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Hospital Management
How-to Basics for an Effective Hospital Compliance Program

By Doug Kent, CHC VP Internal Audit/Compliance Officer

 

As healthcare becomes more complex, there is also more emphasis being placed on financial considerations, and on preventing and detecting violations of state and federal healthcare laws. What can your hospital do? Start by creating a compliance program to self-police your hospital and staff activities.

 

Since its inception in 1976, the Office of Inspector General (OIG) of the U.S. Department of Health and Human Services (HHS) has led the charge to fight waste, fraud, and abuse in Medicare, Medicaid, and more than 100 other HHS programs. In 2010, as part of the Affordable Care Act, OIG mandated that all healthcare providers have a Corporate Compliance Program in place as a condition of enrollment for Medicare, Medicaid, and Children’s Health Insurance reimbursement.

 

Along with assuring that needed dollars go to patient care, compliance programs serve to engage and inform employees and community members that your hospital is committed to “doing the right thing.” It’s also key to have compliance policies in place should you ever face regulatory review or inquiry.

 

Here are some best practice recommendations to develop or enhance your hospital compliance program.

 

1. Assemble a compliance committee representing a cross-section of employees. Compliance “belongs” to everyone. It’s a team effort and extends beyond the role of the designated compliance manager or leader. C-suite members, case management, revenue cycle, IT/security, and other employee representatives should serve on your compliance committee. Establish a group charter, meet at least quarterly, and ensure confidentiality of information shared with this group.

 

2. Develop a robust education and training program. Provide compliance education/information as part of new employee orientation. Offer online education courses to meet yearly training requirements on topics including billing and collections, Medicare rules, HIPAA, compliance issues, EMTALA, and conflicts of interest.

 

3. Establish a compliance hotline. Make sure employees know the hotline is an anonymous reporting system assuring the confidentiality and protection of individuals who may come forward; communicate the purpose of this hotline (it’s not an employee “complaint” line).

 

4. Include sanction screenings in your compliance plan. The hospital is required to check state and federal exclusion lists monthly to identify if employees, contractors or third-party vendors have had adverse actions taken against them by federally funded programs. Screenings demonstrate you have a routine process in place to monitor potential compliance issues.

 

5. Define and document conflicts of interest. To protect patients’ well-being and ensure public trust, board and management team members should sign a conflict of interest statement as part of the compliance plan. Keep these documents on file.

 

6. Manage compliance risk issues through ongoing monitoring and auditing. Make sure your compliance work plan includes a continuous control process to keep current on changes in rules, regulations and laws. Your work plan should outline internal controls to comply with these guidelines. For auditing, the approach is more proactive. Steps could incorporate chart review to examine how codes are being used and applied, or charge tracking for certain procedures or supplies.

 

7. Measuring compliance programs. It’s important to measure the effectiveness of your existing hospital compliance program. Authorities recommend that you conduct an internal evaluation yearly to assess your program’s effectiveness, and an external audit every other year with a report back to you that outlines program improvements.

 

For additional compliance education materials see the OIG Compliance 101 resources.

Tags: Hospital Management, Hospital Performance Improvement, Operational Improvement
Ways to Improve Rural Healthcare Delivery in Challenging Times

by Jim Coleman, CHC SVP of Southeast Hospital Operations

 

Rural and community hospital leaders – at the forefront in meeting community healthcare needs – frequently encounter challenges that may significantly impact operations and an organization’s long-term financial viability. From variations in patient mix to marketplace mergers and legislative reform, the environment continues to change.

 

To better position your facility for success, here are some best practice tips to strengthen access to care and delivery of services. Market customization, operational performance, and collaboration opportunities should be at the top of the list.

 

Customize your hospital’s action plan to your market

 

Use market demographics and payer mix data to think “outside the box” – every community is different. What works for one hospital may not be right for another. Adopt a strategic approach to evaluating new services and programs. Here are a few specific ideas that have worked for several CHC Consulting clients:

  • For markets with a high percentage of Medicare beneficiaries, heart disease, diabetes, and pulmonary conditions are highly prevalent, and a majority of those beneficiaries have multiple chronic conditions. If your market includes a high percentage of older adults with diabetes, a wound care program could be an appropriate service offering. To help keep more elderly patients with heart and lung conditions healthy and active, cardiac and pulmonary rehabilitation services may be the answer.
  • For an aging demographic, depression and age-related illnesses often amplify the need for older adults and their families to seek specialized geropsychology care. Consider providing these services in both inpatient and outpatient settings
  • For rural hospitals seeking to increase the frequency and speed of specialty services, telemedicine technology provides clinical healthcare to many remote communities. Telemedicine extends specialized physician care to areas without the need for an onsite physical presence. Telemedicine can be particularly helpful for stroke patients who need prompt neurology services in order to achieve the best possible outcome.

Plan for the future

 

Annual strategic planning is vital to long-term success. The process should include an environmental assessment reviewing marketplace health needs along with medical staff planning. Proactive retention, succession planning and recruitment efforts are especially important in smaller markets where it can take longer to fill vacant positions.

