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									Session 5:
Academic Medical Center
Revenue Cycles
Session 5:
Academic Medical Center
Revenue Cycles
Part 1: Sponsored Research Revenue Cycle
Part 2: Patient Care Revenue Cycle
Part 3: Tuition Revenue Cycle



Session 4 - Financial Reporting
AGENDA
Introduction                                                          15 Mins

Part 1: Sponsored Research Revenue Cycle                              60 Mins

Break                                                                15 Mins
Part 2: Patient Care Revenue Cycle Processes & Controls: A
                                                                      45 Mins
Closer Look
Break                                                                15 Mins

Part 2: Patient Revenue Cycle at CU & Case Studies                    60 Mins

Part 3: Tuition Revenue Cycle                                         30 Mins

TOTAL                                                              240 Mins




                                                             November 2004   Page 3
GOALS AND OBJECTIVES
 – Revenue Cycles
    • Understand the key processes that make up these revenue cycles
    • Understand the controls that can be instituted and monitored within the revenue
      cycle process
    • Understand potential pitfalls associated with various key processes




                                                                     November 2004   Page 4
CUMC: 2003-2004 Source of Operating Funds
Total = $1.2 Billion




 Note : Other includes gifts, endowment, patent and miscellaneous revenues


                                                                             November 2004   Page 5
 Part 1
 SPONSORED RESEARCH
 REVENUE CYCLE
The sponsored research funding cycle begins with a program announcement
by a granting agency and ends with the final progress report and financial
close-out. Investigators prepare applications which are approved by their
institution and the granting agency performs peer review and scoring. A
notice of grant award is issued and the principal investigator begins
conducting research. Post-award activities include financial monitoring to
ensure funds are spent in accordance with program goals and objectives.




                                                                             November 2004   Page 6
CUMC: SPONSORED RESEARCH FUNDING




                         November 2004   Page 7
  SPONSORED RESEARCH
  REVENUE CYCLE
                                  Program announcement

    Final Reports & Closeout                          Application preparation

  Progress Reports
                                                           Institutional review
Institution Request
                           Post Award     Pre Award          Application submission
Reimbursement
                           Functions      Functions         Peer review and scoring
 Award Adjustment

  PI expends funds;                                        Notification of
  Institution Monitors                                     pending award

     Cost center created
                                                  Award negotiation
                                  Award issued

                                                                   November 2004   Page 8
SPONSORED RESEARCH
REVENUE CYCLE




                     November 2004   Page 9
SPONSORED RESEARCH
REVENUE CYCLE
  Pre Award Process
  Finding the Money


  – Senior Investigators
      •   Know about announcements
      •   Should need minimal support


  – Junior Investigators
      •   Access to announcement databases (e.g. Community of Science)
      •   Need support




                                                                 November 2004   Page 10
SPONSORED RESEARCH
REVENUE CYCLE
  Pre Award Process
  Application Preparation


  – Generally prepared by the PI
  – Guidance from research administration office on:
      •   Sponsor format and forms
      •   Necessary regulatory approvals
      •   Sponsor due dates
  – Scientific content may be reviewed by senior investigator




                                                                November 2004   Page 11
SPONSORED RESEARCH
REVENUE CYCLE
  Pre Award Process
  Application Preparation


  – Some institutions provide grant writing support and “mock” peer review
      •   Effectiveness needs to be assessed
  – Grant applications generally are reviewed differently than contract
    applications
      •   “Best Effort” vs. Procurement




                                                               November 2004   Page 12
SPONSORED RESEARCH
REVENUE CYCLE
  Budgeting Considerations

  – Institutional policies
  – Program announcements
      •   PI effort
  – NIH Grants Policy Statement
      •   Modular Grants policies
  – Federal cost principles
      •   OMB Circular A-21
  – Cost accounting standards
  – Departmental budget




                                    November 2004   Page 13
SPONSORED RESEARCH
REVENUE CYCLE
  Award Budget

  Award Budget = Direct Costs + F&A Costs




                                            November 2004   Page 14
SPONSORED RESEARCH
REVENUE CYCLE
  Criteria for Budgeting and Charging a Direct Cost

  – Some simple maxims
      •   The budget should represent the best intentions of the investigator
      •   Direct costs charged should represent those costs necessary to meet the
          project’s scientific and technical requirements
      •   The relationship between the charge and the science should
           – Be “clear and close”
           – Costs should support the project’s purpose and activity
  – To be charged to an award, a direct cost should be included in the awarded
    budget, or the cost must be permitted within rebudgeting authority granted
    by the sponsor
  – The cost must not be restricted by the sponsor




                                                                       November 2004   Page 15
SPONSORED RESEARCH
REVENUE CYCLE
  Pre Award Process
  Institutional Reviews


  – To ensure compliance requirements are met for
      •   Human / animal subject use
      •   Research safety and hazardous materials management
      •   Facilities
  – That the budget is appropriate for research proposed
  – That budgets costs are consistent with institutional practices
  – To identify agency restrictions and cost share
  – That the application is complete
  – Provides assurance to the institutional official signing the application that
    the scientific and administrative requirements have been met


                                                                  November 2004   Page 16
SPONSORED RESEARCH
REVENUE CYCLE
  Pre Award Process
  Submission of the Application


