Improving Revenue Cycle Outcome: Harnessing the Power of Process Analytics and Automated Workflow April 17, 2015

Improving Revenue Cycle Outcome: Harnessing the Power of Process Analytics and Automated WorkflowApril 17, 2015

Agenda

Introductions

Baseline definitions

Why these solutions are important

Process analytic concepts

Automated workflow concepts

Using BPM as competitive advantage

Applying business rules to drive higher performance

Evolution of revenue cycle

Q&A

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Introductions

© 2015 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 339426

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With us today

Over 20 years healthcare experience

Focuses on Revenue Cycle Redesign, Capital Budgeting and Planning, Vendor Selection and Implementation, and Operational Efficiency and Cost Reduction

Works with community health organizations, large integrated providers, and academic medical centers

Phillip BrooksDirectorKPMG LLP

Baseline definitions


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Baseline: Definitions

Workflow: repeatable patterns of activity that involve a system of resources, roles, knowledgeable worker interaction, and information flow

Automated Workflow: a collection of methods and tools used to document, improve, and monitor business processes as defined by standard workflows

Process Analytics: the ability to access data about individual instances of a process and use that data to monitor, analyze, and improve an organization’s critical operational processes

Business Process Management (BPM): the combination of Automated Workflow solutions that are specifically designed for revenue cycle operations and incorporate Process Analytic concepts to create an interactive system that can automatically prioritize high-value tasks to the right people to improve efficiency and drive down costs



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Have you driven 20 percent of costs out of your revenue cycle over the past five years?

Have you improved net revenue annually?

Have you reduced your headcount by 10 percent?

Have you improved processing times by 50 percent?

If you answered “no” to any of the above questions,you likely need to think about implementing an

automated workflow approach.

Do you need an automated workflow?


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Evolve your revenue cycle into revenue cycle 3.0

RC 1.0 RC 2.0 RC 3.0

Traditional assessments,Recommendations, and

options andImplementation

Due to a change inorganizational focus orchange in personnel, benefits erode over time.

Automated workflowdesign and deployment

Automated workflow allowsfor repeatable, quicker-paced,

and sustainableImprovements, even

when personnel changes, since workflow is hardcoded.

Automated workflowwith process enabled

analytics

Allows for deeper penetrationinto root cause issues andenables automated workflowto perform continuous

monitoring of micro-processesthat contribute to delays inprocessing bills, delays incash flow, loss of revenue,and increase costs.

Using BPM as competitive advantage


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Using BPM as a competitive advantage: Transformation through automation

Business Process Management is not just about managing a defined basket of work activities faster or more efficiently. It is also about improving results.

What can BPM do?

Identify Highest value accounts for follow-up and push them up the queue

Route POS Collections efforts for prescreening by financial clearance staff

Help speed/standardize medical eligibility status processes and tasks

Identify root causes of identified anomalies

Display how a single problem manifests and interrelates across entire revenue cycle ecosystem

Process analytic concepts


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Business need to combine data from multiple systems

Requirement to compare historical and current comparative analysis to understand improvement strategies

Need to make real-time proactive decisions and move away from reactive actions

Must find ways to mitigate revenue at risk

Need to view consolidated revenue cycle operations

Process analytic concepts: Why the need?


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Process analytic concepts: Benefits of using data analytics

Financial Improvement

Root cause analysis of denied claims to reduce at source

Rapid identification of daily productivity performance to take

appropriate actions

Simplify presentation of actionable management

information allowing for faster decision making

Quickly understand process outcomes to make adjustments

Consolidation of data from multiple sources to provide quality scorecards for staff

Job/staff outcomes trending to monitor work outcomes


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Process analytic concepts: Case study #1

Cash goals in the first year of implementationOutpace

Denial and underpayment processing by working active issues in an automated, timely manner

Improve

Future denials through root cause analysis and process improvement

Reduce

Support the centralized business office strategy while also redeploying associates to high-value roles

Equip

Sco

reca

rd

Overview

A not-for-profit integrated healthcare system comprising of 12 hospitals whose net patient revenue is $3.7 billion with total system discharges of 172k.

Problem

Decentralized business offices that did not take advantage of system wide standards and economies of scale. Disparate patient accounting systems.



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BPM is a collection of methods and tools used to document, improve, and monitor revenue cycle processes.

1

2

3

4

5 The processes are monitored to ensure improved outcomes are achieved.

Automation is introduced into the processes wherever possible.

