How To Reduce Costs And Improve Financial Performance using NextGen Practice ...
Webinar_Dangerous_Trends_James_Muir_Jan2015V6
1. Welcome to the Webinar
Dangerous Trends in Healthcare Reform and
Getting Paid
We’ll begin in a few moments.
2. Before we get started there are few housekeeping items
• This webinar is being recorded
• For an uninterrupted presentation, lines will be
muted for the duration of the webinar
• We will address questions at the end of the
presentation via the Q & A Panel
• Feel free to submit questions via the Q&A Panel
throughout the presentation
3. Today’s Panelist
James Muir
Vice President of Revenue Cycle
Management at NextGen Healthcare
James had 20+ years of experience in
the healthcare industry. He is currently
focused on helping ambulatory clinics
& hospitals improve financial
performance through process
improvement, automation and services.
4. The 4 Most Dangerous Trends Facing
Medical Groups
5. Fair Warning…
• The following material is heavy stuff. We will do
our best to illustrate strategies to aid you in
addressing them.
Things our lawyers make us say...
• Neither NextGen Healthcare nor this presenter is
engaged in rendering legal or other professional
advice and this presentation is not a substitute for
the advice of your attorney, accountant and/or other
professional advisor.
6. The 4 Most Dangerous Financial Trends Facing
Medical Groups Today
1. Regulatory & Compliance
Burdens Continue to Increase
2. Operating Costs Continue to
Rise
3. Provider Reimbursement
Continues to Decline
4. Patient Collections has
Become Mission Critical
7. #1 Regulatory & Compliance Burdens
Continue to Increase
“2014 brings a perfect storm of regulatory compliance issues”
– American Academy of Family Practice
9. 2015 Summary of Important Regulation &
Compliance Issues – Slide A
DATE Regulation Category Summary Description
Jan 1, 2015 Medicare RVU Changes RVU Changes (Medicare conversion factor is $35.8013.
Jan 1, 2015 Medicare New Covered Services Telehealth, Chronic Care Management (CCM)
Jan 1, 2015 Meaningful Use Stages 1 & 2 Reporting period for calendar year (CY) 2015 begins for EPs. Penalty 2% in 2017.
Jan 1, 2015 PQRS Reporting for CY 2015 begins for all EPs and group practices. Used to determine the 2017 VBPM. EPs and
groups can avoid 2017 payment adjustment by satisfactorily reporting in 2015.
Jan 1, 2015 Comprehensive Primary Care (CPC)
Initiative
Deadline for CPC Practices to report EHR based clinical quality measures.
Feb 28, 2015 Meaningful Use Last day for Medicare EPs to register and attest to receive an incentive payment for calendar year (CY) 2014.
Feb 28, 2015 PQRS Last day to submit 2014 PQRS data through some reporting methods, such as EHR. Last day 2014 claims will
be processed to be counted for 2014 PQRS participation.
Feb 28, 2015 Value-Based Payment Modifier Last day to request a correction to a 2015 VBPM determination, which impacts physicians in groups with 100 or
more EPs and is based on 2013 performance.
Mar 31, 2015 Meaningful Use Stages 1 & 2 Last day for Medicare EPs to register and attest to receive an incentive payment for calendar year (CY) 2013.
Apr 1, 2015 Sustainable Growth Rate (SGR) Medicare 21.2% fee schedule reduction due to the sustainable growth rate (SGR) formula.
Jun 30, 2015 PQRS/Value-Based Payment Modifier Deadline to register for the 2015 PQRS group practice reporting option.
Oct 1 2015 ICD-10 Deadline to complete ICD-10 transition for full compliance
Dec 31, 2015 Meaningful Use Stages 1 & 2 Reporting year ends for eligible professionals (EPs).
Dec 31, 2015 PQRS Reporting for CY 2015 ends for all EPs and group practices. EPs and groups can avoid 2017 payment
adjustment by satisfactorily reporting in 2015.
2015 Meaningful Use Stage 3 Requirements to be released this year.
10. 2015 Summary of Important Regulation &
Compliance Issues Contiunued – Slide B
DATE Regulation Category Summary Description
2015 Patient Centered Medical Home Changes expected this year.
2015 Payer Advanced Primary Care Practice
Demonstration
Details to be released this year.
2015 Independence at Home Demonstration Additional details to be released this year.
2015 Medicare Shared Savings Program
(MSSP)
Ongoing updates.
