Volume VI Number 3
|The Newsletter of
D E K A Y E Consulting, Inc.
231 Oakview Avenue
Perspectives and Commentary
for Receivables Management
by Allan P. DeKaye, MBA, FHFMA, President & CEO, D E K A Y E consulting, inc.
Having reached the half-way mark of the first year in the New Millennium, many of us sighed a relief when the APC deadline was extended one month until August 1, 2000. For some, the added time will provide an opportunity to fine-tune procedures and double check on the state of readiness. For others, the month's extension will offer little in terms of relief, and instead, prolong the agony associated with an imperfect implementation.
Perhaps the lesson to be learned from this experience is how well prepared we need to be to answer the continuing challenge of A/R management. Just last week, I had the privilege of addressing two sessions at HFMA's Annual National Institute in Orlando, FL. I'd like to share some of the ideas that were presented at the sessions.
In, "So You Want to be a Better PFS Director", I examined a variety of skill sets that are needed to compete effectively and successfully in today's marketplace. "Thought, Speed, Leadership and Agility" are among the attributes that are needed to effect efficient and effective operations. Similarly, in order to effect changes and navigate the rough waters around managed care, compliance and APC hurdles, today's PFS director needs to be a strategist, writer and orator! Similarly, the ability to resolve disputes among disparate groups, and repair systems or workflow can play an important part in building a foundation of strength on which to build.
When joined by my colleague, Sean O'Rourke, Vice President and CFO, Christ Hospital, Jersey City, NJ, we used a case study approach to identify issues that negatively impacted on the cash flow cycle. "Reconnecting Cash Flow Cycle Operations" enabled us to share the consultant/client relationship in providing an independent and objective assessment of operations.
Several evaluative techniques were introduced that allowed for graphic representations of "key indicators of performance" to focus attention on "critical path processes" that are precursors to an improved A/R position. Additionally, the formation of "cash assurance teams," and the use of project management workplans facilitate the assigning of tasks to responsible departments and staff. By setting reasonable time frames and defining "task completion criteria," A/R management staff can take control of processes that require inter-departmental cooperation and coordination.
Both sessions offered realistic and realizable approaches to A/R Management. Active audience participation enhanced the value of the classes.
Over the last six months, I've had occasion to travel Coast-to-Coast, and from North-to-South (and many stops in between). At each locale, organizations and facilities have been eager to hear about my approach to managing the cash flow cycle. Here's hoping, that as the summer progresses, each of you and your organizations will get closer to your objectives. I look forward to seeing and meeting more of you in the second half of the calendar year.
: Ask The Expert
by Allan P. DeKaye, MBA, FHFMA
Q: We are having difficulties justifying to our intermediary the write-off accounts where a return mail "bad address" was written off as a bad debt. Do you have any ideas that could help us?
A: It's hard to argue from an operational standpoint that "return mail" for a bad address isn't reason to "refer the account " for outside intervention. The key wording is "refer out." Should "refer out" be a "write-off" for bad debt. There is certainly an argument for that, especially if the account has minimal demographic data to begin with, no companion accounts, or limited other account history.
But consider the following: The "bad address" could be due to nothing more than a "missing apartment number," "incorrect or missing zip code," or a "transposed building number." Some of these situations are certainly more prevalent in higher density urban areas--but return mail can occur anywhere. An intermediary could make the argument that any of the above noted exceptions are reasonably correctable and bills could be resubmitted, and the normal "dunning collection cycle" could resume.
Rather than "refer the account to collection" immediately upon first receipt of a "bad address" return, a more defensible strategy would be: 1) research the return for oversight correction, and if none found, 2) send the item(s) for skip-tracing--either internally or externally; and if 3) no definitive "good address" is then found, or if one is found and it too is returned "undeliverable," then a more definitive and defensible argument to "write-off" the account as uncollectable at this second juncture can now be made.
It may satisfy the audit reviewer that this extra step overcomes their objection. Again, keep in mind that the uniformity of action across all payer lines of business is required and should be followed.
It, of course, makes good sense, to have a staff training program that emphasizes the importance of good interview skills. This should include confirming or verifying patient address at each inpatient admission or outpatient visit. For more information about staff training and education, see our "Emphasis on Education" section on our web site, and "The Patient Accounts Management Handbook" for more discussion of these topics.