  – Submission can be
      •   Electronic
      •   Manual
  – Institutional systems may have
      •   Common database
      •   Shared with
           – Central Office of Research Administration
           – Finance




                                                         November 2004   Page 17
SPONSORED RESEARCH
REVENUE CYCLE
  Pre Award Process
  Sponsor Peer Review and Scoring


  – Applications are reviewed for scientific merit and the research goals of the
    agency
  – Priority scores are often used, e.g., NIH, based on:
      •   Significance
      •   Approach
      •   Innovation
      •   Investigator track record
      •   Environment and facilities
      •   Representation of population to be studied
      •   Reasonableness of the proposed budget
      •   Adequacy of proposed protection for humans, animals, and the environment


                                                                   November 2004   Page 18
SPONSORED RESEARCH
REVENUE CYCLE
  Pre Award Process
  Award Negotiation


  – Limited negotiation effort with federal sponsors
      •   Generally a unilateral cut: Feds argue grants are “assistance”
      •   Contracts require extensive cost justification
  – Greater negotiation effort with non-government sponsors
      •   Indirect costs
      •   Cost reimbursement
      •   Intangible costs
           – Technology transfers, e.g., patent ownership, licensing
  – Coordinate with Central Office of Research Administration




                                                                       November 2004   Page 19
SPONSORED RESEARCH
REVENUE CYCLE
  Post Award Process
  Award Issued


  – About 20%-25% of applications are awarded
      •   Renewals generally higher
  – Award is made to the institution, shared responsibility between Institution
    and PI for proper project administration
  – Terms and conditions are specified on the notice of grant award




                                                                November 2004   Page 20
SPONSORED RESEARCH
REVENUE CYCLE
  Post Award Process
  Federal Awarding Mechanisms


  – Research and Training Grant
      •   Federal assistance providing money, property, or both to an eligible entity to
          carry out an approved project or activity
  – Cooperative Agreement
      •   Substantial federal programmatic involvement with the grantee, e.g., clinical
          trials or multiple site projects
  – Contract
      •   Mutually binding legal relationship between the contractor and the government
          for procurement of goods and services
           – Most restrictive of all award mechanisms
           – Most often used by Department of Defense and NASA




                                                                         November 2004   Page 21
SPONSORED RESEARCH
REVENUE CYCLE
  Post Award Process
  FAS Account Created


  – Budgeted in accordance to expenditures of approved project
  – Direct expenditures
      •   Salaries and wages of personnel
      •   Lab supplies and materials
      •   Equipment
  – F&A (Indirect) expenditures
      •   Assigned to the project through the government negotiated overhead rate
           – Facilities and operations
           – Other administrative support




                                                                     November 2004   Page 22
SPONSORED RESEARCH
REVENUE CYCLE
  Post-Award Process
  Reimbursement Methods


  – Letter of credit
      •   Used for federal agencies awarding grants and cooperative agreements
  – Vouchers
      •   Used for federal agencies awarding contracts
  – Billing
      •   Used with non-federal sponsors
      •   May be cost reimbursement or payment for completed clinical trial study
          participant
  – Whatever mechanism is used, consideration has to be given to cash flow
    and monitoring receivable amounts



                                                                      November 2004   Page 23
http://www.cumc.columbia.edu/research/




CUMC Faculty and Research Information

Research Administration, Electronic Res Admin (RASCAL), Office of Grants and Contracts,
University & Campus Profiles, Faculty Profiles, Shared Equipment/Core Facilities, Campus
Research Activities, Research Courses and Seminars, Publications, Policies and Procedures

Research Funding

Funding Databases, Funding Information by e-mail, Award Programs, Grant-Related
Publications, Sources of Funding Information

National and International Research Resources

Links to Funding Agencies: NIH, Private Agencies, and others Grant Writing Tips, Electronic
Forms, Grants Management, Bio & Medical Research Ethics, Clinical Trials, Intellectual
Property/Tech Transfer, Commercial Institutions, Professional Societies




                                                                           November 2004   Page 24
http://www.cumc.columbia.edu/research/faculty.htm

                              | Office of Research Administration/Office of Grants and Contracts |
                                  | CU's Electronic Research Administration System (RASCAL) |
                                     | Columbia University & Health Sciences Campus Profile |
                                | Faculty Profiles | Shared Equipment & Core Facilities Directory |
                                            | Research Activity and Sponsored Projects |
                                               | Courses and Seminars | Publications |
                                          | University Research Policies and Procedures |



Office of Research Administration/Office of Grants & Contracts
Manual of Policies and Procedures
Research Administration Forms
Office of Grants & Contracts, IRB, IACUC, Environmental Health and Safety, Radiation Safety, Columbia Innovation
Enterprise, Office of the Treasurer & Controller, Purchasing Office
Research and Grants Journal
Monthly listing of funding opportunities in the biomedical and behavioral sciences; including those from federal agencies, state
and local governments, voluntary health organizations, and foundations. Available in web-based and hard-copy formats.




