the unique alternative to the big four ® accelerating net revenue analysis and the related month...

The Unique Alternative to the Big Four®

Accelerating Net Revenue Analysis and the Related Month End Close Process

March 21, 2013AAHAM


© 2011 Crowe Horwath LLP 2Audit | Tax | Advisory | Risk | Performance

Topics for Today

Introduction and Assumptions Critical Issues & Risks with Net Revenue Revenue Cycle Analytics (RCA) Overview Fundamentals for GPSR & A/R Valuation Accelerated Monthly Closing Process for Net Revenue Perspective from BayCare Health System Questions?



Challenges Facing Healthcare Finance Executives Soaring patient responsibility

for A/R (growing uninsured, high deductibles/consumerism, etc.)

Increasing number of accounts that are Pending Medicaid and challenges in estimating conversion and related reserves

Difficulty in explaining the impact of changes in prior estimate affecting the current period results How do I explain that we have more

Medicaid contractual than revenue this month?



Challenges Facing Healthcare Finance Executives

Difficulty in quickly projecting net revenue mid-month

Material year end reserve adjustments can have unpleasant consequences

Reporting come from many data sources

Reserve estimation approach needs to be standardized and consistent yet allow for end-user judgment



Financial Reporting, Planning & Monitoring

Provides analytics to:Explain & forecast net revenue

Estimate reserves

Accelerate monthly close process

Identify revenue opportunities

Strengthen internal controls

Designed to support external audit

What is Crowe® Revenue Cycle Analytics?



National perspective on net revenue challenges



Single source of truth for net revenue

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Crowe® Net Revenue Reporting modules

1 - Hindsight Analysis

2 - Monthly Reserve Analysis

3 - Variance Analysis

4 - Net Revenue Budgeting

5 – Revenue Cycle Monitor

1 - Hindsight Analysis

2 - Monthly Reserve Analysis

3 – Net Revenue Analysis

4 - Net Revenue Budgeting

5 – Revenue Cycle Monitor

RCA Modules

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GPSR and Account Receivable Valuation:Hindsight vs. Zero Balance Account Analysis

10


Regular hindsight analysis is fundamental in tracking accuracy of estimation approach and providing supporting data Leverage Historical Data for Real Time Insight Supporting data for current reserves calculation Validation of Historical G/L estimates

Hindsight or “Look-back” Analysis

Hindsight Analysis Overview

11


Example: Hindsight Analysis• Take A/R as of June 30, 2005 and show the actual resolution of those

balances over a period of time (e.g., through June 30, 2006)

Analysis Date 06/30/05Activity Through Date 06/30/06Report TypeBad debt write-offs (9,852,475) Charity care (6,011,683) Contractual allowances (43,630,183) Administrative adjustments (1,653,575) Payments (86,975,177)

(148,123,092)

Remaining balances 1,070,683

All Transactions & Remaining Balances (149,193,775)

Summary Aged Trial Balance - Debits 149,607,742

Charge Variance 413,967 0.28%

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Single hindsight analysis – June 30, 2005

Activity as a % of Gross A/R

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

06/05

Bad debt write-off s

Charity care

Administrative adjustments

Remaining balances

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Two years of analysis – June 30, 2004 & 2005


0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

06/04 06/05


Charity care


Remaining balances

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3 Reference Points – June 2004, June 2005, April 2006


0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

06/04 06/05 04/06


Charity care


Remaining balances

15


Complete Picture -Monthly Hindsight Analysis


-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%


Charity care


Remaining balances

June 2005June 2004

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Example Hospital – 12 Month Hindsight