2015 Medicare Pioneer ACO Model Ongoing updates.
2015 Retrospective Bundled Payments for
Episodes of Care
Additional details to be released this year.
2015 Prospective Bundled Payments for
Episodes of Care
Additional details to be released this year.
2015 Audits HIPAA Audits, Federal fraud and abuse programs - RAC Audits. Possible Anti-Fraud Overhaul.
2015 ACA 60-Day Overpayment Rule Changes expected this year.
2015 New Legislation Non-regulatory standards based risk management framework, New privacy regulations/legislation, New security
regulations/legislation, FDA regulation
11. #2 Operating Costs Continue to Rise
Dealing with rising operating
costs
– #1 Challenge for Group Practices
Source 2014 MGMA Survey
– Rising costs has been a top
challenge for six-straight years.
Challenge
12. Medical Practice Profit is Low
• Average Profit for Medical Practices is only
12.81%
‒ Source: Profitcents Jan 2014
12.81%
13. Rising Operational Costs
Operational costs have
risen five straight years
in a row.
– The State of Medical Practice -
MGMA Connexion magazine,
January 2013
Over the last 11 years, we've seen the cost of
running a medical group go up twice as fast as
the consumer price index.
‒ David Gans, M.S.H.A, an MGMA-ACMPE senior fellow
14. Average Cost Distribution for Medical Practices
Payroll & Benefits outweigh all other expenses combined
55%
14%
8%
5%
5%
5%
5% 2% 1%
Payroll & Benefits
Office Space
Medical Supplies & Drugs
Laboratory
Professional Liability
Business Supplies
Equiptment & Furnishings
Outside Professional Services
Promotion/Marketing
Source: Profitcents 2014
15. Medical Practice Costs Increases By Category
All support staff costs are up over 12 months
10.2% increase in support staff costs overall
10.20%
8.24%
15.32%
18.96%
17.97%
13.88%
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
16.00%
18.00%
20.00%
Total support staff Total employed
support staff
Total business oper
staff
Total front office
supp staff
Total clinical support
staff
Total ancillary
support staff
Operating Cost Increase by Category
Source: MGMA 2013 Cost Survey
16. The war for talent is
over, and the talent won.
Forbes Dec. 19 2013
17. Staffing Costs are Rising
• “Average salary continues to climb
steadily … ”
Salary for Biller/Coders raised 5% to
9.7%
– Source: 2013 AAPC Salary
Survey
• The cost of front office support staff
has increased 35.39% over the past
4 years.
– 18.9% in past year
– Source MGMA Cost Survey 2013
18. Cost of Experienced Staff
Source: Physician’s Practice 2013 Staff Salary Survey
19. Medical Staff Turnover is Rising
Average medical staff
turnover 29.4% in 2013
Up 4.7% from 28% in 2012
– U.S. Bureau of Labor
Statistics - via Nobscot Corp
27.0%
27.5%
28.0%
28.5%
29.0%
29.5%
Avg Medical
Staff Turnover
28.0%
29.4%
2012
2013
20. Billing Staff Hard to Find
• Billing/Coding
Unemployment at an all-time
low
• Salary for Biller/Coders
continues to increase
– Increased 5 - 9.7%
– Depending on geography
• Experienced Billers/Coders
paid 30-90% more
– Source: 2013 Salary Survey
Source: US Department of Labor 2013
7.40%
1.70%
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
8.00%
National Unemployment Billing/Coding Staff
Unemployment of Billing/Coding
Staff
21. Staffing Costs – Summary
• Costs are Rising &
Practices Have Limited
Ways to Effectively
Control the #1 Cost
• They are caught between
the “rock” of increasing
staffing costs & the “hard
place” of scarcity of
qualified staffing
candidates.
22. Action Strategies to Combat Rising Costs
• Protect & Retain Current Staff
– #1 Expense
• Pinpoint all cost areas and
evaluate options
– Staffing, Space, Supplies,
Energy, Etc.
• Evaluate Variable Cost
Models
• Evaluate Co-sourcing Options
• Increase Productivity
Given a choice of
focusing on
productivity gains or
managing costs, data
suggest that gains in
productivity have a
better return.
Source: Cutting costs vs.
Increasing productivity -
MGMA Dave Gans, MSHA,
FACMPE
23. #3 Provider Reimbursement Continues
to Decline
Healthcare's ailing reimbursement system will
likely take a turn for the worse in 2014.
