Getting More Out of Your Epic Activity Codes

epic optimization
epic optimization

Productivity.  The mere mention of the word elicits a variety of reactions throughout a business office.  How we measure and drive productivity can have a significant impact on metric performance, as well as team morale. Topics such as how to measure multiple actions taken on an account, accounts worked numerous times each day, complex vs. straightforward account populations, and group vs. individual productivity standards are just some of the issues that need to be addressed as part of an effective productivity management tool. 

Thankfully, Epic’s Account Activities can help drive productivity performance, improve productivity measurement, and provide a quality component to increase transparency with staff. Below is a breakdown of design considerations to be leveraged when completing an activity code build/enhancement in Epic to further drive productivity performance and reporting.

Epic Activity Code Tip #1 – Determine what to measure.

There are a lot of different ways to measure productivity in a business office including total touches, number of unique accounts, and accounts resolved. Understanding what you want to measure and hold team members accountable for will help drive the design of your activity code build. This will also impact how to best utilize Epic’s standard productivity reporting package. Example questions to ask include:

  • Do I want to measure what was done, the current status of the account, or both?
  • Do I need separate measurements (dedicated activity codes) for each functional area in the business office?
  • How do I want to handle multiple actions taken on an account?

Epic Activity Code Tip #2 – Drive automation to improve quality and productivity.

Activity codes have extensive automation functionality known as Billing actions. These actions can be implemented to drive efficiency and thus improve quality and productivity for staff. Examples of automated functionality include:

  • adding billing indicators,
  • sending letters or statements,
  • routing to workqueues for review,
  • outsourcing/insourcing accounts,
  • changing an account class, and
  • combining accounts.

The more we allow the system to do for us, the higher our overall productivity, and the less chance there are for errors.

Epic Activity Code Tip #3 – Develop canned / smart notation to drive volume.

Leverage default notation and smart text within the activity code to ensure that all relevant data points are addressed while, at the same time, reducing the time required for notation and improving notation consistency across the team. Canned notes provide a template for staff to fill out based on the specific activity code while smart text can automatically pull in specific information such as the date, payor, patient name, etc. These items combine to improve notation quality while simultaneously leading to improved productivity output.

Epic Activity Code Tip #4 – Utilize activity weighting to add a quality component.

Implement activity scores to quantify the difficulty of the action taken by the team. Those activities that are more difficult, such as submitting an appeal, are weighted higher compared to those activities that require less time, such as calling a patient and leaving a message. This score is a default reporting metric within Epic’s standard productivity reporting package and can be used in combination with the number of accounts worked to understand if staff are taking effective steps towards account resolution.

Epic Activity Code Tip #5 – Eliminate the e-mails between departments.

When combined with an effective workqueue design methodology, Epic’s activity codes contain the ability to auto-route accounts between departments for things such as medical records, demographic verification, appeals, etc. Effectively utilizing this functionality can route accounts to the appropriate workqueues in Epic, eliminating the need to send a supplemental e-mail or get up and walk to someone’s desk.

Parting Thoughts

  1. Understanding what and how you want to measure productivity is a critical first step in activity code development.
  2. Workflow modifications may be required to effectively implement activity code utilization and productivity reporting.
  3. Activity weighting and automation are underutilized functionalities at many Epic clients and have opportunity to greatly enhance productivity performance and department quality through error reduction.
  4. Accurate routing and workqueue rules are critical to ensure that the functionality is aligned with the design structure of your activity codes.

For more information related to Epic optimization or revenue cycle management, please contact Kevin at

Related Reading:

Getting the Most from Your Interim Revenue Cycle Leader

Some people view an interim leader as a stop gap between an outgoing revenue cycle leader and the next leader to fill the permanent role; someone to manage the day-to-day and maintain performance. We would contend that, in the Revenue Cycle space, interim leaders should also have the experience and skillsets needed to rapidly identify and execute changes to improve performance.  Despite the need for interims to drive value, many times interim revenue cycle leaders maintain performance at best. 

Below are a few ideas to get the most out of your choice for interim revenue cycle leadership:

Before bringing in an interim leader, ask the team:

  • What expertise would benefit the team?
  • What must be maintained or fixed to keep forward momentum?