InpatientAmounts as a % of Gross A/R 08/11 09/11 10/11 11/11 12/11 01/12 02/12Bad debt write-offs 6.1% 6.9% 7.7% 7.6% 8.5% 8.6% 9.1%Charity care 6.2% 8.5% 9.2% 9.7% 10.4% 12.8% 13.3%Remaining balances 6.7% 4.8% 4.8% 4.9% 5.4% 5.5% 5.4%Administrative adjustments -0.2% -0.6% -0.5% -0.7% -1.8% -2.2% -1.9%Denials 7.5% 7.2% 6.3% 5.1% 4.6% 4.6% 4.3%Combined BD and Rem Balance 12.8% 11.7% 12.5% 12.5% 13.9% 14.0% 14.4%Contractual allowances 49.3% 49.2% 49.1% 50.9% 50.2% 48.5% 47.0%Payments 24.1% 23.8% 23.3% 22.6% 22.8% 22.3% 23.0%Bad debt recovery % 1.0% 1.1% 1.3% 1.2% 1.1% 1.2% 1.2%Takeback % -2.6% -2.1% -2.2% -2.7% -2.8% -3.0% -3.1%

OutpatientAmounts as a % of Gross A/R 08/11 09/11 10/11 11/11 12/11 01/12 02/12Bad debt write-offs 8.4% 8.9% 8.7% 9.4% 11.0% 11.0% 10.9%Charity care 5.6% 7.0% 7.9% 7.9% 9.0% 8.7% 8.4%Remaining balances 7.5% 7.9% 8.1% 7.2% 7.5% 7.1% 6.8%Administrative adjustments 0.9% 0.5% 0.2% -0.7% -1.5% -1.6% -1.8%Denials 6.6% 6.8% 6.9% 5.8% 6.0% 5.4% 4.9%Combined BD and Rem Bal 15.9% 16.8% 16.8% 16.7% 18.6% 18.1% 17.7%Contractual allowances 56.2% 54.9% 55.0% 56.7% 54.0% 55.6% 55.7%Payments 14.2% 13.5% 12.7% 12.9% 13.2% 13.3% 14.4%Bad debt recovery % 1.0% 1.0% 2.1% 2.0% 1.9% 1.9% 1.9%Takeback % -0.2% -0.3% -0.3% -0.6% -0.6% -0.5% -0.5%

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Charity Care and Bad Debt considerations• Hindsight data will be best source of supporting data• Determine what is the appropriate hindsight time period

12 months is industry norm Remaining balance should be 3% or less

• Consider updating reserve percentages monthly and no later than quarterly

• Bad debt recoveries Closed A/R should continue to generate cash collections from

agencies Must consider “takeback” in addition to recoveries on Bad Debt and

Inactive Accounts Should mirror Hindsight Ranges

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High Risk Payors• Use hindsight data instead of ZBA data• What are high risk payors?

Examples Self Pay Primary Medicaid Pending Self Pay After Insurance State or local programs

• Focus on historical net realizable value• We typically see 5-10% realization on Self Pay Primary• We typically see 25-35% realization on Self Pay After Insurance• Medicaid Pending realization should be somewhere between Self Pay

Primary and approved Medicaid

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Supporting Data for Current Reserves Calculation181-270 $ 181-270 % 271-360 $ 271-360 % 361+ $ 361+ % Total $ Total %