The processes are streamlined through reengineering to fill gaps and eliminate bottlenecks.

The revenue cycle processes are simulated in order to identify gaps.

Revenue cycle processes are modeled to document current state.

=

A B

D

=

E

C

A B C

An undefined, inconsistent, and over-complicated process...

A simplified, consistent, and streamlined process.

BECOMES

Unnecessary steps and task variability are reduced while efficiencies are gained and financial outcomes are improved.

The Process The Result


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Automated workflow concepts (continued)

BPM is used to identify bottlenecks, delays, loopbacks, and insufficientresourcing, then improve efficiency and effectiveness through streamlining activities.

Process bottlenecks are delays and activities that cost an excessive amount of money and/or time.

Delays occur because there is insufficient notification that one activity is finished so that the next one can start.

A process with loopbacks has bad process design: processes should always move forward in time and control.

Insufficient available resource pools to execute an activity can cause a process to be drawn out, costing time and money.


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Automated workflow concepts: Additional benefits

According to Info-Tech Research Group, Over 80% of organizations saw clear benefits as a result of automated workflow implementation.

Reliability: Processes are repeatable, automated, and more streamlined, which helps reduce variability.

Profitability: Aligning RC activities closely with high-value outcomes may positively impact the bottom line, including increased net revenue and ROI.

Improved efficiency: Identifying the next highest value activity for maximum value in a repeatable processes contributes to smoother operations.

Predictability: More projects and tasks will be completed on time with a reduced cost model.

Increased productivity and efficiency: Higher request resolution means that end users have what they need to do their jobs.

Adaptability: Increased flexibility, scalability, to react to changes in the industry.


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Effective BPM consists of a five-step lifecycle to maximize outcomes

1. Modeling

Revenue cycle processes are modeled to document current state.

2. Simulation

The revenue cycle processes are simulated in order to identify process gaps.

3. Streamlining

The processes are streamlined through reengineering to fill gaps and help eliminate bottlenecks.

4. Automation

Automation is introduced into the processes wherever possible.

5. Management

The processes are monitored through process analysis, alerting management when changes are needed and ensuring improved outcomes.

Applying business rules to drive higher performance


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Applying business rules to drive higher performance: case study #2

Overview

A not-for-profit integrated health system with an academic medical center comprising of 7 hospitals whose net patient revenue is $2.3 billion with total system discharges of 108k.

Problem

Lack of technology. Manual processes were inefficient and days in AR were not improving. Operational teams were not making headway against organizational goals.

Sco

reca

rd

Three year risk-adjusted ROI of 435%Outpace

Account representative productivity and patient satisfaction – cost to collect

Improve

Future denials through root cause analysis and process improvement

Reduce

Providing a single source of truth with data to make better management decisions

Equip

Evolution of revenue cycle


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Evolution of the revenue cycle

Loosely Managed

Localized Silo Management

Localized Revenue Cycle Management

Enterprise Revenue Cycle Management

“Systems Thinking” (ToC) and Connected Efficiency and value-driven Big data and guided discovery Net Revenue and actual cost combination

1980 (DRGs) 1990 (APCs) 2000 2010 (ACOs) Today

Highly manual/paper based Charge based blended with

cost + reimbursement

Emergence of “Rev Cycle” vs. Dept focus Denial Management becomes a discipline Get paid the maximum appropriate Net Revenue, cash flow, and overall cost mgmt

RC departments managed independently Improvement initiatives didn’t fully consider

total impact Primarily Cash Flow focus


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What should you do next?

Build appropriate business case to support BPM deployment

Gain insight into revenue cycle processes and drive significant benefits

Evaluate automated workflow capabilities in your current environment

Evaluate Process Analytic capabilities


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In summary

New Business Models

At KPMG, we believe that health plans, providers, and life sciences companies should be thinking beyond transformation and focus more on healthcare “convergence” and the broader implications of operating in a more collaborative and integrated U.S. healthcare delivery model. While transformation of current operations is likely going to be a business requirement, the real question for forward-looking organizations is what role they plan to play in a new and more converged health system.

Questions?


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Contact information

Phillip Brooks, Director, Advisory

KPMG LLP330-329-1269

[email protected]

Thank You

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Improving Revenue Cycle Outcome: Harnessing the Power of Process Analytics and Automated Workflow April 17, 2015