DeKaye Consulting, Inc. Volume III Number 2

April 1997

The Newsletter of

DEKAYE Consulting, Inc.

231 Oakview Avenue
Oceanside, New York 11572
Phone / Fax: (516) 678-2754

On Target

It Happens
Every Spring

Vital Signs

Quarterly A/R Reporting: "So How Am I Doing?

Former New York City Mayor, Ed Koch, popularized the "So How Am I Doing?" phrase. It’s an appropriate question, and should have meaning to every A/R manager whether hospital, physician or other healthcare provider based. In our previous editions, we have focused on several "Daily Key Indicators" of performance. If you’ve faithfully be following these numbers, then preparing a quarterly report--almost a "report card," if you will, should not be an arduous task--or one filled with surprises!

While your daily key indicator measures should be designed to enable you to keep your hand on the pulse of operations, quarterly measurements allow you to take a more in-depth look at certain measures and trends. Trending analysis is an important tool as it can help you see emerging or established performance patterns.

Painting a Portrait

While trends can be discerned from spreadsheet analysis, virtually any measure can also be presented in graphic format. Pictures can truly be worth a thousand words. In our Five Point Plan for A/R Management we emphasize the important value graphs have. Two of our illustrations appear below. The "caption" to the graph is an important feature as it helps the preparer convey to the reader the conclusion that the data suggests. In these examples the conclusions are clear cut.

Sometimes a pattern is not clear or well defined. This is usually an indication that the factors being studied or examined may not be contributing sufficiently to draw a conclusion. This may be an indication that more detailed study is needed, and direct observation and interviews may be necessary to better analyze the situation.

Trending analysis need not be limited to A/R measures. Productivity, cash collections, claim rejections, as well as worker productivity and goal attainment are good candidates for graphic analysis. Customer satisfaction measures can also be measured and translated into graphic representation. The number of incoming phone calls, bill inquiries, return mail, patient waiting time and pieces of correspondence may be elements you wish to measure. Generally a good time to begin formal measurement is when the amount of negative elements become countable or noticeable. When you are looking to evaluate a particular measure, determining the time frames for data collection is an important factor.

Analyzing Information, Making Changes

If during the course of a month, a quarter or other reporting period, if we do not process the information we have, then we run the risk of missing important evaluations that as managers can have negative impact on operations and the bottom line. It is important to review these indicators and determine if any adjustments to procedural or production workflow is indicated. If corrective action (possibly in the form of re-training, observing or more close monitoring) is initiated, then additional monitoring should be instituted to watch for changes in performance patterns. Sometimes a "wait and see" position is indicated. This may be true following the implementation of a new policy or procedure to see if time will allow the changes to take hold.

Finally, department heads should use these trending reports to determine if they are on target not just for the current period, but to determine if they are on course for the remainder of the fiscal year. Mid-course corrections may need to recognize the fact that we have erred somewhere either in our assumption sets or ability to effectively implement the changes we had in mind. However, it is far better to have identified some shortfall against projection at the beginning of the second quarter of the year--when there is still adequate time to re-implement plans, than to suddenly realize that you are starting the fourth quarter so far from your objective--that you cannot possible make up the difference!

Taking the time each month to answer the question, "So How Am I Doing?" can help you stay on course throughout the year.

Emphasis on Education


High Profile Cases, High Price Tag for Non-Compliance

Perspective and Commentary
The long wait in the doctor’s office.
The incorrect bill in the mail.
Confusion over the referral rules.
Coping with the changes of managed care.

So who’s fault is it? With so much of our healthcare being influenced by the choices made by employers who pay for health insurance premiums, for many of us choosing a physician has become a lot like looking in the yellow pages for the store that has what you want. When asking a managed care representative to assist me in the process of selecting a new primary care physician (my former one had just left the plan), I was told to find one in the directory. When I facetiously asked if I should start at "A" or work back from "Z," I was simply reminded that I should just work from the directory.

