility Checked Before Each Visit 55% 95% Days in A/R 57 35 A/R Over 90 Days 35% 14% Net Collection Ratio 95% 96-99%
  • 5. Connecting the Data with Comparative Analytics Yourrevenuecycle problemswill beeasierto solvewithactionableinformationinhand. We generatedthefollowingdata fromanassessment ofyourlast 90 daysofERAs usingthe comparative benchmarkingtool,Insight Reporting™. Thisview enablesyourpracticeto benchmark andcontextuallyassesscode utilization,denial information,and productivity measureswithotherhealthcareorganizationsforrelativeassessment. The graph above shows average existing patient E&M code distribution for your practice in blue. State averages in red and national averages in green. The graph above shows average new patient E&M code distribution for your practice in blue, state averages in red, and national averages in green. Utilization Howdoesmy codeusage compare tomypeers? Thegraphsbelow compareyourE&M code usageagainstothersimilar practicesatthestateand national level. Your Existing Patient Utilization Profile is 4.9% below your peers. • Taking into account your average reimbursement for an existing patient visit, and the variance from your peers, more direct alignment with state averages could result in an additional $10,474 in missed opportunity for this 90-day period, or $41,896 annually. Your New Patient Utilization Profile is .8% below your state peers. • Direct alignment with your state peers would result in $5,646 additional opportunity for the 90-day sample period, or $22,584 annually.
  • 6. Staff Processing Time The time between the date of service and the date the payer writes a check for the claim is your processing time. InSight Reporting breaks this time down between staff processing time and payer processing time. How is your staff performing? The graph shows monthly staff processing time in blue, compared to state averages in red, and national averages in green. Average Staff Processing Time Ambulatory Health Center State Nation Days 82 17 35 As seen in the table above, the staff processing time is nearly five times the state average and over two times the national average.
  • 7. Payer Processing Time Am I being paid at the same speed as my peers? Payerprocessingtimeisthenumberofdays fromthedateof payerreceipt to thecheck dateofaclaim. Average Payer Processing Time Ambulatory Health Center State Nation Days 15 15 13 As seen in in the table above, payer processing time is relative to your state and national peers. The graph shows monthly payer processing time in blue, compared to state averages in red, and national averages in green.
  • 8. Below isacomparisonof payerprocessingtimesbyweek,comparedto stateand national peers. Yourpayerprocessingtimeisconsistentwiththestateand national levels. We’ve assessed your weekly payer processing time for codes 99211-99215. Your payers average 22 days to process code 99213, which is five days more than any other code below. Payer processing time for all payers has leveled out in the recent weeks.
  • 9. Charge Lag Average Charge Lag: Thetime betweenthe dateof serviceanddateof charge entry. Delaysin bothclaim submissionandstaff processingtimeimpactthetimeto collection. A90-day sampleofdatawasassessed. Thetablebelow showsthe resultsforyour practice:43% ofchargeswereenteredin thesameday,65% ofchargeswere enteredwithintwo days,and92% ofchargeswereenteredwithin sevendays. Theaveragechargelagwas4.62days. Cost of maintaining the current state: • $92,628inchargesaregeneratedperday. • Nearly 8%ofcharges,valuedatover$360k gross, arestill outstandingatsevendays, 
resultingin delayed subm ission and im pactingtim eto paym ent. • Thevalueofdecreasingchargelagbyone dayis$50,290. Charges entered same day 43.3% Charges entered 2 days or less 65.2% Charges entered 7 days or less 92.3% Charges entered 31 days or less 97.3% Longest Charge lag (days) 83%
  • 10. Denials Everyhealthcareprovider expectsto bepaid. However,payerscontinuallyfindreasonsto deny payment,to underpay,orto delay payment. Inthetypical practice,upto 47% ofdeniedclaims are neverresubmitted. The first passcleanclaim rate,ortherateoffirst-passclaimacceptanceat theclearinghouse,is an indicatorof how often a claim beingsent outiscorrect thefirst time. AlthoughNextGen Healthcareclientsaverage 95% first passcleanclaimrates,thepractice’srateis80%;that is, 80out of100claimsare processedupontheirinitial submission. Asyouwill seebelow,5.8% ofclaimsare rejectedat theclearinghouseand14.2% ofclaimsaredenied bythe payer. Thegraphbelow reflects anassessmentofthelast 90daysofElectronicRemittanceAdvice, showingthecurrent denial ratecomparedto stateandnational peers. • Approximately 14.2% of claims are denied, which equates to about 21,580 claims per year requiring manual intervention to fix and re-submit • Although Worklog manager is available, no tasks have been set up, including those prioritizing denials to ensure all denials are being worked.