 

Improve operational performance

 

Labor is the largest portion of a hospital’s budget. This means it’s critical to closely monitor and manage labor. Analyze staffing and match your workforce to the services needed; research scheduling options and cross-training opportunities to capitalize on efficiency. Could nurse practitioners, physician extenders or others benefit the hospital or community? In addition to labor, supply costs are one of the fastest-growing hospital cost centers. Carefully review your facility’s potential for savings on supplies and pharmaceuticals through a group purchasing organization (GPO) that specializes in community hospitals. Also, look closely at your revenue cycle for opportunities to improve revenue capture and collections.

 

Team up with area providers and agencies to meet community needs

 

Collaborative efforts including clinical affiliations with other hospitals or systems can improve population health management and care delivery. For instance, an affiliation agreement could bring a needed physician specialist to your community, a reasonable alternative to recruiting and supporting a medical practitioner on a full-time basis.

 

Government support can also improve access to community-based health care to broaden the services you provide. State and federal grant dollars support clinical and preventive services such as mammograms; funding is available for telemedicine services and health information technology as well.

 

Learn more about CHC Consulting solutions including CHC Hospital Operations Services, CHC Strategy Services, and CHC Supply Trust, a GPO just for community hospitals.

Tags: Community Health Needs Assessment, Hospital Management, Hospital Performance Improvement, Operational Assessment , Operational Improvement, Productivity Assessment, Supply Chain
Calling Community Hospitals: A New Era of Opportunity

By Mike Williams,  President and CEO, CHC

As we usher in 2017 with our country’s new administration, it’s not surprising that hospitals, healthcare providers, insurers, and consumers alike are asking “what’s next?” related to healthcare. There’s no question that some changes will occur, although they won’t happen overnight. Many details are forthcoming in the weeks and months ahead.

 

Regardless of the road in front of us, we must continue to position community and rural hospitals in optimal fashion. CHC will be looking at innovative ways to help community hospitals during these times of change, by lending our expertise, and upholding our mission to guide, support and enhance the mission of community hospitals and healthcare providers.

 

Strong community hospitals are critical to the vitality of entire populations, especially in rural environments, because they support both the health and economy of the communities they serve. Here are some top-line recommendations to stay the course for continued success, even with impending healthcare reform changes on the horizon:

  • Assess your market position. As a smaller community hospital, this may be a good time to examine relationship opportunities with additional organizations. Could you benefit from optimizing connections with other providers through affiliations or clinical relationships? Are existing services duplicated in your market? Be creative in exploring new associations to position your hospital confidently and strategically.
  • Reduce operational expenses. Maintain or reinvigorate your existing productivity efforts. Monitor key productivity measures, including FTEs per occupied bed. Do you have the right FTEs at the right place at the right time? Also, consider supply chain optimization from an operational perspective. Are you paying too much? Selecting the right group purchasing organization can help streamline your processes and yield optimal supply savings and support, making this a short-term critical success factor.
  • Evaluate your facility’s clinical strength. Look to your IT department for clinical outcomes documentation, and partner with medical staff members to review opportunities for improvement. Examine your HCAHPS scores to determine if there are ways to enhance patient experience.

Even with health care changes ahead, I’m confident community hospitals can persevere by focusing on and optimizing their strength and position as we welcome the New Year.

 

Learn more about strategies for success moving ahead in 2017.

 

 

Tags: Affordable Care Act, Healthcare Reform , Hospital Management, Hospital Performance Improvement, Operational Improvement, Strategic Direction
Executive Recruitment for Interim Management: Easing the Transition

by Laurie Breedlove, CHC SVP of Human Resources

 

Managing organizational change presents extraordinary challenges, particularly when the change involves replacing a chief executive officer following their departure. For smaller community hospitals in transition, interim leaders can help fill this gap. An interim executive may be someone close to retirement, a leader seeking a different work-life balance, or an experienced, skilled executive unable to relocate for a permanent role where travel is an option.

 

An interim can devote time and attention to their role alleviating work overloads on others, bring objectivity to a new assignment through an unbiased perspective, and bring experience, enthusiasm and optimism to the job. A leader with a desire to effect change and improve financial and clinical outcomes on a temporary, full-time basis can be a valuable change agent, positioning the hospital for success moving ahead and laying the groundwork for recruitment of a permanent CEO.

 

Gary Kendrick, for example, has been a hospital administrator since 1980. Through CHC, he has served as interim CEO for several CHC hospitals, filling a significant void until a permanent CEO has been identified.

 

"Each new hospital is an adventure,” Kendrick says. “The best part about being an interim executive is the opportunity to apply decades of experience as a hospital leader to help steer a hospital's future. There's often lots of work to do, so it's a job that requires rolling up your sleeves to do whatever may be needed. It's a privilege to engage the local hospital Board and work with CHC in several areas. Whether we’re working on improving operations or finances, recruiting a new physician or evaluating how care is delivered, these efforts often go the distance to improve the hospital. When I leave the community, I know they're in a better place."