While that directory gave me office address and even hospital affiliation, it took several phone calls to determine number of physicians in the group, and whether or not they were board certified and in what specialty, and how many years they were in practice (things that were important to me).

Once selected and assuming the quality of medical care to be there, there is little else to judge a physician or practice but on the way you are treated as a "customer, " not simply a patient. For that reason, the "report card" concept used by many managed care plans should have an influence on physicians and the way they run their offices (read businesses). In the retail industry, customers are lost because of poor client service. The same will hold true in physician offices.

Physicians need to set the agenda for their office staff. The "meet and greet" function, especially for a new patient is consistently overlooked. Did you ever notice the "tag" line on a physician referral report: "thank you for the referral..." Not unlike, "thank you for shopping at ....," but certainly not: "thank you for selecting us as your primary care ...." Here are our office hours, a number for emergencies, and what to do if....."

Further having knowledgeable office staff is important. We, of course expect it of the clinical professionals who assist the physician, why not from the receptionist, the billing staff or the appointment coordinator.

All too often, physicians indicate that they are too busy providing patient care. That’s why if the practice has an office manager, or simply a one or a few support staff, the physician at a minimum needs to convey to them his or her expectation of the way the office should run. And it is also up to patients as customers to advise their physician of the long waits, the inattentive staff or those who lack good customer service skills.

In all fairness to physicians, a lot has changed with managed care: new rules, regulations, and oftentimes more paper work than previously existed. Payments are somewhat less, and the time to collect them considerably longer. Nonetheless, with the ability to change PCPs so easy and encouraged (the managed care plans are concerned about the ratings and the number of "covered lives" they have under contract) that physicians must pay closer attention to the management of their practice.

For practice managers, it is important to balance the training and education of staff in not only task completion, but in attaining and maintaining good rapport with patients. By working closely with the physicians to set expectations and office practice guidelines, patient satisfaction and retention rates should be higher than if no action was taken at all.

While only larger practices may have the resources to conduct patient satisfaction surveys, even an informal patient polling by physicians at the end of each visit might be helpful. Of course, if you already know a problem exists, why not use this as an opportunity to work on the solution rather than allowing it to continue.

Improving office operations and attitudes can have a marked improvement on patient attitudes and satisfaction.

Please click here for more information about the DEKAYE Consulting Inc.
Emphasis on Education Course Curriculum.

The Contributor's Corner

Home Health Care Update

by Andrew Schulman
Carpenter & Onorato, P.C.

The Healthcare Financing Administration has definitely made a commitment to implement a Per-Episode Prospective Payment System for Medicare home health services by the end of 1999. HCFA does acknowledge that the well-documented variation in the amounts of home health service resources that Medicare beneficiaries consume during an episode has not, to this point, been accounted for by the characteristics of patients and their home environments. This has been one major obstacle to the implementation of a PPS for home health care for the last several years. Recently, new contracts have been awarded to research firms nationwide to develop an improved model of the relationship between patient characteristics and home health resources to formulate into a case-mix adjustment system for a nationwide home health agency PPS for Medicare.

While home care remains a "hot" topic at Congressional Budget Hearings, individual state legislative sessions have been held which include proposals for significant rate reductions for home care programs. Medicare reimbursement could be slashed by as much as 20 to 25 percent in an effort to keep the Medicare Trust Fund afloat. Rates for licensed and certified home care providers would be cut dramatically under other state-wide Executive Budget proposals.

The issue of expanding the number of certified home health agencies in New York State has once again been discussed. By updating the current public need formula, an additional 51 new certified home health agency slots might become available, distributed in 21 counties across the state.

Should you wish to discuss this topic further or need more information, please feel free to contact Andy Schulman at Carpenter & Onorato, P.C. at 516-745-0808 or through E-Mail at



by Dan A. McGaffey, Principal, Talmage & Company

Little is known about MultiTest Taker*(MTT) outpatients who originate in physicians offices as diagnostic patients that need to be scheduled at the hospital for several tests at a time. Yet, proprietary statistics show that MTT patients are the single most important outpatient revenue stream for hospitals. MMT patients generate 30% of daily outpatient volume which can represent up to 50% of total outpatient revenues in a hospital facility. MultiTest Takers spend from $600.00 to $l500.00 in one day for tests.