GROSS A/R $132,858 0.00% $150,128 0.00% $750,517 0.00% $11,716,057 0.00%

ADMI N ADJ USTMENT & DENI AL

($45,696) -34.39% ($28,648) -19.08% ($511,957) -68.21% ($739,712) -6.31%

BAD DEBT & REMAI NI NG BALANCE

($9,178) -6.91% ($2,187) -1.46% $7,086 0.94% ($184,995) -1.58%

CHARI TY $0 0.00% $0 0.00% $0 0.00% ($35,350) -0.30%

CONTRACTUAL ($44,421) -33.44% ($83,881) -55.87% ($172,114) -22.93% ($6,031,412) -51.48%

PAYMENT ($33,563) -25.26% ($35,412) -23.59% ($73,532) -9.80% ($4,724,589) -40.33%

VARI ANCE $0 0.00% ($1,087) -0.72% ($1,436) -0.19% $86,083 0.73%

GROSS A/R $760,907 0.00% $188,955 0.00% $214,711 0.00% $6,809,544 0.00%


$83,639 10.99% $46,157 24.43% $31,566 14.70% $589,543 8.66%


($397,185) -52.20% ($104,299) -55.20% ($95,364) -44.41% ($3,223,615) -47.34%

CHARI TY ($189,293) -24.88% ($102,491) -54.24% ($94,232) -43.89% ($2,925,791) -42.97%

CONTRACTUAL ($205,493) -27.01% ($28,139) -14.89% ($43,413) -20.22% ($995,635) -14.62%

PAYMENT ($52,575) -6.91% ($183) -0.10% ($13,267) -6.18% ($254,047) -3.73%

VARI ANCE $0 0.00% $0 0.00% $0 0.00% $147,788 2.17%

GROSS A/R $880,381 0.00% $336,044 0.00% $622,342 0.00% $3,376,879 0.00%


($33,867) -3.85% ($32,236) -9.59% ($39,919) -6.41% ($178,703) -5.29%


($649,355) -73.76% ($224,437) -66.79% ($319,096) -51.27% ($1,976,647) -58.53%

CHARI TY ($106,978) -12.15% ($16,624) -4.95% ($32,002) -5.14% ($360,968) -10.69%

CONTRACTUAL $66,062 7.50% $4,879 1.45% ($58,846) -9.46% $59,197 1.75%

PAYMENT ($156,243) -17.75% ($67,626) -20.12% ($172,479) -27.71% ($919,758) -27.24%

VARI ANCE ($160,072) -18.18% ($13,441) -4.00% $115 0.02% ($206,713) -6.12%

SELF PAY (SELF)

Self Pay After I nsurance (SPAI )

MEDI CARE PPS (MC)

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Validation of Historical G/L estimatesRCA Hindsight Analysis Trend

* Note Activity is for a one year period and remaining balance is as of one year after period.

Analysis Date 11/30/05 12/31/05 01/31/06 02/28/06 03/31/06Activity Through Date 11/30/06 12/31/06 01/31/07 02/28/07 03/31/07

CONTRACTUAL ALLOWANCE RECONAR7 Contractual allowances (40,516,131) (43,288,305) (48,394,779) (50,796,666) (53,877,022)AR9 Administrative adjustments (2,298,510) (1,638,347) 1,870,696 (2,644,296) (2,475,747)

Total (42,814,641) (44,926,653) (46,524,083) (53,440,963) (56,352,769) G/L AU 1000 Acct 1150-1189 (37,813,807) (40,814,008) (45,030,837) (48,368,244) (52,794,991)

Difference (5,000,834) (4,112,645) (1,493,246) (5,072,719) (3,557,778) % Difference 13.22% 10.08% 3.32% 10.49% 6.74%

CHARITY CARE ALLOWANCE RECONAR5 Charity care (5,485,095) (5,440,271) (5,878,264) (6,361,148) (6,794,930) G/L AU 1000 Acct 1190 (2,987,857) (2,890,226) (2,915,173) (4,023,116) (5,081,727)

Difference (2,497,239) (2,550,045) (2,963,092) (2,338,032) (1,713,203) % Difference 83.58% 88.23% 101.64% 58.11% 33.71%

DOUBTFUL ACCOUNTS ALLOWANCE RECONAR3 Bad debt write-offs (10,140,360) (10,042,184) (10,554,405) (10,796,899) (11,576,133)AR17 Remaining balances (1,457,008) (1,159,877) (1,534,008) (1,493,015) (2,133,792)

Total B/D (11,597,368) (11,202,061) (12,088,413) (12,289,914) (13,709,926) G/L AU 1000 Acct 1200-1219 (17,351,570) (16,983,926) (17,172,655) (19,214,466) (20,882,733)

Difference 5,754,201 5,781,866 5,084,243 6,924,552 7,172,807 % Difference -33.16% -34.04% -29.61% -36.04% -34.35%

