The document discusses revenue integrity black holes, which are system or process breakdowns that prevent hospitals from getting paid accurately or timely. Black holes exist due to complex billing requirements, gaps in charge capture processes, lack of coordination between departments, and overreliance on technology without sufficient human expertise and oversight. The author provides examples of common black holes and advocates forming a revenue integrity task force to continuously assess processes and identify weaknesses.

1. Revenue Integrity Black Holes A Former CBO Director’s Perspective Rob Jones, MBA, CPAT Director of Revenue Integrity January 2011

2. Objectives Discuss some basics related to revenue integrity black holes Discuss why black holes exist Open forum discussion Walk through some “real life” examples of black holes Review solutions

3. Background? How many people come from Finance backgrounds? How many people come from Operations backgrounds? How many people have done both? Of the business office or patient accounting people in the room today, how many of you started off as a biller?

4. My Background / Perspective Representative, Medicare Billing (Hospital CBO) Supervisor, Account Maintenance (Physician CBO) Manager, Cash & Budget (Hospital CBO) Director, Patient Financial Services (Hospital & Physician CBO) Vice President, Revenue Management (Hospital CBO) Chair, Revenue Cycle Committee (various health systems) Consultant, Revenue Integrity (IMA Consulting)

5. What is Revenue Integrity? Revenue integrity can be summarized as follows: “ properly capture and correctly bill for services performed, maximize pricing opportunity, and ensure prompt accurate payment”

6. What is a Black Hole? A Black Hole is defined as follows: “ a region of space from which nothing, not even light, can escape”

7. What is a Revenue Integrity Black Hole? In healthcare Revenue Integrity, a Black Hole translates to: “ a system or process breakdown that prevents a hospital from getting paid accurately or timely”

8. WHY DO BLACK HOLES EXIST?

9. Why Do Black Holes Exist? Let’s start with billing requirements: Ultimately everything we do is summarized on a single form called the UB-04. Who can tell me how many fields exist on a UB04? Do payers have unique UB-04 data element requirements? How many fields on the UB04 is the business office responsible for?

10. Why Do Black Holes Exist? Assuming the UB-04 claim in billed, did it correctly capture all the services performed in field 44? The critical link between service delivery and billing on the UB-04 is the charge description master (CDM), which is basically the price book for the hospital. Are all the services or supplies currently listed in the CDM? Is the pricing relative to APC / other fee schedule reimbursement low? How often are CDM service codes / procedures with no assigned prices reviewed to ensure any internal manual pricing policies are compliant? How many people have “software” or “systems” that are supposed to take care of all this?

11. Why Do Black Holes Exist? Assuming you’ve done everything correct and billed a perfectly clean UB-04 that captures all the services performed, are there processes and key performance indicators (KPI’s) in place to accurately record transactions and manage exceptions? When is the claim adjusted? Is it Systematic or Manual? If systematic, who is programming the contract management system? Are transaction codes applied electronically or manually? How are payment variances tracked and investigated?

12. Why Do Black Holes Exist? Assuming everything is “perfect” on the UB-04 and the payers reimburse the correct amount, could there still be a black hole with revenue opportunity? YES! Are the managed care contracts reviewed by a business office professional? Is there an opportunity to unbundle certain services from and inpatient claim for additional reimbursement? Is there a strategic pricing opportunity based on contract terms? How are supply items reimbursed? What about supply expenses? Are you losing money due to supply costs? Are zero balances reviewed regularly for underpayment opportunity?

13. What’s The Bottom Line? “ You don’t know what you don’t know!” No one person knows everything, the healthcare landscape is simply too complex. Ensuring revenue integrity requires “subject matter expertise” in patient access, case management, charge capture, charge description master, coding, compliance, patient financial services, managed care, reimbursement, and finance. Coordination between all of these subject matter experts is essential to billing a clean claim with all the appropriate charges.

14. We Talked About People And Process, But What About Technology? Let’s talk about technology….. Hospitals rely on information systems to link the revenue cycle departments and electronically push information flow from department to department. Information systems are not perfect and often have limitations. Additionally, these systems are only as good as the people who program them. Are your processes built around systems, or are systems built around your processes? Do you rely too heavily on technology? Does an imbalance exist in your organization?

15. Systems Don’t Solve Problems, People Do! Our reliance on computer technology is one of the major underlying reasons why black holes exist. Over the last decade we have focused more on technology with a diminishing need for people. Computer automation has given us a false sense of security. Personal interaction has decreased. What about critical thinking or deductive reasoning?

16. Revenue Integrity: Discussion

17. Revenue Integrity: Discussion Is there a person in this room that believes their hospital(s) does not have a single black hole? If you had the choice to hire more people or implement a new computer system, what would you choose? How has technology impacted our critical thinking ability and deductive reasoning skills? Does anyone have an example of a black hole that you personally experienced?

18. Revenue Integrity: Discussion Example #1 – After self pay collection efforts were exhausted, the accounts were not transferred or adjusted to bad debt Black Hole Financial Impact: Medicare bad debt was not claimed Bad debt reserves were understated Example #2 – Secondary balances were not getting transferred after the primary insurance company paid Black Hole Financial Impact: Decreased collections Increased bad debt via reserve provision

19. Revenue Integrity: Discussion Example #3 – The average assigned ER level was below the local and regional hospital average Black Hole Financial Impact: An opportunity to assign a higher ER level exists Charge capture opportunity additionally identified

20. Revenue Integrity: Discussion Example #4 – Assigned price is less than Medicare reimbursement. Impact of new OPPS coding requirements on reimbursement? Black Hole Financial Impact: Lost revenue Example #5 – Supply item cost exceeds actual case rate reimbursement. In some cases which require an invoice for reimbursement, nothing is sent. Black Hole Financial Impact: Lost revenue

21. Revenue Integrity: Solutions Form a revenue integrity task force of seasoned and knowledgeable professionals in all areas of revenue cycle is the single most important critical success factor Assess current state to identify areas of weakness and create monitoring tools or KPI’s to monitor performance Cross train “intelligent” resources Do not solely rely on systems, instead build systems to support your processes

22. Contact Information Rob Jones, MBA, CPAT Director of Revenue Recovery IMA Consulting 3 Christy Drive Chadds Ford, PA 19317 (484) 840-1984 (office) (484) 431-4324 (cell) [email_address] www.ima-consulting.com