Relief won't be felt for some time
Medical Economics Dec. 2013
24. Fitch Ratings & Moody’s predict revenue
growth declines in 2014 for providers
• Declines in revenue growth is
attributed to:
– Lower Medicare payments
– Increasing high-deductible health plans
– SGR unresolved
– Uncertainty around insurance exchange
enrollment coupled with low payments &
implementation.
Source:_http://governanceinstitute.com/ResearchPublications/ResourceLibrary/tabid/185/CategoryID/63/List/1/Level/a/ProductID/1442/Default.aspx?
SortField=DateCreated+DESC%2cDateCreated+DESC
25. Both Commercial & Government Reimbursement
Declining
• Commercial Reimbursement
Continues Downward
– Average commercial
reimbursement fell nearly 9%
– 2012 to 2013, for all new and
established office visits
– That's on top of the 10% decline
that occurred between 2011 and
2012.
Source: Physicians Practice's 2013
Fee Schedule Survey
• Medicare payments cut 2%
across the board due to
sequester
26. Penalties are Mounting
• 4 Penalty Systems in Effect
– eRx
– PQRS
– Meaningful Use
– Value-based Payment Modifier
• Sequestration Cuts in
Effect Until Year 2021
• Apply to all Medicare
Reimbursements
* Groups of 100+
+ Groups of 10+ (proposed by CMS)
^ All groups (based on reading of 7/1913 Federal Register)
27. Medicare Reimbursement Tied To Quality
• “The Centers for Medicare & Medicaid Services (CMS), the
federal agency that runs Medicare, is changing the way
Medicare pays for care by rewarding for delivering services of
higher quality and higher value.”
– Source: http://tinyurl.com/lnvp86g
• “Section 3007 of the Affordable Care Act mandated that, by
2015, CMS begin applying a value modifier under the Medicare
Physician Fee Schedule (MPFS). Both cost and quality data are
to be included in calculating payments for physicians.”
– Source: http://tinyurl.com/lnhq2uy
• About 11% of all reimbursements are now tied to quality
measures.
– Source: CPR 2013 National Scorecard
• Estimates range from 20% to as high as 50% of future
reimbursements being tied to quality measures VBPM
28. THE CURVEPERFORMANCE
TIME
First Curve
Fee-for-Service
Quality Not Rewarded
Pay for Volume
Fragmented Care
Acute Hospital Focus
Stand Alone Providers Thrive
Second Curve
Value Payment
Continuity of Care Required
Systems of Care
Providers at Risk for Payment
IT Centric
Physician Alignment
Straddle
Revenue Drops
Minimal Reward for Quality
Volume Decreases
No Decisive Payment Change
Pay for Volume Continues
High Cost IT Infrastructure
Physicians in Disarray
29. Implications of Declining Reimbursement
• Lower Profit (see cost trend)
• Forced Partnerships, Mergers & Acquisitions (see cost trend)
• Participation in Quality of Care Programs & Reimbursement Models
– EHR Incentive Program (Meaningful Use)
– PQRS (Physician Quality Reporting System)
– VBPM (Value-based Payment Modifier)
– ACO (Accountable Care Organization)
– PCMH (Patient Centered Medical Home)
– Bundled Payments
– Episode of Care
– Shared Savings Programs
• New models will change the way medicine is practiced (for many)
• Require Certified IT (along with associated costs)
– EHR
– Patient communications
– Registry Reporting
– Data Exchange
• Patients
• Healthcare providers & organizations
• Shift towards high-volume low-cost paradigm
– See shift in patient population trend
• Forced Efficiency
30. Action Strategies for Declining Reimbursement
• Avoid Penalties by Participating in Quality Programs
– Meaningful Use, PQRS, VBPM
• Participate in new payment models while risk is low
• Realign to value-based paradigms
– Control costs without compromising care
– Prepare for transparency, know your numbers
• Align with like-minded organizations
– IPAs, hospitals, payers, ACOs, etc.
• Practice evidence-based medicine
• Utilize IT & automation for care management & financial management
• Drive Patient Engagement
• Consider Clinical Service Lines by grouping like services together
• Uncover opportunities to provide new services
• Evaluate Variable Cost Models
• Evaluation Outsourcing Options
• Increase Productivity
– (see cost trend)
31. #4 Patient Collections Has Become Mission
Critical
The payer mix of the
typical medical practice
is changing.
– See Trend #5
A greater percentage of
practice revenue is
coming from patients.