NET AR RECONAR13 Payments (73,298,939) (74,085,633) (82,253,294) (84,665,576) (86,906,355) G/L Net A/R (74,593,867) (74,909,264) (82,299,183) (85,248,954) (84,795,586)

Difference (1,294,928) (823,631) (45,889) (583,378) 2,110,769 % Difference 1.74% 1.10% 0.06% 0.68% -2.49%

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Zero Balance Account (ZBA) Analysis Performed on Accounts with Dates of Service in given time period

Generally not less than Three to Six Months, or up to 1 Year. Total Charges = Total Charges to provide robust data sample Parameters used to Increase and Decrease Sample

Large Dollar Account Threshold Inpatient/Outpatient Co/Deductible Threshold Minimum Account Threshold

Must Consider Pricing/Realization Changes• Use of contract modeling system should be considered in the

estimate

RCA Reserve Approach: Hindsight vs. ZBA



Example ZBA data (based on date of service)

Total Charges Payments Payment Percent

Allowance Contractual Percent

Inpatient Aetna (AE) $1,905,281.93 ($1,146,144.92) -60.16% ($691,647.33) -36.30%

BLUE CROSS MANAGED CARE (B) $9,883,564.44 ($4,517,849.34) -45.71% ($5,201,189.20) -52.62%

BWC (WC) $807,472.51 ($315,858.96) -39.12% ($491,424.95) -60.86%

Cigna (CI) $716,527.25 ($421,521.92) -58.83% ($272,600.94) -38.04%

COMMERCIAL TRADITIONAL (CT) $377,850.43 ($167,212.54) -44.25% ($104,360.24) -27.62%

Healthspan (HS) $2,142,776.38 ($1,097,876.13) -51.24% ($1,017,186.93) -47.47%

Humana (HU) $5,039,775.78 ($2,738,267.80) -54.33% ($2,201,457.99) -43.68%

MEDICAID (MD) $2,439,112.91 ($710,587.98) -29.13% ($1,681,962.83) -68.96%

Medicaid HMO (PW) $5,058,116.60 ($1,821,354.90) -36.01% ($3,234,367.73) -63.94%

Medical Mutual (MM) $1,937,489.18 ($969,361.35) -50.03% ($927,821.01) -47.89%

MEDICARE (MC) $40,745,085.89 ($13,870,705.81) -34.04% ($26,707,095.11) -65.55%

MEDICARE HMO (MB) $13,908,555.78 ($4,763,764.79) -34.25% ($8,966,768.34) -64.47%

OTHER (OT) $185,888.66 ($59,327.88) -31.92% ($126,560.78) -68.08%

OTHER MANAGED CARE (OM) $858,835.36 ($537,961.37) -62.64% ($301,916.25) -35.15%

PENDING MEDICAID (PM) (PM) $960,227.64 ($229,379.62) -23.89% ($586,388.81) -61.07%

Self Pay (SP) $2,368,945.21 ($58,369.34) -2.46% ($80,185.52) -3.38%

United Healthcare (UH) $4,305,907.08 ($2,096,523.24) -48.69% ($2,150,105.22) -49.93%

InpatientTotal $93,641,413.03 ($35,522,067.89) -37.93% ($54,743,039.18) -58.46%

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Allowance category Source data

Contractual allowances Zero balance account (ZBA) activity, unless accounts are contract modeled

Administrative adjustments & denials

ZBA activity or hindsight activity (if considerably different from ZBA)

Charity Care Hindsight (trending) data

Bad Debt Hindsight (trending) data

Reserve Approach: Hindsight vs. ZBA

An integrated calculation approach is best practice.