Ask the right questions when talking with a potential interim leader:

  • What is their leadership style?
  • How do they engage staff to support initiatives?
  • Discuss their experience working with other departments to support revenue cycle initiatives
  • What does success look like in an interim leadership role?
  • Do they have experience transitioning initiatives to new leader mid-stream?

Outline an initiative-based work plan the interim leader is expected to manage forward throughout the contract:

  • Identify quick wins to demonstrate progress and gain buy-in
  • If an established initiative work plan is not available, set the expectation that a rapid assessment be completed in the area(s) they are over and tie progress to milestones in their contract

Set up a structure for success:

  • Note the metrics when the interim begins to monitor progress
  • Ensure metric monitoring is in place so you can course correct as necessary
  • Identify the executive who will regularly check in to ensure the interim’s progress

If you are in need of an interim revenue cycle leader or would like to discuss the approach outlined above, please contact Andrew Jacobsen at to discuss further.

3 Factors that Reduce the Accuracy of Your Hospital’s Cost Estimation

hospital cost estimations

Over the past several years, price transparency has become a hot topic in healthcare.  Providing an accurate estimate of patient liability prior to service is one area many organizations are focusing on to address price transparency.  With that in mind, there are a variety of products in the revenue cycle space that providers can use to automatically calculate an estimate of a patient’s out of pocket liability.  Armed with a cost estimate, revenue cycle staff are equipped to have a meaningful conversation about the patient’s cost for the service. This conversation with the patient increases transparency and drives cash collections.  The time savings that comes with automation is a hard benefit to dismiss, but what about the accuracy? Like most products with numerous inputs and data sources, the initial configuration and the ongoing maintenance is critical to ensuring an accurate tool.  

First let’s take a look at the 4 main data elements that go into a cost estimation:

  1. Hospital Charge Description Master (CDM) – Your organization’s specific charges for services provided.  Utilized to estimate the gross charges associated with straightforward services (e.g., CTs, MRIs, etc.)
  2. 837 Claims Data – Actual claims history your organization has submitted electronically to payers that is aggregated to estimate gross charges associated with more complex services (e.g., surgeries)
  3. Payer Contracts – Your organization’s contractual terms with each contracted payer.  Utilized to estimate the allowed reimbursement for that payer. The allowed amount can be equated to what the insurance company will pay the hospital for that service.  This value is critical in the calculation of a patient’s coinsurance (% of the contracted amount the patient has to pay). Contracts can range from straightforward “% of charge” to significantly more complex reimbursement methodologies.
  4. Electronic Eligibility and Benefit Inquiry Responses (EDI 271) – Electronic benefit information directly from the payer via 271 response that outlines patient cost expectations (copay, deductible, coinsurance, and max out of pocket information)

Utilizing the above data, the tool estimates the gross charges associated with the service, the payer specific allowed amount for that payer based on the contract, and finally the patient’s copay, coinsurance, and deductible, if applicable.  Sounds pretty straight forward right? To have the best probability of an accurate cost estimation tool, each of the above items needs to not only be accurate, but refreshed periodically with the most current updates. Now let’s take a closer look at the 4 benefit components that go into the calculation:

  1. Copay – What is the copay associated with that specific service?  This comes directly from the benefit information received in the 271 response
  2. Deductible – What is the patient’s yearly deductible?  This also comes directly from the benefit information received in the 271 response.  For this to be an accurate part of the calculation, you need to know what portion of the deductible is remaining.
  3. Coinsurance -What is the patient’s cost share % of the contracted allowed amount?  This is where the 837 claims data and contracts come into play. For this to be accurate, you need to know the coinsurance for that specific type of service AND the contracted allowed amount for that particular payer.  
  4. Max out of pocket – What is the maximum yearly amount the patient can pay in a given year?  You need to know what portion is remaining.

With all the moving parts above, 3 specific items stand out as the top culprits for an inaccurate estimate:

  1. Payer contracts are not built correctly into the tool resulting in an inaccurate allowable amount/contracted rate and therefore an inaccurate coinsurance amount
  2. 837 data and/or CDM data is not refreshed frequently enough (or at all), resulting in an inaccurate coinsurance amount
  3. Specific benefits from the 271 response are either not available in the 271 response provided by the payer, or are not mapped correctly in the tool to tie the right benefit components to that particular type of service.  For example, a patient may have specific copay/coinsurance benefits for diagnostic imaging services, but the payer either doesn’t provide those in the 271 response, or the mapping in the tool is pulling more generic outpatient benefits instead.