12%
19%
24%
32%
35%
0%
10%
20%
30%
40%
2002 2007 2009 2012 2013
% of Revenue From
Patients
% of Revenue From Patients
Source: intuit 2012, MGMA 2012, McKinsey & Company
2013
32. Driver – High-Deductible Plans
Health care premiums have exceeded the rate of inflation every single
year for the past 14 years.
33. Drivers – Growth of High-Deductible Plans
• High-deductible Commercial plans have
been growing for years
• 1/3 of U.S. workers now have high-
deductible insurance plans
– Source: Medical Economics Dec 2013
• “Going from $1,000 to $5,000 is a game
changer for patients and providers.”
– Source: Medical Economics Dec 2013
88%
Increase in
commercial
deductible amount
since 2006
Source: Kaiser Family Foundation
2013
34. High Deductibles & the Affordable Care Act
Average Deductible on Health
Exchanges:
– Platinum – $347
– Gold – $1,277
– Silver – $2,907
– Bronze – $5,081
$2,500
– Deductible for the most
popular “Silver” plan on CA
Health Exchange
$45 – $65
– Office Visit Copay Range for
most popular “Silver” plan on
CA Health Exchange
35. Summary of ACA Plans
Bronze Silver Gold Platinum
Deductible $5,081 $2,907 $1,277 $347
Office Visit 30%
of expense
$32 $24 $16
Specialist 30%
of expense
$56 $46 $30
Family
Deductible
$10,386 $6,078 $2,846 $698
Individual Cap $6,267 $5,730 $4,081 $1,855
Source: HealthPocket 2013
36. High out-of-pocket
payments have the biggest
impact in specialists with
expensive services.
Deborah Walker Keegan
PhD, President of Medical Practice Dimensions & Co-author
of “The Physician Billing Process: 12 Potholes to Avoid in
the Road to Getting Paid”
37. Affordable Care Act Loophole
The Exchange’s 3-Month Grace Period for Non-payment of Premiums
First month of delinquency Second month of
delinquency
Terminated after three
months of delinquency
• Normal payment of claims
• Plan effectively treats this
month as paid even if enrollee
is eventual
terminated for non-payment
• No provider notification of the
patient’s delinquency
• Plan has the option to pend
claims for services performed
until the enrollee pays the
outstanding premium balance
• Providers submitting claims
during these months are notified
to the potential for a denied
claim
• If enrollee pays off the premium
balance, providers’ claims are
paid at that time
• Plan has the option to deny all
claims for services performed in the
2nd and 3rd moth of delinquency
• Providers may seek payment for
denied claims from the patient
• Patients may then enroll in a
different exchange plan during the
next open enrollment period
regardless of whether they pay off
premium balance with previous
insurers
Health plans will pay for the first 30 days after a patient misses a premium payment
Days 31 to 90 may result in withheld payments to physicians – or retroactive take backs
38. Cost Cutting Cannot Compensate for Inadequate
Patient Collections
What you collect from
insurance companies
covers your
overhead.
What you collect from
patients goes to your
bottom line.
Medical Economics
Avg. Collections per Primary Care FTE $ 470,000
% of Collections that is Private Pay 35%
Amount of Collections that is Private
Pay $ 164,500
Avg. Overhead per Primary Care FTE $ 420,000
% of Patient Balances Actually
Collected 21%
Amount of Patient Balances Collected $ 34,545
Lost Patient Revenue $ (129,955)
How much would I have to cut costs
to make up for lost patient revenue? -31%
Source: Practice Support Resources, Inc.
39. Collecting from self-pay, high-deductible,
or health savings account patients
is one of the biggest challenges
for medical practices.
MGMA CEO Susan L. Turney, MD, MS, FACMPE,
FACP
40. How likely are Patients to Pay?
78% of patients know their
responsibilities, but do not
commonly volunteer
payments if not asked .
– Source: InstaMed Trends in
Healthcare Payments
Annual Report: 2012
30% of patients walk out of
the practice without paying
anything.
– Source: MGMA 2009
When patients are asked to
pay
% Likely
to Pay
Before the see their physician 90%
At checkout 70%
After leaving the medical
practice
40%
Source: McKinsey & Company 2013
41. Patient Collections has Been Challenging for
Practices Historically
“Providers can expect to collect only
49.3% of patient balances after
treatment.”
– Source: McKinsey & Company 2010
“Most specialties collect less than half
of the patient balances billed after time
of service.”