Special Attention Provided to “High Risk” Payors

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Accelerating the Month End Close Process and

Net Revenue Reporting



Fundamentals for the Month End Close Reporting Process

Identify Appropriate Month End Close Team Should Include Finance, PFS & MC Resources IT maybe necessary depending on source of data Make inquiries of revenue cycle & managed care

Develop and Outline Standard Process Process should included Timeline & Checklists Assignment of Reporting & Close Model

Completion Assign Roles & Responsibilities with back-ups Separation of Duties: Preparer vs. Reviewer

Leverage Technology to Accelerate Process Automate, Update & Refresh Assumptions Recast New Assumptions against Prior Period AR Decrease time spent “building” models Increase time spent analyzing and prescribing

People

Process

Technology



Example Month-End Timeline for 2 - 5 Day Close

11/26/2008 - 11/27/2008Update hindsight

trending, prepare

ZBA comparison

11/27/2008 - 11/28/2008Conduct pre-close

meeting with:- Accounting

- Reimbursement- Managed Care

- PFS

12/1/2008 - 12/2/2008Preparereserveanalysis

11/28/2008 - 12/1/2008Update tables and configuration

based on pre-close meeting results

12/2/2008 - 12/3/2008Present analysisto management,

determine follow-upitems and questions

11/26/2008Pre-close planning

12/6/2008Books closed

12/3/2008 - 12/6/2008Adjust reserve analysis (if needed),resolve follow-up questions/issues

12/1/2008Month-end

begins

Opportunity area where close process could be further

condensed

Continuous net revenue monitoring



Crowe Healthcare Advisory Services

RevenueManagement

Revenue Cycle ManagedCare

Finance Budget development & monitoring

Service Group Pricing & Payer Parity

Net Revenue Yield Variance

Managed Care Portfolio Mgmt

-Rate

-Volume

General Ledger

Net Revenue Reporting

Charity Care Reporting

Open A/R valuation

Bad debt write-offs & recoveries

Daily cash management

A/R Performance Contract Inventory Revenue Enhancement- Open A/R -Expected Pmt - Discrepancies- Bad Debt Mgmt -Payer Mapping - Underpayments- Denial Mgmt - Product parity

People: Revenue Management Team



Trouble rolls down hill…



Who’s fault is it?



Process: Standardize Pre-Close ActivitiesRevenue Management Team Meeting: “Pre-Close” Discussion

Determine Regular Meeting Time – 5 Days Prior to Day 1 Standardized Agenda designed to Address Potential Area of Risk Meeting minutes should be taken and shared

Most common issues discussed: Patient volumes/Payer mix Revenue cycle process changes; ie new initiatives Payer realization rates/Pricing Changes

Finance can do “heavy lifting” in Pre-close Phase Update all reserve assumptions: Hindsight & ZBA Analysis Re-Cast: Run New Assumptions against Prior Period AR to

Isolate/Understand Impact Large Balance Account Review Net Revenue Monitoring Throughout Month



Fundamentals of net revenue reporting Permanently store reserve estimates at the patient account level

Standardization of payors across multiple different entities

Calculates current month gross revenue by payor (should tie very closely to G/L)

Determines deductions on current month gross revenue, based on: Transactions posted during the month on current month revenue Reserves estimated on current month revenue

Separately determines changes in prior estimate based on: Changes in reserves on open accounts Differences in actual transaction experience versus prior reserves Separately categorizes changes where primary insurance did/did not change



Technology: Finance Continually Monitors Net Revenue Biggest barrier to accelerated close is

review and explanation of net revenue variances

Continuous monitoring can surface issues and causes for variance well before close process actually begins

Daily or (at least) weekly reporting can help to facilitate the quick analysis of fluctuations in net revenue during a period of time

Actively monitor and project net revenue to avoid surprises during close

Segregation of current period activity from prior period

Determine cause of fluctuations

Solving the mystery…



Many of the material changes in prior estimates where there is a difference between estimate & actual can be explained by revenue cycle process issues

Issues with contract modeling system Posting errors Inconsistent write-off practices Re-classing prior activity from bad debt to charity or administrative

adjustments Interim billed accounts Charge removals or late charges

Change in Reserve Estimates - Primary Insurance Unchanged



Change in Reserve Estimates - Primary Insurance Changed Accounts frequently flip payors during the month will change reserve estimates

or actual activity (particularly if posting discounts at time of billing)