While cost estimates are a great tool that allow for increased transparency, improved cash collections, and reduced bad debt, inaccurate estimates can lead to undesirable outcomes such as excessive patient credits and patient billing complaints.  For more information on improving the accuracy of your cost estimates, please contact Andrew at

Do You Really Know Your AR?

Cliff Notes

  • Much of what we consider our accounts receivable will never be collected
  • Inaccurate variance logic will continually over/under represent AR
  • Hospitals need to evaluate the likelihood of a positive outcome and ensure staff work corresponding populations
  • Vendors should be utilized solely on a performance basis to collect on aged AR

What is my AR, really?

In-house unbilled, discharged not final billed (DNFB), follow-up, variance, denials, self-pay, bad debt. These are all populations that impact the accounts receivable (AR). However, do we ever stop and ask what is the likelihood of collecting on an account? Is the balance that we’re showing in our AR accurate? Propensity to pay models give us some insight early in the process for self-pay, but those scores slowly lose their relevance the more accounts age. Below, I will highlight some of the symptoms of an unhealthy AR and whether it is due for a check-up.

Can you collect on this?
Too many accounts are sitting on worklists that will never be collected. Examples include accounts billed after timely filing, denials past timely appeals, severely aged AR, etc. We recently analyzed 3 months of collections at a client and found that 94% of all collections occurred within 180 days of discharge. This left over 50K accounts on worklists that had a low likelihood of being collected. This is taking away focus from those populations that can be impacted and increasing the overall cost to collect. Providers should examine their vendor outsourcing and bad debt policies to ensure they are in line with the reduced likelihood of collections over time. Additionally, workdrivers should be designed with this same information in mind to ensure staff are focusing on truly impactable populations.

Population Quarantine
To ensure staff are working impactable account populations, providers should ensure that they have robust logic in place to support the outsourcing and write-off processes. Regarding outsourcing, tiered automated logic should be in place to assign populations based on age and balance. Additional logic should be in place to insource accounts after a specified period of time to be reviewed for final write-off. Many providers are not aggressive in the design of this logic, resulting in large volumes of aged low to medium dollar accounts clogging up worklists. If the outsourcing and write-off processes are not automated and/or the logic is too relaxed, accounts with a low likelihood of collectability should be moved to monitoring workdrivers to ensure that they do not disrupt staff workflow.

When over/underpayments are anything but
Contract build is difficult to say the least. Many firms or EMRs do an admirable job however, there are inevitably issues plaguing the AR related to variance management. Over/under adjusting can happen due to contract build, bad data from the payer, or manual errors. This inevitably leads to over/underpayment amounts that are inaccurately reported. Assigning ownership to these populations with a heavy focus on root cause and feedback can reduce their impact on inaccurate AR reporting. Overall, variance management should be handled similarly to how many hospitals manage denials. This includes regular task force meetings and root cause analysis with 360 feedback to address future populations.

Parting Thoughts

  1. Business offices obsess over trying to collect every penny they can. They would be better served targeting a smaller population of highly impactable populations and re-allocating resources as necessary.
  2. Accounts with a low probability of collection should be outsourced or quarantined from staff worklists via an automated process
  3. Write-off logic should be automated to reduce worklist clutter
  4. Contract management should be an ongoing focus within the revenue cycle and should be part of all revenue cycle meetings as it relates to remittance interpretation and outcomes

For more information related to AR management or revenue cycle management, please contact Kevin

Top 5 Missed Epic Revenue Cycle Optimization Opportunities

Epic is a platform within the healthcare industry which generates a strong love/hate relationship.  On one hand, it centralizes information and opens communication across the provider spectrum. On the other hand, many supposed efficiency gains are bogged down in tedious workflows while promised reporting transparency remains unavailable or hidden in a mountain of reporting options which may all yield different results.  Five examples of underutilized Epic functionality that revenue cycle leadership should evaluate include account prioritization (also known as workqueue scoring), activity code enhancement, simple visit coding (SVC), watch list development, and comprehensive workqueue re-design. Some of these concepts can be designed and implemented as part of an Epic installation while others are ideal for clients that have been live for a period.