                                                                                                       November 2004      Page 25
Manual of
Policies and Procedures
http://www.cumc.columbia.edu/research/manual/ogcm2598.htm

                                         Columbia University
                                       Health Sciences Division
                                    Office of Grants and Contracts
                                               Manual of
                                        Policies and Procedures
                                         TABLE OF CONTENTS
             | 1. Introduction | 2. General Information | 3. Preparing the Application |
     | 4. Application Submission Procedures | 5. Post-Award Administration | 6. Close-Out |
1. Introduction
2. General Information
    – 2.1 Types of Sponsored Projects
         •   2.1.1 Grants
         •   2.1.2 Contracts
         •   2.1.3 Research Subcontracts or Consortium Agreements
         •   2.1.4 Fee for Service Contracts
         •   2.1.5 Cooperative Agreements
    – 2.2 How is a Sponsored Project different From a Gift?
3. Preparing the Application


                                                                             November 2004   Page 26
Research Funding
http://www.cumc.columbia.edu/research/funding.htm
Research Funding
•Research and Grants Journal                     •Research Funding Databases
•Research Funding Information by e-mail          •Award Programs with a Limited No. of Allowed Applications
•Award Programs Reviewed and Funded Internally   •Award Programs Specifically for Equipment
•Honorific Awards                                •Grant-Related Publications and Other Sources of Funding Information
•Links to Funding Agencies                       •Writing a Grant Proposal


Research and Grants Journal
Monthly listing of funding opportunities for research, training, and service activities in the biomedical and behavioral sciences; including
those from federal agencies, state and local governments, voluntary health organizations, and foundations. Funding opportunities are listed
chronologically by deadline, then alphabetically by funding agency.

Word and PDF (Adobe) Versions
These Word (PC) and PDF (Adobe) Versions of the Research and Grants Journal contain active e-mail and web links.
January 2004 Deadlines: Word (PC); PDF; Listing of Funding Agencies
February 2004 Deadlines: Word (PC); PDF; Listing of Funding Agencies
March 2004 Deadlines: Word (PC); PDF; Listing of Funding Agencies
April 2004 Deadlines: Word (PC); PDF; Listing of Funding Agencies
May 2004 Deadlines: Word (PC); PDF; Listing of Funding Agencies
June 2004 Deadlines: Word (PC); PDF; Listing of Funding Agencies
July 2004 Deadlines: Word (PC); PDF; Listing of Funding Agencies
August 2004 Deadlines: Word (PC); PDF; Listing of Funding Agencies
September 2004 Deadlines: Word (PC); PDF; Listing of Funding Agencies
October 2004 Deadlines: Word (PC); PDF; Listing of Funding Agencies
November 2004 Deadlines: Word (PC); PDF; Listing of Funding Agencies
December 2004 Deadlines: Word (PC); PDF; Listing of Funding Agencies

Web Version
To access: Login to Rascal, Columbia University's web-based research administration system, with your University network ID (UNI) and
Password. Select “Finding Funding”, then “View Research and Grants Journals”.




                                                                                                                        November 2004   Page 27
Faculty & Research:
Grants Management
http://www.cumc.columbia.edu/research/grants.htm

                                                                  Faculty & Research:
                                                                  Grants Management
Columbia University
•Columbia University Medical Center's Manual of Policies and Procedures
•Research Administration Forms
               Office of Grants & Contracts, IACUC, Environmental Health and Safety, Radiation Safety, Columbia Innovation Enterprise, Office of the
               Treasurer & Controller, Purshasing Office
•Administrative Information for Grants & Contracts Applications
•Information on NIH's Modular Grant Program
•Information on NIH's Non-Competing (Type 5) Grant Progress Reports
•Support of Graduate Research Assistants on research grants
•Subcontracts
                   Slide presentation on Subcontracts and Subawards
•Training Grants
                   Slide presentation on Pre-award and Post-Award Management of Training Grants
•Support of Graduate Research Assistants (GRAs) on Research Grants
      •   Slide Presentation
      •   PDF version of slides
•University Research Policies and Procedures
•Comprehensive Research Funding Information
Federal Policies and Regulations
•Code of Federal Regulations
•Travel




                                                                                                                           November 2004          Page 28
BREAK




        November 2004   Page 29
Part 2A
COLUMBIA UNIVERSITY PATIENT CARE
REVENUE CYCLE
The patient care revenue cycle involves preparing for a
patient encounter, interacting with patients during a patient
encounter, capturing and recording services rendered and
processing claims and managing a patient’s financial account
to zero balance resolution.




                                                                November 2004   Page 30
COLUMBIA UNIVERSITY
PATIENT CARE REVENUE CYCLE
                                       ENCOUNTER                COMPLIANCE
                                        CHARGE                 BILLING/CODING
                                        CAPTURE/                   REVIEW
                                         CODING                                            CLAIM
                FINANCIAL                                                               DEVELOPMENT
               COUNSELING                                                                    &
                                                                                         SUBMISSION




  CHECK IN /                                                                                           PAYMENT
REGISTRATION                                                                                           POSTING




  SCHEDULING/
   REFERRAL                                                                                        FOLLOW-
  MANAGEMENT                                                                                         UP




                         CONTRACT
                                                                                 REJECTION
                       MANAGEMENT/
                         PROVIDER                  PATIENT ACCESS                 & DENIAL
                       CREDENTIALING                CYCLE BEGINS                PROCESSING




                                                                                             November 2004   Page 31
PATIENT CARE REVENUE:
INTERSECTION OF PATIENT CARE AND
TEACHING
Medicare Program:
   – Began in 1967
   – Two trust funds:
      • Part A for hospital and other facility
        services (eg, nursing home)
      • Part B for provider and other outpatient
        services
   – Intermediary Letter (I.L.) 372 : Federal
     guidance for teaching providers
     establishing conditions under which
     providers can teach residents
     (reimbursed under Part A) and provide
     patient care (reimbursed under Part B)
     at the same time.