The Contributor's Corner
The ABC's of Communicating with
by Janet H. Davis, BSN, MS, MBA, PhD, RN and Judy A. Coy, BS, MGS, RN
Why is it that there are so often communication barriers between the business "side of the house" and clinicians? The major reason is that business professionals and clinicians come from two very different cultures. Physicians and other clinical professionals are likely to perceive and interpret the business professional’s behavior quite differently than what might have been intended. Your impact comes not from what you intended but as a result of what the clinician perceived. For example, the business professional wears a suit and the clinician wears scrubs. "It’s easy to see who is getting dirty and really doing all the work around here" the RN thinks as she takes her seat at the budget meeting.
Following these ABC’s can help decease communication barriers:
Always stand on the organization's mission. Clinical professionals are interested in the care of individual patients. Emphasize the care, cure and rehabilitation aspects of the mission statement. It provides a common ground for the clinical and business side of health care. Use the mission statement to show how a bottom-line orientation can co-exist with a philosophy of care. For example, a sound financial situation gives the organization the resources to provide patient care overhead. Clinicians focus on maintenance and further development of their own skills rather than broader organizational objectives. Bridge this gap by concretely linking the organizational objectives to the clinician’s priorities. For instance, a mission that speaks of quality of care shows support for staff continuing education.
Beware of business jargon. Many clinicians do not understand business and financial language. For example, a nurse probably is not familiar with what "days in A/R" means. However, due to professional pride the nurse will not ask for clarification. Instead, the nurse will perceive the business professional as arrogant and "not interested in patients." Always define your terms and define them in terms of patient care. For example, "our days in accounts receivable, how long it takes us to get our money, affects our ability to provide specialized services."
Consider the clinical mentality. Clinicians are
trained to have primary allegiance to the patient. They are accustomed to
collegial, where power is shared, rather than hierarchical relationships. In
general, they are present-oriented and have a low tolerance for ambiguity and
uncertainty. Clinical professionals are granted high levels of autonomy
regarding their work. In the case of physicians, autonomy begins in medical
school, continues through residency training and is reinforced every day by the
nature of the work physicians do. Present information with their mindset. Use a
leadership style that is highly participative and considerate of professional
Janet H. Davis and Judy A. Coy can be reached at RNSINC – the Compliance Resource for RNS, (312) 409-3221,
Home Health Care Update
by Andrew B. Shulman, Manager, Holtz Rubenstein & Co., LLP
Over the last three months, recommendations have been made urging HCFA Administrator, Nancy-Ann Min DeParle, to order prompt release of key PPS information so that HHA’s would have more time to deal with the transition from IPS to PPS episodic reimbursement.
Good News!! HCFA released new billing instructions in May. Much of home
health billing will remain the same as today under HHPPS. Essentially, tat means
that HHPPS will operate on the platform of existing Medicare claims processing
systems, including the Common Working File (CWF) and the Fiscal Intermediary
Standard System (FISS). Also, HHPPS will employ claims formats, such as the
paper and electron UB-92 and related transaction formats. HCFA is making as much
advance information as possible to HHA’s and software vendors because it
acknowledges that a July publication of the PPS Final Rule leaves them limited
time to prepare for PPS on October 1, 2000.
HCFA has promises it will redesign its billing system to accommodate and encourage the practice of prompt billing under PPS to assure cash flow for HHA’s. Actual details, however, will not be released in advance of a final rule publication slated for July 1, 2000.
However, while officials from the Health Care Financing Administration indicates no delay, the National Association for Home Care has advanced discussions regarding the development of a PPS contingency plan. A contingency plan would assure home heal agencies of ongoing payments, regardless of any breakdown in the PPS transition. Speculation has arisen, since HCFA announced in early June, a one month Medicare Prospective Payment System for hospital outpatient services. Originally scheduled for July 1, the outpatient PPS is now due to be implemented August 1, 2000. That will give hospitals more time to prepare for the change, from cost-based reimbursement, to a set fee for patient care.
In other industry-related news, agencies continue to shut down or are seeking mergers to bear the costs. Agencies aren’t closing because there’s not enough business, but because they can’t shoulder the cash flow burden and the influx of new regulations coming. Certified home health agencies have evidently been hit the hardest as they rely heavily on Medicare and provide direct services for patients. However, the licensed home health care branch facilities, which supply workers and do limited patient care, such as infusion therapy, are also feeling the pain. Their cash-strapped clients, the CHHA’s, are taking many months to pay their bills, precipitating a cash flow crisis throughout the industry. Home care experts still believe the fixed amount of money for each 60-day episode of care, under the impending PPS system, will still be adequate to cover the costs of the sickest patients. Stay tuned!
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