Workqueue Scoring

A buzz phrase within the Epic community, workqueue scoring allows for the development of customized logic to prioritize accounts within a workqueue and group account populations into categories (i.e. 1-5) to drive end user productivity and reporting.  Leveraging scoring functionality can help reduce timely filing/appeal denials, drive up front collections, improve agings, increase effective account touches by staff, and bring to light delinquent account populations that may be eligible for outsourcing or internal clean-up initiatives.  

In addition to financial and productivity benefits, workqueue scoring can also help empower operational leadership to drive accountability by improving transparency around workqueue performance.  Leadership can provide feedback or triage staff based on the high priority volumes within each workqueue. This helps to ensure that all high priority accounts are worked within a timely manner, reducing financial risk to the provider.

Workqueue scoring can be a powerful tool when leveraged appropriately within patient access, HIM/coding, and Patient Financial Services.  It can help prioritize high risk/high opportunity account populations, while also giving tools to leadership to effectively manage their AR and staff.  The flexibility of workqueue scoring should empower leadership to improve financial performance while remaining flexible enough to target special projects and evolve as the business office book of business changes over time.  It is recommended that workqueue scoring be implemented in a limited fashion prior to go-live when possible and evolve over time as the AR continues to build and change. For those providers who are already live within Epic, a comprehensive workqueue scoring approach should be reviewed and implemented across all areas of the revenue cycle.

Activity Code Enhancement

Activity codes (also known as billing activities) in Epic are a frequently underutilized tool.  They can be used to drive system automation, increase productivity, improve interdepartmental communication, and help drive reporting around staff quality.  While Epic comes pre-populated with many different activity codes, often, they are not built out to adequately improve workflows and improve staff productivity.

Activity codes can be used to automate things such as outsourcing and insourcing accounts, account escalation, routing between departments, sending letters, and standardizing documentation.  Furthermore, activity codes can be given a score to help quantify the difficulty/importance of a task. These scores can help drive productivity reporting within Epic to help understand how effective staff are in their account touches.

Effective activity code build within Epic should be an opportunity to improve staff productivity, while also driving consistency and improving communication.  Activity code development can also drive quality metric reporting for management to better understand staff performance and drive improvement. Activity codes should be developed prior to go-live when possible and evaluated on a quarterly basis to ensure that they support existing revenue cycle workflows.

Simple Visit Coding

Simple visit coding is a frequently neglected, or only partially developed functionality within Epic.  As the name implies, Simple Visit Coding is a process that takes relatively “simple” outpatient visits and automates the coding process directly within Epic.  The end goal being for staff to work accounts on an exception basis. Simple Visit Coding leverages the diagnosis information combined with a late charge analysis to identify those populations of accounts that would be eligible for Simple Visit Coding.

Leveraging simple visit coding can help reduce DNFB/CFB days, leading to cash acceleration within the revenue cycle. Additionally, increased automation through simple visit coding can lead to staffing flexibility and efficiency gains.

It is recommended that simple visit coding be combined with flexible MinDays (suspense days), allowing for claims to be sent earlier and the payments received faster.  Simple visit coding should be implemented in a post-live environment once staff have become comfortable with workflows in Epic including charge entry, diagnoses documentation, and coding workflows.

Watch List

The Watch List is a component that can be plugged into Radar Dashboards within Epic that highlights key metrics within Patient Financial Services.  While the Watch List has improved over time, it remains one of the most powerful, yet underutilized tools within Epic.

The Watch List can be customized to track key high opportunity and/or high-risk account populations and trend those metrics over time based on volume and dollar.  Additionally, the dashboard includes drill-down functionality for root cause analysis and special projects.

Development of customized metrics can provide invaluable insight into the health of the revenue cycle and can drive cash improvement and reduce denials.  For example, metrics can highlight workqueue black hole account populations, workqueue overlap, upcoming timely filing/appeal deadlines, high dollar unbilled, vendor aged assignments, or uncoded account populations.

Watch List metrics can be implemented at any time pre or post live.  Metrics may need to be refined over time as system logic evolves and can be created and deactivated for special projects as necessary.  Finally, metrics can be customized to specific owning areas such as No Response, Billing, Denials, etc. to help drive ownership and accountability.