– Source: Successehs study - Increasing Patient
Collections: A Study on Patient A/R - Oct. 2013
On average only 21% of patient
balances not collected up front ever
are collected.
– Source: Successehs study - Increasing Patient
Collections: A Study on Patient A/R - Oct. 2013
Patient Responsibility
Collected after Time of
Service
Collected Uncollected
Uncollected
79%
Collected
21%
43. Specialty 1-13 Day
Collection
Percentage
31-60 Day
Collection
Percentage
61-90 Day
Collection
Percentage
Total
Collection in
1st 90 days
91-120 Day
Collection
Percentage
121-150 Day
Collection
Percentage
151+ Day
Collection
Percentage
Total
Collections
Cardiology 7.89% 6.46% 3.07% 17.42% 2.05% 1.41% 5.29% 26.18%
Family Practice 18.65% 17.19% 7.04% 42.88% 4.06% 2.45% 7.54% 56.92%
Gastroenterology 7.42% 9.48% 5.43% 22.33% 2.92% 1.69% 5.10% 32.03%
Internal Medicine 19.87% 13.32% 6.42% 39.61% 3.94% 2.57% 10.73% 56.85%
Multi-Specialty 4.32% 4.51% 2.48% 11.31% 1.52% 1.12% 3.58% 17.53%
OBGYN 19.54% 16.65% 7.44% 43.63% 4.31% 2.73% 7.35% 58.02%
Orthopedics 14.21% 12.70% 6.31% 33.22% 4.14% 3.05% 8.48% 48.89%
Other 9.68% 7.31% 4.02% 21.01% 2.69% 1.73% 6.80% 32.22%
Pediatrics 14.80% 11.17% 6.32% 32.29% 4.13% 2.60% 8.32% 47.34%
Podiatry 24.25% 14.77% 6.63% 45.65% 3.95% 2.48% 5.63% 57.71%
Surgical 10.61% 8.43% 4.19% 23.23% 2.89% 1.78% 5.80% 33.69%
Urgent Care 4.11% 5.26% 2.61% 11.98% 1.43% 0.89% 3.34% 17.63%
Total 8.49% 6.94% 3.52% 18.95% 2.24% 1.48% 4.79% 21.08%
Patient Collections by Specialty
90.4% of patient balances that are collected are received in the first 90 days.
Source: Successehs 2013
44. The Value of Receivables Rapidly Declines
• Accounts lose 15% of their
value every month after the
first three months
• That’s 5% per day
• Balances must be collected
soon after services
(Based on U.S. Department of Commerce study of depreciation
of accounts held in-house)
45. How effective are collection agencies?
Typical collection agency cost:
25 - 30%
The average recovery rate for
collection agencies is 13.8%
– Source: ACA International
90% of malpractice suits are
with patient who owe money
– Source: The Malpractice Cure: How
to Avoid the Legal Mistakes that
Doctors Make, Edward D McCarthy
Avg
Recovery
Rate
14%
Lost
Revenue
86%
Average Collection Agency
Recovery Rate
46. Summary – Patient Collections Now Critical
• 30-35% of revenue now coming from patients
• Source: Source: intuit 2012, MGMA 2012, McKinsey & Company 2013
• Adoption of High-deductible plans increasing
– 1/3 of US workers already have high-deductible plans
– ACA Exchange plans also high-deductible
– Average deductible on health exchanges $2,500
• Source: Medical Economics Dec 2013
• ACA loophole places collection burden on practice
• Practices historically less effective at collecting patient balances
– Practices collect only 21–50% of patient balance not collected at time of service.
• Source: McKinsey & Company 2010, Successehs study - Increasing Patient Collections: A Study on
Patient A/R - Oct. 2013
• % of patient responsibility too large to compensate with cost-cutting
• Collections agencies recover only tiny portion of bad debt
– Only 13.8% of balances turned to collections are collected
• Source: American Collectors Association (ACA)
• Patient less likely to pay after encounter
– Patient only 40% likely to pay after day of service
– Receivables lose 5% value per day
• Source: McKinsey & Company 2013
47. Patient Collections Make the Difference
Thousands of dollars can be lost every year if a
doctor's office does not diligently bill patients
& collect outstanding balances from them.
In short, patient receivables can be the
difference between having a profitable
and an unprofitable practice!