Most common example is Pending Medicaid Reserves will be a blend of contractuals, charity, and bad debt If account flips to Medicaid, reserves will be mostly contractual (hit to contractuals, pick

up in bad debt and charity) If account flips to Self Pay, reserves will be mostly charity and bad debt (hit to charity

and bad debt, pick up to contractuals)

No current period gross revenue, yet net revenue is impacted



Net Revenue Analysis – Summary level11/30/2012

Inpatient Outpatient Total

$ % $ % $ %

Gross Revenue $19,822,026.00 18,1102,253 $37,939,279.93

Contractuals Allowances ($11,082,452.27) -55.91% ($10,614,959.98) -58.61% ($21,697,412.25) -57.20%

Admin Adjustments ($20,370.13) -0.10% ($179,885.85) -0.99% ($200,255.98) -0.53%

Charity Care ($1,861,897.02) -9.39% ($558,489.80) -3.08% ($2,420,386.82) -6.38%

Bad Debt ($297,798.82) -1.50% ($419,309.75) -2.32% ($717,108.57) -1.89%

Current Period Net/Net Revenue

$6,559,507.81 33.09% $6,337,608.50 34.99% $12,897,116.31 34.00%

Changes In Prior Estimate $602,495.57 3.04% ($1,181,624.47) -6.52% ($579,128.90) -1.53%

Total Net/Net Revenue $7,162,003.38 36.13% $5,155,984.04 28.47% $12,317,987.41 32.47%

Cash Collection $7,662,320.87 38.66% $6,073,045.64 33.53% $13,735,366.51 36.21%

Bad Debt Recoveries $28,210.26 0.14% $55,823.72 0.31% $84,033.98 0.22%

Total Cash Collected $7,690,531.13 38.80% $6,128,869.36 33.84% $13,819,400.49 36.43%

Difference $528,527.75 $972,885.32 $1,501,413.08

Cash to Net/Net Revenue 107.38% 118.87% 112.19%



Net Revenue Analysis – Payor levelFinancial Class Gross

RevenueMix % Gross

Revenue with Pricing Reduction

Current Month Net Revenue %

Change in Prior

Estimates

Realization % - VA1

AGENCY (AGEN) $263.3 0.63% $263.3 16.26% $78.9 46.23%

AHCCCS (AHCC) $3,484.5 8.31% $3,484.5 16.78% ($398.4) 5.35%

AHCCCS SENIOR PLANS (AHCCSR)

$3,865.1 9.21% $3,865.1 25.62% ($75.1) 23.67%

STATE DEPT OF CORRECTIONS (ADOC)

$0.0 0.00% $0.0 0.00% ($0.2) 0.00%

BCBC INDEMNITY PLANS (BCBSIND)

$19.2 0.05% $19.2 27.30% $0.2 28.11%

BCBS HMO PLANS (BCBSHMO)

$0.0 0.00% $0.0 0.00% $3.7 0.00%

BCBS PPO PLANS (BCBSPPO)

$1,674.8 3.99% $1,674.8 32.43% ($23.0) 31.05%

CHAMPUS (CHAM) $221.3 0.53% $221.3 19.88% $32.6 34.61%



Net Revenue Analysis – Account level

ATB ListingAccount Number Period Date Account Balance Total Charges Aging Bucket Current Financial Class Primary Insurance Provider

AcctXXXX 1/31/2013 $37,804.48 $37,804.48 DNFB CHARITY CHARITY-MISC

AcctXXXX 2/28/2013 $37,804.48 $37,804.48 31-60 Medicaid UNIVERSITY FAMILY CARE/Medicaid

Transaction Listing

Account Number Posting Date Transaction Amount Transaction Code Transaction Type Transaction Sub Type Transaction Description

AcctXXXX 2/2/2013 ($370.00) ASELF ADMIN ADJUSTMENT Not Specified SELF PAY ADJUSTMENT

AcctXXXX 2/5/2013 $370.00 ASELF ADMIN ADJUSTMENT Not Specified SELF PAY ADJUSTMENT