Workqueue Re-design

Workqueue re-design is a comprehensive assessment of existing workqueue logic and functionality across the revenue cycle.  Frequently, for clients who have been live on Epic for several years, the volume of workqueues required to be monitored by staff can increase to a point where it becomes difficult to manage.  Workqueues are neglected, ownership is not updated, descriptions are out of date, or the logic is not comprehensive to catch or eliminate specific account populations. Conversely, numerous staff may work out of a single workqueue utilizing Epic filters, which creates difficulty in driving staff accountability.

Workqueue re-design evaluates existing workqueue logic to find black holes or workqueue logic overlap, as well as delinquent workqueues that are not actively worked with an end goal of reducing the number of workqueues within the system and working to get closer to a single workqueue per staff member.  A waterfall logic approach is put in place to ensure that accounts reside in the highest priority workqueue and is resolved before moving along within the revenue cycle.

Workqueue re-design can be implemented as an enhancement to existing workqueues, or a complete workqueue re-build depending on the scope of the initiative.  Workqueue re-design is inherently a post-live optimization initiative, however, components behind the methodology can be incorporated into a pre-live environment to help manage future workqueue growth.

Parting Thoughts

  1. Epic is a large, robust tool which continues to evolve.  Healthcare organizations need to be aware of not only new functionality, but the effort and risk/reward to implement that functionality.
  2. System optimization can have numerous benefits including increased cash flow and net revenue, increased productivity and quality, improved standardization, and increased reporting transparency.  These items can help a revenue cycle operate as a more effective unit.
  3. Many pieces of functionality can be turned on in part and evolve or grow over time.  For example, workqueue scoring could be implemented only in the No Response workqueues and simple visit coding could be implemented for only a few departments.
  4. Organizations need to approach their workqueue build with a well thought out plan and commit to that plan over time to ensure the system remains manageable and fully functional.

For more information related to Epic optimization or revenue cycle management, please contact us at or via phone at 218.591.3607.

Why Accounts Receivable Outsourcing Fails & How to Avoid Common Pitfalls

Your internal self-pay team can’t handle the increasing volume of calls.  You’re aged insurance accounts receivable (AR) continues to increase.  Or maybe your internal resources just don’t have the necessary expertise (or time) to work a specialty population like out-of-state Medicaid or third-party liability.

Any of these scenarios can cause you to start down the path of outsourcing a revenue cycle function or segment of your AR.  This is a process that can deliver increased net revenue, but it can also be fraught with unmet expectations.

This blog series will address common challenges seen throughout the outsourcing process and provide strategies to create an effective partnership with your vendor – so that you achieve the outcomes you desire.  In this series, we will cover the following topics:

  • Part 1 – Determining the Need
  • Part 2 – Vendor Selection
  • Part 3 – Contracting
  • Part 4 – Vendor Implementation
  • Part 5 – Ongoing Vendor Management


But First – A $200,000 Overpayment Story

A few years back, I was working with a hospital that had a long-standing relationship with a vendor that had been contracted to work their early out self-pay population.  At first glance, the terms seemed ideal, the rate was competitive, and the performance shown by the vendor’s monthly reports looked solid.  But something did not feel quite right on the monthly invoice.  

When we decided to do an in-depth review, we discovered that there was a material portion of the vendor invoice that was not warranted – to the tune of almost $200,000 over a two-year period.

Here’s where the process broke down.  After many years of partnering with the vendor, the hospital had become lax on invoice reviews because the totals had stayed fairly consistent for quite some time.  Hospital management admittedly only spot checked the invoices occasionally.  

Due to the lack of invoice review, and in part to the way transaction files were set up, it turned out that the vendor was being compensated for insurance payments on accounts where the payer had simply taken back their money and repaid a slightly different amount based on post payment review.

Many were quick to blame the vendor for the oversight, but the reality is that there were numerous places this should have been caught, or prevented altogether, during the set-up.


Questions to Ask Yourself about Outsourcing

Outsourcing a revenue cycle function or segment of your AR to a vendor sounds simple, right?  You take a segment of AR your internal staff cannot work or don’t have the expertise for, give it to a vendor, and just like that you are generating cash for your organization you otherwise wouldn’t have.  While it sounds simple, for a variety of reasons that is not the experience many hospitals have when they engage an outsource vendor.  Outsource arrangements fail to meet expectations for many reasons, and candidly, most are not simply due to poor performance on the part of the vendor, but come down to the combination of two primary shortfalls:

  1. Hospitals tend to follow the “out of sight, out of mind” philosophy when it comes to outsourcing, effectively relinquishing control and responsibility to the vendor
  2. Vendors typically read the silence from the hospital as positive reinforcement that they are meeting expectations

Going back to the example at the beginning, this is all to say that establishing controls and having frequent and consistent communication is necessary in creating an atmosphere of transparency and preventing issues from going unnoticed until it may be too late to rectify.

