Volume IX Number 3

November 2003

The Newsletter of

231 Oakview Avenue
Oceanside, New York 11572
Phone: (516) 678-2754   Fax: (516) 825-4458
E-Mail: Adkcmpa@aol.com
E-Mail: DKConsult1@aol.com
URL: http://www.dekaye.com

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Vital Signs

First Annual Bench-Marking Report to the Industry on Hospital Patient Financial Services (PFS) Performance and Trends

"Low Average Ranking Scores Indicate Needed Improvements in Cash Collections and Account Productivity"

DEKAYE Consulting, Inc., a Long Island, NY, based consulting firm, has compiled its first twelve-months of reporting (as of August 31, 2003 for data through July 31, 2003) from its PFS Power Rankings (sm) system. There are several measures that have been developed to gauge performance. The Monthly National Average (MNA), which reflects the volatility of the "ups and downs" associated with hospital A/R management, has ranged between 15.0 and 20.0 (out of a maximum monthly score of 30.0). The more stable, Historical National Average (HNA), which re-computes cumulative averages over time, has had a much more limited range of 17.0 - 18.0 during this period. The August 2003 rankings showed a slight improvement as MNA scores increased to 16.8, reversing a two-month decline that reached 15.3 last month. The HNA remained unchanged at 17.2 These relatively low MNA and HNA scores indicate that there is still considerable room for improvement in cash collections and open account productivity. These and other factors contribute to a hospital's improved accounts receivable (A/R) position, and bottom line.

Company President and CEO, Allan P. DeKaye, MBA, FHFMA, indicated that, "The wide fluctuations in monthly scores are reflective of industry problems and performance, some of which have been mastered, while others persist." He went on to add that, "At best, the reporting hospitals have only been able to attain average MNA scores in the high-18 to mid-19 range in only two of the eight months as of August 2003. For half of those months, average scores were in the 15.0-16+ range." Since these are average scores, it is important to recognize that individual hospitals do register higher scores; but also lower ones, as well.

This is evident in the distribution of hospitals by performance tiers. Three tiers were developed. Tier 1 recognizes hospitals whose who have compiled a Hospital Overall Average (HOA) of > 20.0. The HOA is calculated by combining the Hospital Annual Averages (HAAs) for each year a hospital was reporting. A Tier 2 placement occurs when a HOA score falls below 19.9 and the HNA that month. Hospitals fall into Tier 3 when their HOA is below the HNA. These calculations are fluid and change each month. So a hospital in Tier 1 one month may fall to a lower tier based on posting lower monthly scores in successive months; the converse is also true, as hospitals can move to a higher tier with higher MNA scores. Tier 1 has only 10% of the reporting hospitals at August 2003; it had as many as 24% and 26% of the hospitals in May and June 2003, respectively, when the MNA scores for those periods were higher. In order to earn and maintain Tier 1 status, hospital performance needs to be at a consistently high level to achieve an HOA > 20.0.

Mr. DeKaye went on to add that hospitals still needed to improve ability to consistently meet its cash collections goals, and in reducing levels of accounts receivable. In both those areas, hospitals have been less successful during the first eight months of 2003 versus the last four months of 2002. Similarly, their ranking scores have also been less for the same comparative periods when measuring specific reductions in inpatient and outpatient A/R, and in collections for "Commercial and Other Payers" and "Self-Pay and Other" categories. On the positive side, hospitals began improving their productivity as measured by reductions in the number of open inpatient and outpatient accounts each month. Hospitals have still been negatively impacted by increasing backlogs in uncoded medical records causing billing and payment delays.

The hospitals in the North Central region have compiled the highest MNA ranking as of 2003, raising its scores from 13.1 in 2002 to 18.7 in 2003. When examining performance by bed size, the 0-250 category has reached an average 2003 score of 19.2 which is up from 17.4 in 2002. It is also the only category to boast having a hospital reach a perfect 30.0, a score which also helped the North Central region when it was posted in July 2003. The other regions and bed size categories didn't fare as well.

For more information contact us at: email: pfspowerrank@aol.com or call (516) 678-2754. You can also visit our web site at: www.pfspowerrank.com

Perspectives and Commentary

When The Patient Has More Than One Insurance

By Allan P. DeKaye, MBA, FHFMA
President and CEO
DEKAYE Consulting, Inc.

2003, CCH INCORPORATED. All Rights Reserved. Reprinted with permission from CCH Compliance Letter

Link to Article: When The Patient Has More Than One Insurance 

(Article is in .pdf format and requires Adobe Reader)

For more information about our services, or Strategic Alliance Partners, please write to us at: Adkcmpa@aol.com or DKConsult1@aol.com

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D E K A Y E Consulting, Inc.
231 Oakview Avenue, Oceanside, NY 11572  Phone: (516) 678-2754 Fax: (516) 825-4458
URL: http://www.dekaye.com E-Mail: Adkcmpa@aol.com or DKConsult1@aol.com

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