AcctXXXX 2/28/2013 $0.00 PUFC1 PAYMENT Insurance UFC ELECTRONIC PAYMENT

ATB ListingAccount Number Period Date Account Balance Contractual Estimates Admin Adj Estimates Charity Estimates Bad Debt Estimates

AcctXXXX 1/31/2013 $37,804.48 $0.00 $0.00 $37,804.48 $0.00

AcctXXXX 2/28/2013 $37,804.48 $30,031.88 $215.49 $638.90 $434.60

Activity On Account

Reserves On Account



Periodic Triangulation

Three high-level indicators to validate net/net revenue reporting:

Hindsight analysis – do historical cash collections equal net A/R? Source: Hindsight trending template

Cash to Net/Net Revenue – over a period of time, are cash collections tracking with reported net/net revenue?

Current A/R valuation – is current ratio of net A/R to gross A/R at or below historical hindsight payment rate?



Accounts Receivable Analysis – Payor level 181-270 271-360 360+ Total

Transaction Type $ % $ % $ % $ %

MEDICARE PPS (MC) Total Gross A/R $63,947 $61,564 $20,249 $8,674,043

Contractual $9,009 14.09% $0 0.00% $0 0.00% $3,783,264 43.62%

Administration Adjustment $19 0.03% $18 0.03% $6 0.03% $85 0.00%

Net A/R (After C/A & AA) $54,918 85.88% $61,545 99.97% $20,243 99.97% $4,890,695 56.38%

Charity $3,185 4.98% $905 1.47% $146 0.72% $31,221 0.36%

Bad Debt $4,872 7.62% $2,567 4.17% $18,337 90.55% $183,003 2.11%

Net A/R (Less BD & Charity) $46,862 73.28% $58,073 94.33% $1,761 8.70% $4,676,470 53.91%

SELF PAY (SELF) Total Gross A/R $1,315,169 $580,189 $1,028,019 $6,522,286

Contractual $151,113 11.49% $48,736 8.40% $34,130 3.32% $807,419 12.38%

Administration Adjustment ($123,100) -9.36% $4,467 0.77% ($9,766) -0.95% ($897,937) -13.77%

Net A/R (After C/A & AA) $1,287,156 97.87% $526,986 90.83% $1,003,655 97.63% $6,612,804 101.39%

Charity $398,233 30.28% $113,659 19.59% $260,603 25.35% $2,623,620 40.23%

Bad Debt $801,918 60.97% $370,707 63.89% $677,948 65.95% $3,554,813 54.50%

Net A/R (Less BD & Charity) $87,005 6.62% $42,620 7.35% $65,104 6.33% $434,371 6.66%

Self Pay After Insurance (SPAI) Total

Gross A/R $809,242 $418,211 $1,125,551 $3,339,479

Contractual $136,034 16.81% ($1,715) -0.41% $78,676 6.99% $223,081 6.68%

Administration Adjustment $56,000 6.92% $40,065 9.58% $127,525 11.33% $298,817 8.95%

Net A/R (After C/A & AA) $617,209 76.27% $379,861 90.83% $919,350 81.68% $2,817,581 84.37%

Charity $149,629 18.49% $48,973 11.71% $121,897 10.83% $535,871 16.05%

Bad Debt $339,119 41.91% $233,901 55.93% $727,582 64.64% $1,768,433 52.96%

Net A/R (Less BD & Charity) $128,461 15.87% $96,987 23.19% $69,871 6.21% $513,277 15.37%