If you have had challenges in the past, or are planning to outsource all or parts of your AR, you should first……


Ask yourself the following questions:

  1. How do I know if I need a vendor in the first place?
  2. What criteria should I be using to determine which populations should be worked by in-house staff vs. outsourcing?
  3. How do I assess the return on investment (ROI) associated with the outsource?
  4. How do I know if the rate is appropriate for the scope of work?
  5. When evaluating a specific vendor, what questions should I be asking?  
  6. What are the must haves in any outsource contract?
  7. How do I monitor performance post implementation?


If you answered “I’m not sure” or “I don’t know” to any of the questions above, you have come to the right place.  This blog series will help you to avoid the many potential missteps along the way that can lead to a less than desirable outcome.  

Our intent is not to place blame on outsource vendors, but rather establish what hospital revenue cycle management can do to best position the relationship for success and consequently the outcomes you are looking for.  

At the end of the day, you should be looking for a business partner when engaging an outsource vendor.  The more the relationship feels like a partnership, the higher likelihood of success – but hospital revenue cycle management should be in the driver seat.  

Our next topic will cover Determining the Need – where we’ll discuss how to objectively establish the need for and benefits of outsourcing.

If you’d like to have a more detailed conversation about outsourcing, give us a call or send us a note.

Getting in Front of the Self-Pay Trend in 2018

Improve Your 2018 Revenue by Focusing on the Self Pay Category

There’s no denying that self-pay (SP) is on the rise. It’s a clearly established trend. If you are looking to improve your facility’s financial performance, then the SP category must be a significant part of your revenue cycle focus. Here is a quick snapshot of the trends, some levers you can pull to drive improved performance, and some questions you should ask to determine the size of your SP collections improvement opportunity.

The Self-pay Outlook – 2018 and Beyond

In the future, healthcare providers can expect to see a continued increase in both uninsured (UI) and self-pay-after-insurance (SPAI) populations (collectively considered to be “self-pay”).

Uninsured + Self-Pay-After-Insurance = Self-Pay

Higher Deductibles

According to the Kaiser Foundation, enrollment in high deductible health plans has increased sevenfold over the past decade, and all signs point to a continuing trend in this direction(1).

Higher Deductibles = Higher Patient Responsibility= an Increase in the Self-Pay-After-Insurance (SPAI) Category.

Uninsured Patients

The average cost of a 2018 Health Exchange policy is expected to be 27% higher than it was in 2017(2). When combined with uncertainties and confusion around the future of the Affordable Care Act leading into the 2018 open enrollment season, along with the recent elimination of the “Individual Mandate” requirement, it is anticipated that overall enrollment in the Health Exchanges will decrease(3).

This means that the UI population will increase.

Higher Exchange Costs + Elimination of the Individual Mandate = Higher Uninsured (UI) Population


Where to Look to Improve Self-Pay Performance

There are many levers that you can pull to improve your self-pay revenue performance. The best place to start is to design an overall strategy that addresses all components of the self-pay portion of your revenue cycle, from patient access through bad debt collections.


Let’s Get Specific

Looking at bad debt write-offs by UI/SPAI at the patient level can be a great way to uncover opportunities and prioritize improvements.

We recently worked with a typical facility, dealing with a Self-Pay opportunity:

Not surprisingly, the emergency department (ED) was the largest source of the facility’s bad debt. Their primary driver was UI patients, but there was also a significant amount of SPAI flowing into the bad debt category as well. Through our structured assessment process, it was determined that if the organization were to provide greater financial counseling and eligibility screening coverage – they could convert more UI patients to Medicaid and Health Exchange plans.

There was also an opportunity to implement Emergency Medical Treatment and Labor Act (EMTALA)-compliant bedside financial screening and patient liability collections in order to reduce both UI and SPAI risk.

Additionally, looking at ED bad debt transfers by patient uncovered opportunities to create solutions for “frequent fliers.” These included scheduled financial counseling visits at the hospital or patient home and setting patients up with alternative options for primary care.