 

Understanding how to select and prepare for an incoming interim – a CEO or another executive – will help ensure a smooth leadership transition. Here are some “must-have” tips to follow.

 

Finding the interim you need.

CHC has a long tradition of helping hospitals locate and place experienced interim executives to fill key leadership positions until permanent candidates are found. This support is invaluable to hospital Board members, who often have business careers in the community that are not healthcare related. CHC specializes in finding an interim executive with just the right combination of talent and skills to address an organization’s customized need. The result? The hospital benefits from a renewed sense of commitment with a new leader, along with the varied experience they bring to the table.

 

Support for an incoming interim.

Candidates should clearly understand the expectations of the role. The hospital Board should be engaged in clarifying the role of the CEO for an incoming interim; for other executives such as a CFO or CNO the hospital CEO should take the lead in communication. Hospital leaders and managers must perceive the interim as a part of their team ¬– not a “temporary” person.

 

Communicate regularly with key stakeholders.

Steady, ongoing communication between an interim executive and hospital managers is critical, including regular meetings with individual managers and monthly department manager meetings. When an interim executive is placed by CHC Consulting at a client hospital, CHC meets regularly with the interim to support and facilitate hospital operations and initiatives on an ongoing basis.

 

Although change can be challenging, following these ideas can help ease the transition as a new leader arrives. In the long run, the hospital and the community both benefit.

 

Learn more about CHC Consulting Management Services including the placement of interim CEOs and other executives, along with operational assessment services to identify opportunities for operational, clinical and financial improvement.

Tags: Executive Placement, Hospital Management, Hospital Staffing, Interim Executive, Staffing
Three Steps to Help Rural Hospitals Overcome Financial Distress

by Michael Morgan, Director of Due Diligence and Strategic Analysis, CHC

 

An array of issues – from increasing charity care, bad debt and declining reimbursement rates to negative profit margins – create financial distress for rural hospitals. Despite today’s challenging operating environment, many rural hospitals across the country are using a practical approach to grow revenues and control costs.

 

Step 1: AWARENESS

Know the signs and symptoms of declining financial health

 

How does a hospital reach the point of “no return” where closure becomes inevitable? Were there warning signs along the way? Were they missed? Would the outcome have been different if danger signals had been noted and addressed?

 

Discussions around performance, growth and capital stewardship are at the heart of strategic planning for most health care organizations, and even though financial indicators are a harbinger of financial health, “finance” is often considered the responsibility of the chief financial officer or other “financial” folks. Budgeting is usually department-specific.

 

Like car dashboard warning lights, financial warning signs mean it’s time to sit up and take notice. A regular review of the most important indicators related to an organization’s financial health should be a shared responsibility for the entire health care team. Data points to focus in on include:

  • Look at aggregate volume and provider utilization trends. This data can offer a big-picture perspective to leaders and managers across departments.
  • Share operating ratios, including expenses as a percent of net operating revenue focusing on labor, supplies, and purchased services.
  • Examine labor costs relative to volumes. Is the hospital meeting productivity goals? Look at FTE staffing per adjusted occupied bed targets.
  • Review patient revenue indicators including bad debt percentage and net to gross percentage by payor class. Are there shifts in payor mix that need to be addressed?
  • Study liquidity ratios, such as net days in patient accounts receivable and cash collections as a percentage of net revenue minus bad debts. What steps can be taken to improve cash flow?

Step 2: INFORMATION GATHERING

Identify and assess significant financial indicators

 

Operational best practices include a monthly review by hospital leadership of key measures, many of which are listed above. Procedures should be put in place by the hospital’s finance department, with input from department managers, to produce accurate monthly stats and financial performance metrics to facilitate these periodic reviews. A closer look at financial indicators also should be part of the annual review and planning process. A key to financial improvement for hospitals is clear communication of expectations and goals across the leadership spectrum in order to accomplish desired changes.  

 

Step 3: ANALYSIS & ACTION

Connect the dots for sustainability

 

Once data is available to everyone, the next step is to analyze the root cause. For instance, if inpatient admission volumes are down significantly in a current month compared to the same month in the previous year, the conclusion might be, “We think it went down because there were fewer flu cases this year compared to last year.” That may be true, but speculation can be risky. Do a deep data dive and take the guesswork out of the equation. What were the primary diagnoses of the admitted patients for each time period? Were there any abnormal physician trends? How do observation days this month compare? Understanding the trends and their causes is the key to creating actionable solutions.

 

Regular reviews of key financial indicators can identify operational best practices, support strategic planning efforts, enhance understanding and create accountability. These reviews can confirm or redirect efforts aimed at sustainability. The most critical element of the entire process is answering “why.” Only then can the team develop solutions to improve operating margins and avoid financial distress.

 

Learn more about CHC's Financial Improvement services.

Tags: Affordable Care Act, Healthcare Reform , Hospital Management, Hospital Performance Improvement, Operational Improvement, Strategic Direction

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