  • 11. Tracking and Preventing Denials Your denial rate is 14.2%, which is substantially higher than the 8.9% state average and 9.5% national average. NextGen® Revenue Cycle Management clients in your specialty realize an average of 3.5% denials. Why do payers deny claims? Below are the top ten denial reason codes. The claims represented had missing or incorrect information, ineligible insurance, or were submitted too late per the payer contracts. Timely Filing • 208 denials (3.5%) were due to timely filing (Reason Code 29), charged out at $243,234 gross. Even if these claims are fixed, they have exceeded the timely filing parameter for payers. • At your GCR, these timely filing denials equate to $132,057 in lost income. Cost of Denials • There were 5,862 claims, totaling $1.2M in gross charges, denied during the 90-day reporting period. This equates to nearly 23,500 claims per year, totaling $4.8M in gross charges, requiring intervention to fix. • MGMA estimates 47% of denied claims never get reworked; these end up as lost revenue. • If 47% of your denied claims were not reworked, this would total $1,307,386 annually in lost net income. Reason Code Reason Code Description Denial Count 5862 97 The benefit for this service is included in the payment allowance for another service 1078 18 Duplicate claim/service 1153 A1 Missing Remark Code 908 16 Claim/service lacks information which is needed for adjudication 365 31 Patient cannot be identified as our insured 301 29 The time limit for filing has expired 208 50 These are non-covered services because this is not deemed a “medical necessity” by the payer 192 27 Expenses incurred after coverage termination 190 B7 The provider was not certified to be paid for this procedure this DOS 176 109 Claim not covered by this payer/contractor 176
  • 12. Accounts Receivable Management Thisclient’sA/Risa runningagingofall billed,outstandingcharges;that is,thechargeswhich are awaitingpayment. Atypical measureofA/Ris daysinA/R:Theaveragetimeit takesto collect payment.LowerdaysinA/Raremore favorable,meaninglesscash islockedin AccountsReceivable. • Thispracticehas57days inA/R;it takesthemon average57daysto get paidonaclaim • A moreappropriatebenchmarkfor yourspecialty is35 daysinA/R In addition, too many claims are aging in A/R, not getting paid: • 34%of A/Risover90daysold;a moreappropriate benchmarkforyourspecialtyislessthan 14%ofchargesover90daysold • 18%of A/Risover180daysold • 4% ofA/Risoveroneyear Over 90 Over 180 Over 365 $1,771,347 $967,213 $212,846 34% 18% 4% This graph is the current A/R aging, showing current A/R by aging category, compared to optimized A/R management, closer to 35 days in A/R.
  • 13. Thisgraphshowstheagingcategory for whichpaymentshavebeen receivedon electronic claimsoverthe past 90days. • 91%ofcashisbeingpaidonclaims lessthan60daysold;this isdirectly alignedwiththeappropriatebench- markof90%. Cost of maintaining the current state: • Totalof$5,235,442isinA/R. Massre-billingleads to 57DaysinA/R,delays in payment, andtimelyfilingwrite-off’s. Over34% ofA/Risover 90days,comparedto theMGMA benchmarkof14%. Opportunity for Prompt Account Reconciliation and Increased Collections • Aged A/Rhasbeenadjustedfor collectability. • All Commercial >180days (90daystimely filing+90daystimelyfollow-up)andGovt >365 dayshasbeenadjusted. • The AdjustedCurrentDaysOutstanding is 47 days. • RCMcustomersinyourspecialty realize an averageof35DaysinA/R. • The difference between47 and35Daysin A/Ris$600,613incollections. See calculationsinthetabletotheright. Last 90 Days of Charges $8,336,559 One Day of Charges $92,628.43 Days in A/R 57 Adjusted Current DSO 47 Benchmark 35 Total A/R At Benchmark $3,241,995 Difference $1,106,256 At Net $600,613 Gross Difference GCR NET per GCR $1,106,256 54.3% $600,612 Taking into account the amount of patients due in A/R and the status of aging claims, a more appropriate expectation for a one-time cash infusion due to a decrease to days in A/R is a fraction of the upside above, closer to $312,318.
  • 14. Summary of Total Opportunity Costs Additional Revenue Enhancements Thispractice’scharges,collections,andadjustments forthe12-monthperiodbetween July2011andJune2012areasfollows: Net CollectionRatio:relationship betweenactual collectionsandwhat apracticeshouldhave collected,expressedasa percentage. TheNet CollectionRatio (NCR)isgenerallyusedas abarometerto assess how closelyaligned collectionsareto contractedexpectations. A comparativebenchmark forthismeasureis96-100%. A practicewithoptimizedoperational andtechnological processeswouldbecollectingascloseto itsfullcontractedratesaspossible. Thispractice’sNCRis95%. Factorsthat impact NCRincludeunderpayments, inwhichpayerspayless thanthecontracted rate,aswell ascollections that aretiedupinpatient pay,amongothers. OPPORTUNITY COST Denial Management (annual) $1,307,387 Accounts Receivable (one-time) $312,318 Charge Lag (one-time) $50,290 JULY 2011 - JUNE 2012 Charges Collections Contractual Adjustments $36,081,051 $19,589,255 $14,201,058 Improvements are not cumulative; enhancements in one area may inherently improve another.

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