What are we gonna do Katrina? Now I’m officially scared.

Mack, the senior managers are getting together right after this meeting to come up with a plan. No excuses, AR is out of control, and I am scared right with you. I’d like Bill (bank president) to stay after the meeting for a few minutes; I think that we should talk about a credit line for the hospital until we can turn this thing around. Board members, we will be back to you at the November meeting with a detailed plan to get AR back in line for this facility. Whatever it takes, we are going to start bringing cash in the door here. And we may tick some people off in the process, so please get ready for the phone calls.

I like you folks a lot, all of you, and we have good things going on at Marysville General these days. But I need to tell ya, I’ve known this board for some years, and they are nervous right now. And if they don’t see some real improvement in cash fast, they really might start over with management. They get phone calls and mailings all the time from that outfit in Nashville that buys and manages community hospitals. Nobody wants to see that happen. I’m rooting for you, and I’ll do whatever I can to help. Gotta round on my patients now.

I’m out here when you’re ready for me Katrina.

I never thought I would have to ask you Bill, but can you give me a rate quote on a $250,000 credit line, just in case we need it for payroll? I am confident in this team and their ability to turn the cash flow problem around, but I am not sure how quickly that will happen.

Will do Katrina, and I agree that a credit line would be better than selling off investments if we get that tight. Back to you by COB tomorrow.

You own the process here. We are all with you, but you are going to have to lead the change. I have a doctor and his family in for a visit today, and they are arriving in a few minutes, so gotta go. Please give me a report by end of week.

We need a process improvement plan, folks; a good one.

Linda, as business office manager, you own the admissions process. How is that going? Is there room for improvement?

Lots of room for improvement, especially in getting current insurance information. We have some inexperienced people doing admissions, especially in the evening, and they are just not great at checking to see if the patient’s insurance information has changed. And from 11 p.m. to 7 a.m., the ER nurses are taking down registration information. I know that they are trying, but sometimes we cannot read the copies that they make of patient insurance cards, and they also forget to ask about coverage changes. If my department is billing an old insurance company or we have the incorrect plan codes, we have no chance at all of collecting. Under the admissions heading, I’d say those are the two biggest problems—bad insurance information and unreadable data from the night shift. I’ve wondered if it would actually pay for itself to have an experienced admission clerk on duty all night.

Gosh that would be tremendous. The nurses are so busy, and no matter how much we preach the importance of insurance information, the nurses will always give patient care priority. I think it would be good for business and good for staff morale to have a clerk here 24/7.

Ok, thanks for the insights on admissions. We know we have some problems to solve there. Moving ahead to charting now. Becky, you, and your HIM team own the charts. How do you feel about that aspect?

Overall, charting is good these days. We’ve implemented electronic medical records (EMR) and that has definitely helped, but we have two docs, Dr. Linscott in family practice and Dr. Patel in internal medicine who are just not great at documenting. I know that we are losing money there. We can’t code the highest legitimate diagnosis for the patient, because there is not enough detail on their charts. As you know, Dr. Patel is our number one admitter to the hospital! If we could get her to chart more thoroughly, it would be worth hundreds of thousands of dollars a year in my opinion. And then of course we have the Dr. Nielson problem (everyone groans). Patients love him and he is just the nicest man, but he will not complete his charts on time and we cannot code the charts for billing until he does. That really slows down billing and cash flow.

Got it, two docs with charting issues, and our time honored with trying to get Dr. Nielson to do his charts. How late is he right now Becky?

Today he has 27 inpatient charts over 30 days post-discharge. I’d estimate that at $120,000 in revenue if we could bill them.

(EVERYONE) Geez… holy smokes… unbelievable… well there’s a big part of the problem right there. 

Ok, how about charge capture, Nancy. We used to lose a small fortune in lost charges. Has the new computer system helped that?

It is just remarkable everyone. The IS folks under Bill’s leadership are helping us to capture charges like never before. The old stickers getting thrown away on disposable items and missed charges for tests and treatments are almost eliminated now. If a particular procedure is ordered by the doctor, the IS system knows to look for certain charges to go with it, and it won’t give up until we give it some. The new computer is a persistent little guy or gal or whatever it is.

So glad to hear that things are better now Nancy. The new MedXL computer system has probably paid for itself already in my view, and we’ve only had it for 10 months now.

Ok, so charge capture is not the problem. How about claims processing? Linda and Bill, you both own pieces of that.

Too many rejected claims folks. Definitely could be better. Every insurance company has different requirements, and it is so hard for my staff to keep up with that. Even within the same company, their rules seem to change every time we turn around. I’d say that we have between $700,000 and $800,000 a year in rejected claims.

I think I can help with that. MedXL has an optional “Clean Claims Module” that might make sense for us. The people at MedXL load the claims requirements for the 150 most common insurance companies into our system, and then update it monthly for us. It is about $10,000 up front and then $2,000 a month for support.

Ok, something to consider then. We must improve performance on clean claims. How about payment posting, Linda?

Just not a problem anymore. MedXL helps us to get payments into the right places when they arrive, and it reminds us to bill secondary insurance or the patient. Not an area of concern.

Ok, helps to know that. How about billing secondaries and patients?

It won’t surprise you that collections on self-pay patient accounts are just awful, right around 15 cents on the dollar. We are writing off so much to bad debt these days that it’s killing us.

I have a suggestion there if you don’t mind. Several of the busiest doctors on staff are doing something in their own offices that might help the hospital. They are offering a 25% discount to patients who pay their bills within 10 business days. Many patients are taking advantage of that and paying their bills quickly.

I’d probably take advantage of that also, but 25% strikes me as a pretty big discount!

Let me put it to you the way Dr. Evans puts it—I’d rather have 75% now than 60% a year from now when the collection agency finally gets paid.

That is a valid point. We have so much going out to collection agencies now, and they charge us 40% right off the top for what they collect on our behalf.

Ok, something else to consider. Any other ideas?

One thing that would really help is if we could actually talk to the patients about their bills.

Gosh, we are making our own calls to try and collect aren’t we, Linda.

Yes, but we mostly just talk to answering machines. The business office is open from 7 a.m. to 6 p.m. and with husbands and wives working these days, we play a lot of phone tag with people, even with sincere people who probably would make payment arrangements with us if we could just chat with them.

Ok, one more thing to solve then. Folks, I’ve greatly appreciated your help and I am going to put together a draft process improvement plan for all of you to look at. Katrina wants something from us by Friday, and our plan must be pristine by the November board meeting. Watch your e-mail for a draft plan tomorrow or Thursday, and shoot me some feedback as soon as possible.