HMBA February 2013
Source: http://tinyurl.com/qxfar3h
48. Best Practice is to Collect from Patients at Time
of Service
90% of Better Performing
practices collect patient
balances at time of service
– Source: MGMA 2010
74% of Better Performing
practices assist patient with
finances
– Source: MGMA 2010
10%
90%
90% Better Performing Practices
Collect Patient Balances at Time of
Service
Collect Patient Balances After Encounter
Collect Patient Balances at Time of Service
Source: MGMA 2010 - Getting paid for what you do: How better-performing practices minimize bad debt and
maximize patient collections - David Gans, MSHA, MGMA-ACMPE senior fellow
50. Results of Implementing a Credit Card on File Program
Change Comment
Improve Collections Patient balances collected in 90th percentile
Improve Cash Flow Steadies cash flow, Stabilizes finances
Eliminate Statements Reduce collection expense, deposits & staff workload in posting
payments
Electronic Payment Plans Policy-driven but flexible, Secure, "Set it and forget it."
Eliminate Manual Patient Refunds Easier & faster than refund checks, Reduce staff workload, improve
patient satisfaction with fast refunds
Eliminate Bounced Checks Reduce/eliminate in-house collection expense
Reduce/Eliminate Deposits Possible to stop operating a cash drawer, CCOF requires no deposits
Faster Check-in & Out Need to check patient balances & ask for payment eliminated
Eliminate Paper Receipts Possible to eliminate receipts, Save time and expense
Eliminate Collection Agency Fees No need to send to collections unless credit cord expires
Eliminate Cash Drawer Issues Reduce risk of theft, eliminate handling of money
51. Steps for an Effective Credit Card on File Program
52. How Do You Compare?
NextGen RCM Services offers a
comprehensive Revenue Cycle
Assessment.
This customized report will
provide you with valuable
information about your practice
and how you compare to your
peers on the state and national
level.
53. Getting Your Complimentary Assessment
Schedule a free consultation with
the NextGen Healthcare Director
of Revenue Cycle Management
near you to learn how to qualify
for a free assessment and fix
your revenue leaks.
Email Jill Ryan to set up your
appointment:
jryan@nextgen.com
55. Thank you
Contact information if you wish to have a conversation with
James Muir
James Muir
VP of RCM
Email: JMuir@NextGen.com
Mobile: 801-633-4444
LinkedIn: www.linkedin.com/in/puremuir/
57. What Exactly Does NG RCM Offer?
NextGen RCM helps clients
address these challenges &
others via:
• Account Management &
Oversight
• A Tailored Solution
• Access to the Full Suite of
NextGen Solutions
58. Your NextGen RCM Account Manager:
• Is your Client Liaison for all issues & resolutions
• Is responsible for monitoring the overall
performance of your account (oversight)
• Will explain & help you understand all KPIs &
Reports discussed in your regularly scheduled
meetings.
• Has access to specialist teams & resources
within NextGen to evaluate & resolve any
specific issues.
59. Account Manager Functions Can Be Broken
Down Into Four Areas
1. Oversight
– Financial Performance
– Operations
– Best Practices
2. Guidance
– Establishing Practice Goals
– Addressing Outstanding & New Items/Issues
– Addressing Items Impacting Revenue
3. Education
– Call Center Statistics
– Training
– Policy & Procedures
– Payer Notifications
4. Ongoing Support
– Systems & Software
– Integration & Technical
– Changes in practice environment
60. NextGen Account Managers Follow Our
Proven-Successful Protocol
1. Identify goals in order to understand needs & recommend
appropriate action;
2. Determine Key Performance Indicators (KPIs);
3. Utilize Measurement Tools to Benchmark Performance;
4. Meet & Review Regularly;
5. Adjust as needed based on Strategic Goals, Payer Mix, Market &
Practice Environments.
Your NextGen Account Manager is committed to making the full use of
NextGen resources to serve you & help you achieve your goals.
61. Key Performance Indicators
• Days in AR
• Net Collections
• Gross Collections
• Charges - Trending by Month & Year
• % of Insurance over 90 days
• Denial Rate
• Tailored KPIs
62. Financial Performance Report Areas
• Summary Dashboard
• Production
– Charge & Procedure Volumes
– CPT Utilization (Top Codes, New Codes)
• Cash Flow
• AR Aging Analysis
• Claims Management
– Unbilled Encounters (should always be zero)
– EDI Volumes/Trends
– Pending Claims
– Are claims on hold? Why?