Consider these examples:

Hospital X does not have automated scheduling that does conflict scheduling. When the physicians office calls to book the patient, a MultiTest Taker may have to come back to the hospital on different days because the scheduling system cannot create a back-to-back schedule in one day.

Hospital Y generates a busy senior citizen volume. One spouse parks the car and the other is dropped off at Registration. This spouse does not know what tests - or what physicians - or how many tests. The Registration clerk spend a half hour trying to recreate a schedule. Then, if the tests are not flagged or routed in some way – the seniors go home without getting all the work completed and the physicians do not have the results they need in a timely fashion.

Hospital Z has Multi-Test Takers coming through all day, however, they have not established a monitoring protocol to track MTT patients through the departments. MTT patients end up at the back of each department’s queue which adds to the cumulative wait time and guarantees patient dissatisfaction.

Outpatients measure the cumulative wait time going through the hospital which is the key factor in patient dissatisfaction in today’s market. Patients count up time to find a parking space, registration area wait, and waiting for the doctor. It is not unusual for MTT patients to take 7 to 8 hours in a hospital facility, when in actuality with a compact schedule and speed/check standards tests can generally be accomplished in 3 to 4 hours.

To keep lines from backing up in the first place, providers can level out demand for services by shifting some appointments to later in the day. This issue is a remaining artifact of the paradigm shift from inpatient to outpatient care. Most hospitals schedule work flow without regard to the 8AM to 8PM hours of operation in ambulatory management and cling to the 7AM to 3PM inpatient model. From a service demand perspective, most of the daily business is in the hospital by ll:00AM, and this fact alone is responsible for creating bottlenecks and delays (i.e. patient waiting).

Typically ambulatory facilities are jammed in the morning, volume drops at lunch time, picks up slightly again after 1:00PM and then drops off significantly by 4:00PM.

By reviewing streams of patients that can be scheduled in the afternoon and addressing fasting/non fasting protocols, hospitals can level out service demand comfortably. For example, it is possible to schedule preadmissions testing patients in the afternoon, as well as radiology patients who do not require fasting.

Walk-in diagnostic patients are lengthening wait times also because more physicians want to tell their patients to "go right over" to the hospital. Also, in most markets primary care physicians offices are staying open later in the day for patient convenience.

In order to document the issue, providers should conduct a baseline study of walk-in arrivals for one month and trend data by physician office, physician specialty, time of arrival and day of arrival.

With this data, slots can be left open for walk-in patients based on past demand. From proprietary hospital data nationwide, it has been found that walk-in demand will peak at l0:00AM and again at l:00PM. Once a baseline is established, continuous monitoring can be put in place and appointment slots modified by department to allow for walk-in openings.


Q & A

by Allan P. DeKaye, MBA, FHFMA

Subject: Billing the patient

Q: How much effort we must show before writing off the co-pay & deductible the patient is required to pay after medicare pays, if they have no secondary. What is the minimum amount ?

A: Medicare's "maintenance of effort" requirements indicate that your follow-up efforts for its patient's deductibles and co-insurance must be the same as those efforts you would expend for the any other patient with a self-pay responsibility. Aside from this helping you operationally by having one procedure to follow, we suggest that the following steps be taken to help reduce the amounts that wind up in an aging self-pay category:

  1. At time of initial patient registration, explain to (all) patients that they will have a responsibility for their deductible an co-insurance (and with the increasing penetration of managed care plans, co-payments will also fit into this category). Consider putting together a brochure or other informational notice concerning patient financial responsibility. Many timespatients either don't know, or could use a reminder.
  2. When making appointments for follow-up visits, first check and if appropriate counsel the patient as to any open balances, suggesting that payment is expected (or appreciated) at the next visit. Here your physician should set expectation and policy. Collection guidelines become easier to enforce when the doctor makes clear his or her intention on what they want to achieve.
  3. Offer option for payment. Cash and checks are obvious, but many practices still aren't accepting credit cards. See how much you are writing off or "forgiving" and compare to credit card charges. Cash flow is important, and credit cards are a convenience often overlooked. You can also make it even easier for patients to pre-authorize regular (periodic) charges of amounts--especially helpful for patients who make several visits in a month, or have a large amount that could be conveniently charged over a period of time with a simple form.