                                                   November 2004   Page 32
WHO BILLS FOR WHAT?
HOSPITAL vs. PROVIDER SERVICES
Hospital Services           (billed by NYPH)     Provider Services (billed by CUMC)
• Inpatient hospitalizations                     • Daily provider visits and consults to hospitalized
                                                   patients
• Ambulatory surgeries
                                                 • Surgeries and administration of anesthesia
• Outpatient diagnostic testing (facility,
  supplies, equipment and support staff costs)   • Office visits and office consults
• Outpatient physical, occupational and          • Office-based diagnostic testing (eg, EKGs)
  speech therapy
                                                 • Provider interpretation of diagnostic tests
• Outpatient clinics (facility, supplies,          performed in a hospital
  equipment and support staff costs)
                                                 • Provider diagnostic and treatment services for
• Emergency room services (facility                patients seen in the hospital outpatient clinic,
                                                   emergency room or skilled nursing facility
• Skilled nursing and home health services


                    Hospital                                            Provider
                     Claim                                              Claim




                                                                                November 2004    Page 33
CONTRACT MANAGEMENT
 – Objectives
    •   Provider establishes contracts with their significant payers to determine claims
        processing, payment and rejection terms and conditions
         – This often requires the establishment of rates for particular services
         – Providers must regularly evaluate the reimbursement rates to ensure that they are
           being reimbursed appropriately




                                                                                November 2004   Page 34
PROVIDER CREDENTIALING AND
RECREDENTIALING
 – Objectives
    •   Evaluate credentials of potential or existing providers to ensure that appropriate
        licenses and certifications are accurate and up to date
         – Valid state license to practice and prior sanctions against licensure
         – Education and Training Board Certification
         – Drug Enforcement Agency (DEA) Certification
         – Verification of clinical privileges
         – Malpractice coverage and malpractice history
         – National Practitioner Database Query
         – Medicare/Medicaid Sanctions
         – Application processing for Medicare, Medicaid, Blue Cross/Blue Shield, and other
           insurance companies
    •   Re-credentialing typically occurs ever 2 years at CU




                                                                               November 2004   Page 35
SCHEDULING/REFERRAL MANAGEMENT
 – Objectives of Scheduling/Referral Management
    – Appropriately identifying the service to be rendered
    – Determining a provider who can provide the service (based on that
      person’s treatment schedule, insurance enrollment status, and
      qualifications)
    – Initiating a pre-registration process by obtaining a minimum data set of
      patient demographic information
    – Communication with patient’s regarding payment expectations and
      referral requirements


    – Columbia Best Practice:
        – Use IDXtend (institutional billing system) for scheduling of appointments
        – Collect minimum data set of demographic and insurance information for pre-
          visit insurance verification



                                                                     November 2004    Page 36
INSURANCE VERIFICATION…
A CRITICAL PRACTICE
 – Objectives
    – Obtaining and verifying coverage prior to rendering services


    – Minimizing bad debt by contacting the patient prior to service to address
      any problems or limitations with coverage
    – Improving patient satisfaction by
        – Minimizing the amount of time spent registering patients “on the spot”,
          therefore reducing patient wait times and increasing patient satisfaction
        – Managing patient expectations regarding their out-of-pocket obligations




                                                                     November 2004    Page 37
INSURANCE VERIFICATION
   – Verification of coverage
       – Effective date of coverage
       – Types of benefits available
       – Coverage Limits – Yearly/lifetime
       – Authorization requirements
       – Provider participation status
       – Billing address
       – Patient responsibility (deductible and/or co-payments)
   – Types of verification procedures
       – Phone call
       – Internet
       – Electronic system eligibility check (Medicaid)


   – Columbia Best Practice: Centralized Insurance Verification Unit


                                                                  November 2004   Page 38
CHECK IN
 – Objectives:
    • Beginning or completing registering of a patient
    • Identifying missing information
    • Obtaining provider referrals from patient
    • Collecting co-payments and deductibles
    • Administering Advance Beneficiary Notices (ABNs)
    • Administering assignment of benefits
    • Provide patient privacy notice




                                                         November 2004   Page 39
FINANCIAL COUNSELING
 – Objectives:
    • Discussing, in advance, how patients will pay for their out-of-pocket
      responsibilities.
        – Payment plans
        – Discounts based on financial need
    • Helping patients work through some eligibility/coverage issues in order
      to ensure that the services to be provided are covered
        – Pre-existing conditions issues
        – COBRA
        – Lack of authorization
        – Out of network services




                                                               November 2004   Page 40
ENCOUNTER CHARGE CAPTURE/CODING
 – Objectives:
    – Provider must complete charge capture forms for each service rendered
      which includes the patient’s name, medical record number, billing
      account number, identification of procedure codes that should describe
      services rendered and diagnosis information that should describe the
      patient’s diagnosis
    – Staff enters charges accurately, timely and to the correct account so
      that services are billed and reimbursed appropriately


    – Columbia University Best Practice:
        – 24-48 hours within date of service