Establishing Meaningful Targets

One of the biggest opportunities we see for improving SP collections effectiveness is establishing meaningful targets.  We find the best metric to effectively measure SP collections is to establish a collection rate that calculates:

SP Cash Divided by “SP Opportunity”


*SP Opportunity includes SP revenue (net of uninsured and financial assistance discounts) + the patient liability portion of insurance allowables (SPAI).

After evaluating current performance, meaningful targets can then be established.

Questions to Ask

Here are some questions that are critical in evaluating Self-Pay cash collections:

  1. What is your self-pay payer mix including SPAI?
  2. What is the total SP opportunity that could be collected?
  3. What is the right overall SP collection rate target based on payer mix and other factors?
  4. How much bad debt can we potentially convert to cash and more favorable write-off types such as financial assistance or contractual allowances?

Based on historic trends and continued uncertainties with the regulatory environment, it is likely that the Self-Pay collections opportunity will continue to grow.

If you would like to discuss strategies for improving your Self-Pay collection rate – contact Pinnacle Healthcare Advisors.



(1)High Deductible Health Plan(HDHP) Enrollment: The Kaiser Family Foundation 2017 Employer Health Benefits Survey (Health Plans with at least $ 1,000 deductible for individuals, or $ 2,000 for families)



Managing the Shift from Traditional Medicare to Managed Medicare Plans – Here’s How to Get It Right

Managing the Shift from Traditional Medicare to Managed Medicare Plans

Managing the Shift from Traditional Medicare to Managed Medicare Plans

As the mix within Medicare continues to shift from traditional to managed plans, hospitals that don’t take steps to address the differences in administrative expectations and claims processing between plan types run the risk of increased denials and mounting accounts receivable (AR).

Managed Medicare as a percentage of Total Medicare 2013-2016
Does your mix look like this?

The Kaiser Family Foundation, in its 2017 Medicare Advantage Spotlight Report, states that:

“Both the Congressional Budget Office and the Health and Human Services (HHS) Office of the Actuary (OACT) project that Medicare Advantage enrollment and penetration rate will continue to grow over the next decade, with CBO projecting that about 41 percent of Medicare beneficiaries will be enrolled in Medicare Advantage in 2026. Enrollment will likely grow more in some parts of the country than in others, reflecting the diversity of markets and the coverage decisions of beneficiaries.


The Difference Between Medicare and Medicare Advantage Plans

Traditional Medicare is rules-based.  When guidelines for care are followed and claims are billed correctly, Medicare pays quickly – typically within 14-21 days.  But Medicare Advantage Plans (MAPs) follow much more of a commercial flow, and the expected payment for these plans is in the 40-45 day range at best.  There are several factors that hospitals need to be aware of in managing this difference:

  • It’s a different model. MAPs are handled by commercial payers, so they are much more likely to play games, request medical records as a means to delay payment, and deny claims for not meeting any number of “hoops” through which you must jump.
  • The quality of the commercial payer can have a huge impact on your revenue cycle. If the consumer is covered by a high-quality payer, then reimbursements can be timely and denials minimal.  Lower quality payers can be significantly harder to deal with – they will do anything and everything to deny or delay payment.
  • Negotiating terms is important. While traditional Medicare is a fairly straightforward “if this, then that” model, MAP reimbursements can be highly influenced by relationships with payer representatives and your strategic approach to payer meetings.  This is a business model that requires negotiation skills.


Three Strategies to Manage the Trend

It’s not going to stop.  The trailing edge of Baby Boomers is going to continue to enroll in MAPs, and the effectiveness of your revenue cycle depends on how you deal with these two distinct populations.  Hospitals that recognize this will focus on the following strategies:

  • Separate Your Populations. From a systems perspective, this is typically accomplished by adding a separate financial class for traditional Medicare v. MAPs.  You should expect to evaluate cash flow, A/R, agings, and overall reimbursement rates differently for these two plan types (and by each unique MAP payer!) – and your systems configuration and reporting approach should reflect these differences.
  • Separate and Train Your Teams Appropriately. The skills required to resolve revenue issues are remarkably different between Medicare and MAPs.  Resolution of traditional Medicare issues typically involves strict adherence to Medicare guidelines and staying up to date on CMS changes.  MAP reimbursement issues, however, require a different skill set.  These teams need to master skills as such as recognizing delay tactics, understanding payer contract terms, or better managing the administrative requirements of a contract.  Notification or authorization requirements can overwhelm an untrained staff.
  • Educate the Front End – When patients enter the continuum of care, staff education in the Patient Access and Utilization Management areas is critical. These key resources need to be trained to recognize the difference between plans when initially engaging with patients.  The most important skill is to know how to successfully identify and secure a MAP account.