Subject: Managed Care Contracts

Q: What are some successful approaches, cost of maintenance, quantified benefits, etc. in identifying managed care contract requirements at the time of registration? What about links from insurance companies to employers?

A: At a minimum, a phone call is better than nothing! Providers who sign major contracts should be requiring that payors/managed care plans support electronic transaction solutions. There are now ANSI standards for Electronic Eligibility Benefit Inquiries and Replies (ANSI 270 & 271). The transaction can support eligibility, extent of coverage, deductible and co-payment, coordination of benefits and utilization management requirements.

Payor/plan capabilities vary, as do providers. However, the impact on operations and accounts receivable can be significant. Payors/plans should be willing to open their databases for dedicated on-line inquiries especially from its major contracted providers. Improvements in patient service and customer satisfaction can benefit all parties.

A recent personal example had me getting a bill from a new PCP, because both the practice billing staff didn't think my plan was accepted, and the payor had a defect in my file on its data base. I got a bill for almost $400 even after I instructed both payor and provider of error. Multiply that by the number of patients (providers and plans) who might wait until the final bill notice, and you have the reason for practice difficulties and unhappy customers.

If MD office called payor instead of just copying the card (after all I was new to the office), then the problem would have been uncovered and probably resolved before everybody expended a lot of energy. Even better, if MD office truly understood plan coverages, it would have helped. There are vendors around the country who suport this technology, and it's more readily available in certain parts of the country.


Subject: Discounted Payments

Q: What about third parties offering discounted payment for services in exchange for payment within 7-10 days. What are the pros & cons?

A: Although prompt payment discounts seem like a "good deal" for providers, they can often cause problems in the administrative implementation. The following factors should be considered:

  1. Are your claims clean? Especially to the payor in question. Merely having a prompt payment discount often creates the expectation that claims will be settled according to the schedule agreed upon. Errant claims will of course slow down the adjudication process, and will often result in an outright denial. If your currently experience unusually high denial rates (either in total or by payor) you should be spending more time on claim accuracy then prompt payment agreements.
  2. How many levels of claim discount are you offering? Many providers offer several rates, generally on a graduated basis, with the value declining over time. We should take a hint from manufacturing: if you offer a discount, make it attractive and make one value for a very prompt turnaround. For example: 10% discount if payment received within 5 business days from bill receipt (if electronically submitted you have the "postmark"). When you start offering differing rates, someone on your staff has to expend time determining which level of discount is to be offered. Worse yet, the payor may have already taken the discount, even if the "days" term is not correct! In order not to lose the operational efficiency after gaining the financial reward, date time frames need to be strictly enforced. Situations like, "its one day late, is it okay?" occur all too frequently.

I think a better approach will be to expend your negotiating time securing an agreement for timely payment within "X" from payor receipt of bill. Unless you have looked at the administrative cost to post the discount and take the prompt payment allowance, you may be giving away more in value (cost of staff time) than recovered in advanced payment.

If a particular payor provides substantial volume, you may in fact be better off with the prompt discount, as long as you can apply it efficiently and they take it consistent with the terms of the agreement.

Don't lead with the prompt payment discount. First, be sure to establish how fast the normal turnaround would be. A payor anxious for a prompt payment discount should first be made to qualify for earning that consideration by establishing itself as a regular timely payor. Then your basis for granting the discount is better established, and less likely to cause administrative disruption.

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