                                                              November 2004   Page 41
COMPLIANCE BILLING/CODING REVIEW
 – Objectives:
    – Control mechanism to ensure that billing information is supported by
      documentation in the medical record
        – Comparing clinician documentation in the medical record to the procedure
          and diagnosis codes assigned by the clinicians/coders
        – Performed prospectively and retrospectively
        – Random selection of certain areas, 100% review in other areas




                                                                  November 2004   Page 42
CLAIM DEVELOPMENT & SUBMISSION
 – Objectives
    – Scanning data through a series of pre-defined edits to identify coding
      and billing discrepancies or missing information that would prevent a
      claim from passing claim edits
    – Reviewing and resolving edit reports of claims that contain errors.
    – Review the lists and resolving any errors.
    – Submitting “clean claims” to third party payers for processing
    – Reviewing and reconciling clearinghouse reports which then forwards
      electronic claims to appropriate third party payers
    – Reviewing electronic acknowledgements that claims were received


    – Columbia Best Practice: Department responsibility for the weekly
      evaluation of claim edit reports and “working” claims to get them to pass
      claim edits.


                                                              November 2004   Page 43
PAYMENT POSTING
 – Objectives
    – Posting of payments to patient accounts after payment has been made
      is vital to ensuring an accurate accounts receivable
        – Payment is posted timely, accurately, to the correct account to reduce A/R
          follow up
        – Payments may include zero payments and the posting of a rejection/denial
          code
        – Payments may include self-pay as well as insurance payments
        – Electronic as well as manual payment posting processes
    – Posting contractual allowances in concert with payments
        – Ensure that allowance codes are utilized appropriately


    – Columbia University Best Practice
        – 1-2 days of receipt of payment



                                                                    November 2004   Page 44
FOLLOW UP
 – Objectives
    – In person, phone, and written communication with patient, the
      “responsible party", or insurance companies regarding unpaid patient
      account balances
    – Determination that claim was sent to correct insurance company and
      that it is being processed
    – Each claim may have multiple payors - primary and secondary
      insurance companies, patient
    – If internal collection efforts fail, the account may be outsourced to a
      collection agency
    – Credit balances are resolved by issuing refunds to patients and
      insurance companies




                                                                 November 2004   Page 45
REJECTION & DENIAL PROCESSING
 – Objectives
    – Evaluating claims that have been rejected or denied.
        – Discussions with the clinician that rendered the service
        – Reviewing billing system claim information to determine whether incorrect information
          was entered (either demographic, insurance, procedure code or diagnosis information)
        – Determining whether appropriate pre-authorization was obtained prior to the service
          being rendered. If the service was authorized, was the authorization number submitted
          with the claim


    – Rebilling the claim with corrected information or contacting the
      insurance company to resolve or appeal the claim.
    – Evaluating accounts for potential administrative write-offs (e.g. late
      filing, unauthorized service)




                                                                           November 2004   Page 46
QUANTIFYING THE OPPORTUNITY:
EXAMPLE OF DENIAL DISTRIBUTION BY
REASON

       Total
                                        4%        13%
      Denials             20%
       $1.6M                                                      5%

                2%



                    11%
                                             By Volume

                            9%                          36%


      Registration              Data Collection               Benefit Verification
      Related/Included          Coding Related                Provider Enrollment
      Claim Issue               Other



                            * Hypothetical example
                                                                         November 2004   Page 47
BREAK




        November 2004   Page 48
Part 2B
COLUMBIA UNIVERSITY PATIENT
CARE REVENUE CYCLE




                         November 2004   Page 49
HISTORICAL INFORMATION ABOUT COLUMBIA
FACULTY PRACTICE REVENUE CYCLE

• 575,000 Annual Faculty Practice Outpatient Visits; 55,000 Inpatient Admissions
• 30 years ago, most CUMC physicians managed patient revenue independently and “owned” the
economics
• Over time CU departments developed faculty practice plans with their own full-time faculty:
     Practice plans promoted program collaboration across departments;
     Clinical revenue generated supports academic mission & research initiatives
• Up until 1993 departments billed and collected on a multitude of billing systems
• In 1993, IDX was installed as the enterprise-wide billing system that became a common platform for
faculty across CU clinical departments
• Common billing system more efficiently manages revenue cycle in ways such as:
     Interfacing with other CUMC information technology systems;
     Providing shared information for better monitoring of managed care contract compliance
     Scrubbing and submitting cleaner claims for faster payment turnaround and lower percentage of claim denials
• Future IDX enhancements also being developed, such as:
     Electronic patient eligibility
     Payor contract module
     Web based software version




                                                                                                 November 2004      Page 50
COLUMBIA UNIVERSITY
PATIENT CARE REVENUE CYCLE
Training Internal Control Priorities
–Cash Management
–Credit Balances
–Write -offs
–Charge Capture




                                       November 2004   Page 51
COLUMBIA UNIVERSITY
PATIENT CARE REVENUE CYCLE
Cash Management
–Use of Lockbox and Electronic Funds Transfer
–Secure Time of Service Cash Receipts
–Timely Deposits and Payment Posting
–Cash Reconciliation Procedures




                                                November 2004   Page 52
COLUMBIA UNIVERSITY
PATIENT CARE REVENUE CYCLE
Credit Balances


–Work all credit balances within 60 days of identification
   – (30 Days Best Practice)



–PREVENTION!
   – Identify and correct root causes of credit balances




                                                             November 2004   Page 53
COLUMBIA UNIVERSITY
PATIENT CARE REVENUE CYCLE
Write-off Policies


–Use standard set of transaction codes for administrative, bad debt, small balance
write-offs
–Ensure that appropriate approval mechanisms are in place for management review
of account write offs




                                                                   November 2004   Page 54
COLUMBIA UNIVERSITY
PATIENT CARE REVENUE CYCLE
Charge Capture/Charge Entry


–Ensure timely capture of charges into billing system.


