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Hospital Performance Improvement
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
Rethinking Supply Costs: Good to Great

by Philip Trent, VP of Business Development, CHC Supply Trust

 

Many rural hospitals today — health care providers whose mission is to serve their community’s health care needs — are apprehensive about their own financial health. Increasing expenses, decreasing reimbursement and declining patient populations and hospital admissions place these hospitals at risk, threatening financial viability.

 

Behind salaries, supplies are the second-highest expense for hospitals. By reducing supply costs and better managing the supply chain, a hospital can move its savings margin from good to great.

 

CHC Supply Trust, the supply chain services arm of Community Hospital Consulting, works with hospitals to help them evaluate potential savings opportunities by uncovering “hidden” dollars to offset shortfalls due to reimbursement cuts and reduced payments. Unlocking supply chain savings can support mission-critical objectives such as equipment upgrades, development projects or hiring additional staff as necessary.

 

Supply chain support services to help hospitals reduce costs while prioritizing clinical quality and patient safety through CHC Supply Trust include:

  • Supply Chain Consulting
  • GPO Access Only (a GPO for community hospitals with preferred pricing formerly available only to their bigger counterparts)
  • Customized Support Services Agreement
  • Outsourced Materials Management.

CHC Supply Trust delivers access, savings, and support

 

Teaming up with community hospitals, CHC Supply Trust offers a Complimentary Supply Spend Analysis. Whereas annual savings have averaged greater than 10 percent, recent CHC supply spend analyses have identified savings opportunities reaching 15 to 20 percent. Along with 100 percent of GPO rebates returned to participating facilities, CHC Supply Trust hospitals can keep their bottom lines healthy.

 

For example, 25-bed Community Hospital in McCook, Nebraska previously bought its supplies and services from a nationwide hospital network. As part of the network’s supply contracting company and GPO, Community Hospital was subject to volume-based tier pricing and paid approximately 35 percent more than larger hospitals for orthopedic implants. By purchasing those same items through CHC Supply Trust in FY 2013, savings on orthopedic implants alone totaled $334,000. Today Community Hospital continues to see approximately 18 percent savings annually on its supply spend.

 

About the Supply Spend Analysis process

 

It’s easy to get started on your Complimentary Supply Spend Analysis. Follow these simple steps:

  1. Sign the CHC Supply Trust confidentiality agreement (we protect the confidentiality of your data).
  2. Provide 12 months of medical and surgical supply data in Excel format (easily available by contacting distributers who have this information in a standardized report already).
  3. Provide 90 days of pharmacy supply data in Excel format (from their wholesaler).

With this information, CHC Supply Trust will conduct your Complimentary Spend Analysis and calculate how much your hospital can save by accessing preferred pricing through our GPO for the exact same items you already buy. No MMIS mining is required. We will provide you with a letter template requesting your pharmaceutical wholesalers’ and med/surg distributors’ reports, which can be generated with a few mouse clicks.

Tags: Hospital Performance Improvement, Supply Chain, Supply Spending
Billing and Collections: Whether or Not to Outsource

by Alice Fleetwood, CHC VP Revenue Cycle

 

Many rural hospitals find it a struggle to achieve positive cash flow and maintain enough days cash on hand to meet their capital and operational needs. This intensifies the importance of ensuring that patient accounting processes, especially billing and collection, are performing at optimal levels.

 

One option many turn to for managing this process is to outsource billing and collections functions. This effort may be seen as a way to improve accurate and timely billing of patient accounts, lower costs, and improve collections. The CHC Consulting Revenue Cycle team is often called upon to evaluate the pros and cons of outsourcing compared to maintaining a hospital-based employed business office.

 

CHC’s experienced staff has assisted hospitals in improving the entire Revenue Cycle process by helping to determine the best solution, avoid common pitfalls, and achieve a hospital’s cash goals. Here are some insights and best practice tips for evaluating whether outsourcing is right for your facility.

 

Define the Need.

 

Based on your business needs and in-house capabilities, determine what can be improved and maintained internally and what would benefit from outsourcing. For instance, evaluate each of the following functions:

  • Billing 
  • Cash posting
  • Account Follow-up
  • Appeals
  • Patient balances
  • Credit balances

Assess Departmental Billing Skills.

 

A keen understanding of Medicare and Medicaid billing requirements is essential, supported by regular claims management system edits. Having an experienced and strong Medicare biller is essential.

 

Review your organization’s billing and collections functions – determine which tasks could benefit from outsourcing.

 

  • Examine insurance balances. Go over payments and payer mix, starting with Medicare and Medicaid A/R to assess the percentage of payments made in less than 30 days. Because these payers are prompt when billing is handled correctly, timely collection is a good indicator of your hospital’s internal capabilities.
  • Appeals. Will you handle the first appeal in-house? For a second appeal, could an outsourcing group provide services not offered locally, such as an attorney or clinical services support?
  • Which categories of A/R might be the most appropriate to subcontract? Motor vehicle accidents (MVAs) for patients without a third-party payer, or workers’ compensation accounts with pending legal concerns are often outsourced due to legal filing and state compensation laws.
  • How long will you need outsourcing services and why? Do staffing concerns or system conversions make outsourcing selected services a reasonable alternative for a specified period?
  • Consider the responsibilities, which will remain at the hospital level. Some of the most common needs for outsourcing include support for customer service, financial counseling, scanning and managing correspondence, and coordination with other departments to resolve concerns.

Evaluate Results.

 

Managing your vendor extends beyond relationship management. Measure the results. Is your outsourcing partner collecting the needed cash? They should be accountable for all accounts you’ve agreed on — not just the “easy” ones. — Follow up through tracking metrics, audits and surprise on-site visits.

 

Consider the Cost.

 

For hospitals with strong internal resources, it’s key to weigh potential staff reduction savings against the loss of revenue the hospital will experience with outsourced collections. Compensation arrangements vary and may include:

  • A percent of total collections. These are typically based on the age of the account and the effort needed to achieve collection.
  • The number of accounts. A fee based on the number of accounts worked (not often preferred by vendors).
  • Hourly rates. The challenge with this method is in assessing and evaluating effectiveness of collections vs. cost.

Choosing the “right” outsourcing partner is rooted in trust. Select a team who understands your needs – ; an organization committed to a shared relationship. Discuss the scope of the outsourcing and define specific Revenue Cycle metrics with your contractor. They must be able to meet or exceed the stated goals, including cash targets and A/R aging metrics.

 

Learn more about CHC Financial Improvement Services including assistance with outsourcing.

Tags: Hospital Performance Improvement, Outsourcing, Revenue Cycle
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

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