Accounts Receivable Analysis – Summary level

A/R % Increase/(Decrease)Accounts Receivable - Debit Balance Feb-2013 Jan-2013 Change Feb-2013 Jan-2013 % ChangeInpatient $66,859,353 $66,472,967 $386,387 0.58%Outpatient $64,138,287 $63,304,534 $833,754 1.32%Total Accounts Receivable $130,997,641 $129,777,500 $1,220,140 0.94% Contractual Allowances % of GrossInpatient RCA Contractual $28,860,523 $29,259,945 ($399,422) 43.17% 44.02% -0.85%Inpatient Unapplied Contractual Discount $296,578 $417,395 ($120,817) 0.44% 0.63% -0.18%Outpatient RCA Contractual $36,248,619 $35,573,294 $675,325 56.52% 56.19% 0.32%Outpatient Unapplied Contractual Discount $776,120 $780,619 ($4,499) 1.21% 1.23% -0.02%Total Contractual Allowances $66,181,840 $66,031,253 $150,588 50.52% 50.88% -0.36% Admin Adjust Allowance Inpatient ($142,243) ($211,161) $68,917 -0.21% -0.32% 0.10%Outpatient $561,423 $953,956 ($392,533) 0.88% 1.51% -0.63%Total Admin Adjust Allowance $419,179 $742,795 ($323,616) 0.32% 0.57% -0.25% Bad Debt Inpatient $9,845,740 $9,400,423 $445,317 14.73% 14.14% 0.58%Outpatient $12,927,259 $12,850,046 $77,213 20.16% 20.30% -0.14%Other Bad Debt Reserves $61,695 $64,798 ($3,104) 0.05% 0.05% 0.00%Total Bad Debt $22,834,694 $22,315,267 $519,427 17.43% 17.20% 0.24% Charity Inpatient $10,144,930 $10,370,269 ($225,339) 15.17% 15.60% -0.43%Outpatient $6,001,558 $5,875,696 $125,862 9.36% 9.28% 0.08%Other Charity Allowances $82,788 $14,293 $68,495 0.06% 0.01% 0.05%Total Charity $16,229,276 $16,260,258 ($30,982) 12.39% 12.53% -0.14% TOTAL RESERVE $105,664,989 $105,349,573 $315,417 80.66% 81.18% -0.52%

BayCare Health System

Background

RCA Implementation

RCA Next Steps

About BayCare

Leading community-based healthcare system in Tampa Bay, Florida Network of 10 not-for-profit hospitals, outpatient facilities

& services including imaging, lab, behavioral health and home health care

More than 200 locations throughout Tampa Bay Founded in 1997 as integration of 3 Community

Health Alliances (CHA)

1. St. Joseph’s Baptist

2. Morton Plant Mease

3. St. Anthony’s

RCA Implementation

April-June 2012 = 12 Week Installation for 9 hospitals

July 2012 to December 2012 =

“Deep Dive” of data inside RCA tool

July 2012 to present

1. Perform parallel review of RCA and BayCare allowance

methods

2. During certain months, we applied different allowance assumptions and completed more than one scenario

method is acceptable

RCA Implementation (cont.)

February 2013 = Concluded that Crowe RCA allowance

method is reasonable and started

transition with some adjustments

May 2013 = Will book to Crowe RCA

allowance method in the

general ledger

http://www.google.com/imgres?q=conclusion&hl=en&biw=1366&bih=555&tbm=isch&tbnid=L55c632Y-Uv2pM:&imgrefurl=http://www.seospecialist.co.uk/school/links/conclusion/&docid=bLrscpGzKm46FM&imgurl=http://netdna.seospecialist.co.uk/wp-content/uploads/2011/04/conclusions-link-building.jpg&w=246&h=250&ei=TpNHUeLlEoGg8gSnq4DYBw&zoom=1&sa=X&ved=0CNgBEK0DMBY&iact=hc&vpx=2&vpy=216&dur=63&hovh=200&hovw=196&tx=74&ty=101&page=2&tbnh=139&tbnw=138&start=22&ndsp=3

RCA Next Steps

March 2013 = Consider the implementation of

Budget Module of RCA

for usage of rolling

18 month net revenue

Forecast

July 2013 = Begin

implementation of

Winter Haven Hospital

Contact Information

Mindy Arroyo

Revenue Management Specialist

BayCare Health System

(727) 519-1742

[email protected]

mailto:[email protected]



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