–Ensure accurate recording of charges into billing system




                                                            November 2004   Page 55
COLUMBIA UNIVERSITY
PATIENT CARE REVENUE CYCLE
Faculty Practice Revenue Management


–Faculty Practice Revenue Management Policies & Procedures issued Fall 2004:
   – Website:   http://www.cumc.columbia.edu/facultypractice/policies/




                                                                         November 2004   Page 56
COLUMBIA UNIVERSITY
PATIENT CARE REVENUE CYCLE
   Charge & Payment Payor Mix of Columbia Faculty Practice Groups on IDX




                                                                November 2004   Page 57
COLUMBIA UNIVERSITY
PATIENT CARE REVENUE CYCLE
  Clinical Revenue Improvement Project
  Introduction and Background
  – Timeline
  – Participants
  – Stockamp Consultants




                                         November 2004   Page 58
COLUMBIA UNIVERSITY
PATIENT CARE REVENUE CYCLE
  Clinical Revenue Improvement Project
  Goals
  – Create “Hub & Spoke” Responsibility/ Accountability Model (Culture
    Change)
  – Establish Faculty Oversight & Leadership
  – Implement a Consistent Set of Efficient Business Practices Across All Units
  – Maximize Revenue
  – Improve Internal Controls
  – Improve Employee Satisfaction
  – Improve Patient Satisfaction.
  – Improve Provider Satisfaction
  – Data Driven Management: Weekly & Monthly



                                                              November 2004   Page 59
COLUMBIA UNIVERSITY
PATIENT CARE REVENUE CYCLE
  Clinical Revenue Improvement Project

     Clinical Revenue Office
     •   Accounts receivable follow-up: New approach , New Tools & Training
     •   Coordination with CPPN
     •   Insurance Verification
     •   Patient Call Center
     •   Coordination with Departments




                                                                   November 2004   Page 60
COLUMBIA UNIVERSITY
PATIENT CARE REVENUE CYCLE
  Clinical Revenue Improvement Project

     Department Practice Access Sites: “Front-End” Re-Engineering
     •   Process Redesign
     •   New Approach & New Tools & Training
     •   Securing Patient Visits Before they occur




                                                             November 2004   Page 61
    PATIENT REVENUE CYCLE PROCESSES
               FRONT END:
    Revenue Cycle Process       Process       Work Driver /               Job Aids                   Management Reporting
                                 Owner       Process Control



1   Appointment Scheduling                 Patient / Physician   Minimum Data Set Criteria;   ONTRAC Exception Report; Staff
    /Registration             Department                         FSC Selection Reference      Performance Reviews
                                           Phone Call            Sheet


2   Insurance Verification                                       Situation Response           ONTRAC Securing Sponsorship
                              CRO          ONTRAC Worklist       Guidelines; FSC Selection    Summary; IV Ineligible Report; Staff
                                                                 Reference Sheet; Passport    Performance Reviews; IV Productivity
                                                                                              Report

3   Authorization/Pre-                                           Situation Response           ONTRAC Securing Sponsorship
    Certification/ Referral   Department   ONTRAC Worklist       Guidelines; FSC Selection    Summary; Auth Productivity Report;
                                                                 Reference Sheet; Passport    Staff Performance Reviews


4   At Risk Decision                                             Situation Response           ONTRAC At Risk Decision Report
                              Department   ONTRAC Worklist       Guidelines



5   Point of Service Check-                                      Situation Response           ONTRAC Securing Sponsorship
    in                        Department   ONTRAC Worklist       Guidelines; FSC Selection    Summary; Rejection Report; Staff
                                                                 Reference Sheet; Passport    Performance Reviews




                                                                                                         November 2004           Page 62
     PATIENT REVENUE CYCLE PROCESSES
                 BACK END:
    Revenue Cycle Process     Process       Work Driver /              Job Aids               Management Reporting
                               Owner       Process Control



6   Coding and Charge                    Charge Tickets;                              Charge Lag Reports; Staff Performance
                            Department                                                Reviews
    Capture
                                         Encounter Forms


7                           Department   Charge Tickets; IDX                          TRAC Summary; TRAC Billing WIP
    Billing                              Edit List; QUIC List                         Report



8                           Department   QUIC List, TRAC        Situation Response    TRAC Summary; TRAC Follow-up WIP
    Denial Processing       and CRO      Worklist,              Guidelines, WebCis,   Reports; Staff Performance Reviews
                                         Correspondence         Passport, NeuroNet


9                           CRO          TRAC Worklist          Situation Response    TRAC Summary; TRAC Follow-up WIP
    A/R Follow-up                                               Guidelines, WebCis,   Reports; Staff Performance Reviews
                                                                Passport, NeuroNet