• Payer Analysis
– Denials
– Reason Codes
– Contract Compliance
• Patient Collections (including amounts sent out t
agencies)
• Credits - Both Insurance & Balance
• All tailored management areas
– Every client has specialized focus areas
63. Tailored Solution
Because each client is unique with different
capabilities and staffing levels:
• NextGen RCM will tailor the service areas to
match the client’s need.
64. End to End Revenue Cycle Management
(Typical Deployment)
SYSTEM ADMINISTRATION, PM DATABASE CONFIGURATION, WORKLOG MANAGER, TRAINING, CLIENT CUSTOMER SERVICE
CHARGE
ENTRY
INBOUND SERVICE
AUTHORIZATION
SCHEDULING
CHECK-IN REGISTRATION
POS COLLECTIONS
ASSIST WITH
CHARGE CAPTURE
ACCOUNT
MANAGEMENT/
OVERSIGHT
PRE-SERVICE
POINT OF
SERVICE
POST-SERVICE
CLAIM
RECONCILIATION
BILLING &
COLLECTIONS
REFERRAL
MANAGEMENT
INSURANCE ELIGIBILITY
VERIFICATION
ANALYSIS
PATIENT STATEMENTS
& CORRESPONDENCE
CODING SERVICES
CLAIM SCRUBBING
CLEARINGHOUSE
EDITS
CLAIM SUBMISSION
EDI & PAPER
PAYMENT
POSTING ERA
& PAPER
CLAIM
RESOLUTION
PATIENT
CUSTOMER SERVICE
A/R MANAGEMENT
INSURANCE
FOLLOW-UP
DENIAL MANAGEMENT
& RESOLUTION
APPEALS
MANAGEMENT
REFUNDS &
OVERPAYMENTS
A/R FOLLOW-UP
DELINQUENT ACCOUNTS
CONTRACT
MANAGEMENT
FINANCIAL
RECONCILIATION TO
BALANCE MONTH/DAY
PERFORMANCE
REPORTING
DASHBOARDS
DATA WAREHOUSE
REPORTING
INSIGHT
REPORTING
TRANSITION TO
EXTERNAL COLLECTIONS
CODING AUDITS
CREDENTIALING/
PROVIDER ENROLLMENT
= RCM Services
= Client
= 3rd Party Vendor
CARE
MANAGEMENT
CLINICAL DATA
MANAGEMENT
VIRTUAL CLINICAL
DOCUMENTATION
ENHANCED CARE
DELIVERY
CARE
COORDINATION
65. End to End Revenue Cycle Management
(Tailored Deployment)
SYSTEM ADMINISTRATION, PM DATABASE CONFIGURATION, WORKLOG MANAGER, TRAINING, CLIENT CUSTOMER SERVICE
CHARGE
ENTRY
INBOUND SERVICE
AUTHORIZATION
SCHEDULING
CHECK-IN REGISTRATION
POS COLLECTIONS
ASSIST WITH
CHARGE CAPTURE
ACCOUNT
MANAGEMENT/
OVERSIGHT
PRE-SERVICE
POINT OF
SERVICE
POST-SERVICE
CLAIM
RECONCILIATION
BILLING &
COLLECTIONS
REFERRAL
MANAGEMENT
INSURANCE ELIGIBILITY
VERIFICATION
ANALYSIS
PATIENT STATEMENTS
& CORRESPONDENCE
CODING SERVICES
CLAIM SCRUBBING
CLEARINGHOUSE
EDITS
CLAIM SUBMISSION
EDI & PAPER
PAYMENT
POSTING ERA
& PAPER
CLAIM
RESOLUTION
PATIENT
CUSTOMER SERVICE
A/R MANAGEMENT
INSURANCE
FOLLOW-UP
DENIAL MANAGEMENT
& RESOLUTION
APPEALS
MANAGEMENT
REFUNDS &
OVERPAYMENTS
A/R FOLLOW-UP
DELINQUENT ACCOUNTS
CONTRACT
MANAGEMENT
FINANCIAL
RECONCILIATION TO
BALANCE MONTH/DAY
PERFORMANCE
REPORTING
DASHBOARDS
DATA WAREHOUSE
REPORTING
INSIGHT
REPORTING
TRANSITION TO
EXTERNAL COLLECTIONS
CODING AUDITS
CREDENTIALING/
PROVIDER ENROLLMENT
= RCM Services
= Client
= 3rd Party Vendor
CARE
MANAGEMENT
CLINICAL DATA
MANAGEMENT
VIRTUAL CLINICAL
DOCUMENTATION
ENHANCED CARE
DELIVERY
CARE
COORDINATION
66. 90% of Fortune 500 Companies
Outsource Payroll
• 75% of all Non-core
function are outsourced by
the Fortune 500
• Allows management to
focus on core competencies
• The same revolution is
happening to Accounts
Receivable
Source: First Sun HR, June 2013
67. Medical Landscape
Facts
44% of new medical clinics now fail within 3 years
– Bradley Univ, University of Tennessee Research 7/27/2013
83% of physicians have considered leaving practice because of
Obamacare.