1                           Department   Remittance Advice                            Cash Report; TRAC Summary; Staff
0   Cash Posting                                                                      Performance Reviews




                                                                                                    November 2004        Page 63
COLUMBIA UNIVERSITY
PATIENT CARE REVENUE CYCLE
  Clinical Revenue Improvement Project

     Data Driven Management
     •   Weekly management meetings
     •   Faculty Oversight Committee
     •   Performance standards, metrics and benchmarks




                                                         November 2004   Page 64
Columbia University Revenue Cycle
                  Key Performance Indicator Dashboard
                            Dec 2004 – Feb 2005
                            CRO (6 Departments)

                                                                                                  Goal
      Indicator          Baseline      December       January      February     February Goal
                                                                                                 Variance


Cash Receipts           $10,846,767   $12,637,130   $12,975,524   $11,976,046   $11,936,309      $39,737

A/R Days                   112.9         85.4          85.0          85.1           70.0          -15.1

A/R > 365 Days            31.4%         15.1%         13.8%         14.0%          15.0%          1.0%

                                                                                                   -
Billing WIP             $13,340,683   $7,202,456    $7,300,560    $6,623,850     $5,878,854     $744,996

Charge Lag Days             18            18            22            20             5                -15

Pre-registration (Min
Data Set)                  N/A           74%           80%           80%            90%           -10%


Pre-service Secured        N/A           78%           89%           86%            92%               -6%




                                                                                      November 2004         Page 65
COLUMBIA UNIVERSITY
ORTHOPAEDIC SURGERY – Case Study



BEFORE July 2000
   12 independent physicians, average staff of 3 per office, 5 major locations
   Each maintained their own charts, appointment protocols, billing fees and
    office policies



SINCE July 2000
   Major initiative to centralize all work flow processes




                                                                   November 2004   Page 66
COLUMBIA UNIVERSITY
ORTHOPAEDIC SURGERY – Case Study



Created teams:
Medical records
Appointment scheduling
Surgical scheduling
Secretaries
Billing and collections
Front desk reception




                                   November 2004   Page 67
COLUMBIA UNIVERSITY
ORTHOPAEDIC SURGERY – Case Study

•Physicians were polled as to their preferences and templates were created as to the needs of each
physician - how long should a new patient be scheduled for, are x-rays needed first, what types of
patients will they see, what insurance plans do they participate in, what equipment is needed in the OR
for a surgery.

•All charts were centralized and a standard chart format established (what is included and where in the
chart). There is one chart per patient seen by the group.

•Secretaries are shared one for each 2 physicians.

•There is one appointment scheduling phone number created for all physicians.

•Front Desk Teams (including a front desk biller) are set up at the 5 major locations, where they are
trained to collect demographic info, referral forms, HIPPA forms, research questionnaires

•Billers, upon check-out, collect copays and past due balances and post charges and payments at time
of service.




                                                                                         November 2004    Page 68
COLUMBIA UNIVERSITY
ORTHOPAEDIC SURGERY – Case Study
Today:
  – 17 physicians with a centralized staff of 67.
  – Higher expenses but revenues increasing even faster
  – Reduced charge delays and billing rejections because of attention to front
    desk
  – Ability to add physicians without adding staff
  – Better referrals, no missed phone calls, filing up to date
  – Maximized use of the operating room




                                                                  November 2004   Page 69
COLUMBIA UNIVERSITY
ORTHOPAEDIC SURGERY – Case Study


TODAY:
  – A/R is 67 days (vs. CU goal of 70 and actual of 88 days in September 2004)
  – 3 day charge lag (vs. CU goal of 5 days and actual of 17 days in September
    2004)
  – 90% of patients have secured billing information before they arrive (vs. CU
    goal of 92% and actual of 73% in September 2004)




                                                                  November 2004   Page 70
Part 3
COLUMBIA UNIVERSITY
TUITION REVENUE CYCLE

The tuition revenue cycle involves a continuum of activity from
student recruitment to matriculation, including billing and
collection. This includes the student application, interview and
screening process. Tuition rate setting and financial aid
considerations are also key components.




                                                                   November 2004   Page 71
COLUMBIA UNIVERSITY
TUITION REVENUE CYCLE

         Cash        FAS            Recruitment

                                                       Inquiry



                                                         Application
   Collection
   Cash
   Financial Aid
                                                   Interview       Applications
                                                                   Acceptances
                                                                   Yield
                                       Acceptance
                   Registration /
                   Billing             Financial Aid



                                                          November 2004    Page 72
CUMC ADMISSIONS
  College of Physicians & Surgeons                            Mailman School of Public Health




   School of Dental & Oral Surgery                                     School of Nursing




                                     Admit Rate    Applications
                       LEGEND:       (left axis)   (right axis)                     November 2004   Page 73
COLUMBIA UNIVERSITY
TUITION REVENUE CYCLE
 Tuition Setting Metrics


 – Demand / yield
 – Student retention
 – Economic trends
 – Socioeconomic mix of applicant pool
 – Availability of financial aid
 – Affordability of competition
 – Public opinion of quality of education
 – Track record of graduates




                                            November 2004   Page 74
COLUMBIA UNIVERSITY
TUITION REVENUE CYCLE
 Net Tuition Revenue Example


 Gross Tuition                                $10,000,000
 Less: Institutionally Funded Financial Aid   $ 3,000,000
 Net Tuition Revenue                          $ 7,000,000