– Doctor Patient Medical Association, 2012
50-60% of physicians are employed by hospitals now & 75 percent of
physicians will be employed by hospitals by 2014.
– Merritt Hawkins Review of Physician Recruiting Incentives, 2013
Why?
Declining reimbursements (65%)
Rising costs (57%)
– 5 straight years in a row (source: MGMA)
Affordable Care Act (Obamacare) (48%)
ICD-10 & Coding/documentation changes (44%)
– Practice Profitability Index Report, 2013
More than 20% of physician time is spent on administration &
30% of physicians spend 1/3 or more of their time on administrative tasks.
– Practice Profitability Index Report, 2013
68. What do docs see as the solution?
• Top 3:
– 1. Billing/Collections Processes, 2. Technology, 3. Staffing
• Only 9% of physicians describe their staff, technology, &
processes as “very effective”
• 18% of medical practices plan to outsource in the next year
– Practice Profitability Index report 2013
69. #1 Regulatory & Compliance Burdens Continue
to Increase: Summary
• Meaningful Use
• ICD10
• Affordable Care Act
• PQRS
• Value-based Payment Modifier (VBPM)
• HIPAA Omnibus Rule
• New 1500 Claim Form
“2014 brings a perfect
storm of regulatory
compliance issues”
- American Academy of Family Practice
70. #2 Operating Costs Continue to Rise Summary
• #1 Challenge for Group Practices
– 2013 MGMA Survey
• Rising costs top challenge for six-straight years.
• Medical Practice Profit is low: 12.81%
– Source: Profitcents Jan 2014
• Payroll & Benefits outweigh all other expenses combined
• Support staff costs up 10.2% over past 12 months
– Source: MGMA 2013 Cost Survey
• Salary for Biller/Coders up between 5-9.7% in 2013
– Source: 2013 AAPC Salary Survey
• Staff turnover is up 4.7% from 2012
– Average turnover rate in 2013 29.4%
– Source: Nobscot Corp
• Billing staff hard to find. Unemployment 1.7% compared
to 7.4% national average
– Source: US Department of Labor 2013
71. #3 Provider Reimbursement Continues to
Decline Summary
Both Commercial & Government
Reimbursement Declining
– Average commercial reimbursement fell
nearly 9%
– 2012-2013, for all new & established office
visits
That's on top of the 10% decline that
occurred between 2011 & 2012.
– Source: Physicians Practice's 2013 Fee
Schedule Survey
Medicare payments cut 2% across the
board due to sequester
Government Penalties are Mounting
– eRx
– PQRS
– Meaningful Use
– Value-based Payment Modifier
72. #4 Patient Collections has Become Mission Critical Summary
• 30-35% of revenue now coming from patients
• Source: Source: intuit 2012, MGMA 2012, McKinsey & Company 2013
• Adoption of High-deductible plans increasing
– 1/3 of US workers already have high-deductible plans
– ACA Exchange plans also high-deductible
– Average deductible on health exchanges $2,500
• Source: Medical Economics Dec 2013
• ACA loophole places collection burden on practice
• Practices historically less effective at collecting patient
balances
– Practices collect only 21–50% of patient balance not collected at time of
service.
• Source: McKinsey & Company 2010, Successehs study - Increasing Patient
Collections: A Study on Patient A/R - Oct. 2013
• % of patient responsibility too large to compensate with cost-
cutting
• Collections agencies recover only tiny portion of bad debt
– Only 13.8% of balances turned to collections are collected
• Source: American Collectors Association (ACA)
• Patient less likely to pay after encounter
– Patient only 40% likely to pay after day of service
– Receivables lose 5% value per day
• Source: McKinsey & Company 2013
12%
19%
24%
32%
35%
0%
10%
20%
30%
40%
2002 2007 2009 2012 2013
% of Revenue From
Patients
% of Revenue From Patients
Source: intuit 2012, MGMA 2012, McKinsey & Company 2013