 Tuition Discount                                    30%




                                                            November 2004   Page 75
COLUMBIA UNIVERSITY
TUITION REVENUE CYCLE
 Financial Aid Considerations


 – Tuition / Aid
     •   Low / Low
     •   High / High
 – Need based
 – Merit based
 – Family / student contribution
 – Employer reimbursed tuition
 – Competition
 – Loan availability
 – Net Tuition Revenue




                                   November 2004   Page 76
COLUMBIA UNIVERSITY
TUITION REVENUE CYCLE
 CUMC Sources of Student Support
 Total Cost (Tuition, Living, Fees)




                                      November 2004   Page 77
Appendix
GLOSSARY




           November 2004   Page 78
GLOSSARY
  • Bad debts Bad debts are amounts considered to be uncollectible from accounts
    and notes receivable which were created or acquired in providing services.
    "Accounts receivable" and "notes receivable" are designations for claims arising
    from the rendering of services, and are collectible in money in the relatively near
    future.
  • Charity allowances Charity allowances are reductions in charges made by the
    provider of services because of the indigence or medical indigence of the patient.
    Cost of free care (uncompensated services) furnished under a Hill-Burton obligation
    are considered as charity allowances.
  • Coinsurance The amount a patient is required to pay for medical care in a fee-for-
    service plan after the patient has met the deductible. The coinsurance rate is usually
    expressed as a percentage. For example, if the insurance company pays 80 percent
    of the claim, the patient pays 20 percent.




                                                                       November 2004   Page 79
GLOSSARY
  • Co-payments are payment sharing amounts that the patient is responsible for as a
    result of the coverage the patient has with the insurance company. Patient co-
    payment amount usually are applied to each visit and range from $5-20 per visit.
    Patients may also have co-payment amounts may also represent a percentage of
    allowed charges
  • Courtesy allowances Courtesy allowances indicate a reduction in charges in the
    form of an allowance to providers, clergy, members of religious orders, and other as
    approved by the governing body of the provider, for services received from the
    provider. Employee fringe benefits, such as hospitalization and personnel health
    programs, are not considered to be courtesy allowances.
  • Covered Expenses Most insurance plans, whether they are fee-for-service, HMOs,
    or PPOs, do not pay for all services. Some may not pay for prescription drugs.
    Others may not pay for mental health care. Covered services are those medical
    procedures the insurer agrees to pay for. They are listed in the policy.




                                                                      November 2004   Page 80
GLOSSARY
  • Deductibles are payment sharing amounts that the patient is responsible for. A
    deductible is usually the first $X dollars per a specified period (usually per year)
    which the patient is responsible for.
  • Normal accounting treatment: reduction in revenue Bad debts, charity, and
    courtesy allowances represent reductions in revenue. The failure to collect charges
    for services rendered does not add to the cost of providing the services. Such costs
    have already been incurred in the production of the services.
  • Preexisting Condition: A health problem that existed before the date your
    insurance became effective.
  • Reasonable and Customary Charges Most insurance plans will pay only what
    they call a reasonable and customary fee for a particular service. If your doctor
    charges $1,000 for a hernia repair while most doctors in your area charge only
    $600, you will be billed for the $400 difference. This is in addition to the deductible
    and coinsurance you would be expected to pay.




                                                                          November 2004   Page 81
GLOSSARY
 – Types of Insurance Coverage
   • Indemnity Fee-for Service - This is the traditional kind of health care policy.
     Insurance companies pay fees for the services provided to the insured people
     covered by the policy. This type of health insurance offers the most choices of
     doctors and hospitals. You can choose any doctor you wish and change doctors any
     time. You can go to any hospital in any part of the country.
   • HMO (Health Maintenance Organization): Prepaid health plans. You pay a
     monthly premium and the HMO covers your doctors' visits, hospital stays,
     emergency care, surgery, checkups, lab tests, x-rays, and therapy. You must use
     the doctors and hospitals designated by the HMO.
   • PPO (Preferred Provider Organization): A combination of traditional fee-for-
     service and an HMO. When you use the doctors and hospitals that are part of the
     PPO, you can have a larger part of your medical bills covered. You can use other
     doctors, but at a higher cost.




                                                                      November 2004   Page 82
GLOSSARY
 – Medicare
   • Medicare is the Federal health insurance program for Americans age 65 and older
     and for certain disabled Americans. If you are eligible for Social Security or Railroad
     Retirement benefits and are age 65, you and your spouse automatically qualify for
     Medicare.
   • Medicare has two parts: hospital insurance, known as Part A, and supplementary
     medical insurance, known as Part B, which provides payments for doctors and
     related services and supplies ordered by the doctor. If you are eligible for Medicare,
     Part A is free, but you must pay a premium for Part B.
 – Medicaid
   • Medicaid provides health care coverage for some low-income people who cannot
     afford it. This includes people who are eligible because they are aged, blind, or
     disabled or certain people in families with dependent children. Medicaid is a Federal
     program that is operated by the States, and each State decides who is eligible and
     the scope of health services offered




                                                                         November 2004   Page 83
                     QUESTIONS?




Session 5 – Revenue Cycle
                       COURSE
                     EVALUATION
         Please complete course evaluation form.
                            Session 5




Session 5 – Revenue Cycle

								
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