Signals that Indicate You Have a Problem

Hospitals that don’t break out traditional Medicare and MAPs separately in their revenue cycle processes make it extremely difficult for employees to manage the business.  Murky “red flag” scenarios include:

  1. AR seems high, but depending on the plan mix, a 40-45 AR day range might be good – or it might be miserable!
  2. Mixed Medicare processes and measurements make it very difficult to determine whether AR issues are driven by billing accuracy, payer delay tactics, internal process issues, or unfavorable contract terms.
  3. Cash factor/reimbursement rates are indistinguishable. MAPs should be paying more than 100% of Medicare to account for the administrative and denial tasks that aren’t present with traditional Medicare.  And breaking out the two populations will allow you to see the real impact of MAP denials and other delay tactics.


Questions We Can Help Answer

In our experience, hospitals should have metrics and processes in place to answer on-the-spot questions such as:

  1. What is my mix of Medicare vs. MAP and how has that been changing over time?
  2. How are we performing in each segment of revenue, and what are our key metrics?
  3. What are the shifts within our MAP payer mix (e.g. movement from Blue Cross to Humana), and how are they impacting our financial performance?
  4. Do we have separate and unique controls and strategies for each segment?  And if so, are we pulling all the appropriate levers to keep our AR as clean as possible?
  5. Are we positioned to manage a population that increasingly behaves more like commercial plans than Medicare?
  6. Are we effectively negotiating MAP reimbursement rates and contract terms?


Your Medicare population is shifting towards MAPs, and if you’re not sure how to adjust your teams to deal with it, contact Pinnacle Healthcare Advisors and we can talk strategy.  Or just call us at 218.591.3607.

By Andrew Jacobsen, Principal

The Anatomy of A Revenue Cycle Scorecard

Using metrics to drive actions that improve financial results

Managing your revenue cycle in a world of shifting populations, increasing patient financial responsibility, and competitive pressure on volumes can be challenging, to say the least!  There are so many variables and changes in core processes that it can seem like an impossible task to keep track of it all.  The concept of using a scorecard is not new.  But when environmental factors begin to shift (and they will), we have found that managing to specific metrics, interpreted using a defined methodology, will enable hospitals to more quickly act and correct or mitigate degrading financial performance.


Let’s look at how to build an effective revenue cycle scorecard.

Hospital Revenue Cycle Scorecard

How it Works

The most important aspect of a scorecard is that it enables the organization to take action in specific areas to address issues more quickly.  An effective scorecard is designed to give you the ability to achieve desired financial outcomes, such as increased net revenue, improved cash flow, and reduced expenses.  Mechanically, this is done by measuring operational activities that drive outcomes in sufficient detail so that they are actionable.  If financial outcomes can be tracked to actionable operational metrics, then CFOs have the ability to drive accountability across the revenue cycle.

Taking Action

Let’s look at an example where a hospital experiences an increase in accounts receivable (A/R) days yet still meets its cash collection goal.  With an effective scorecard, CFOs can “follow the story” back through the organization to help identify the cause(s) of the increase.  Look at bad debt transfers and components of uncompensated care such as charity care and self-pay discounts – it could be that there are backlogs in charity approvals and/or a bottleneck in the bad debt transfer process if either of those metrics are trending below target.  Both would cause A/R days to go up while maintaining expected cash collections.

To aid in troubleshooting, it is also important to have operational reports with drill down capabilities that serve as the source for the metrics on the scorecard.  For example, a daily unbilled report that breaks down the backlog by uncoded, pending physician dictation, pending edit resolution, etc. and includes targets and owners for each category.



Building an effective revenue cycle scorecard is not exceptionally difficult.  But creating the cultural environment where metrics are understood and teams know how to address root causes can be challenging.   At Pinnacle, our experience has shown that when CFOs educate their teams so that they know how to interpret metrics and make decisions, they will maximize financial performance.  Formulating the scorecard is the first step – but establishing a coaching, teaching, and mentoring process is what will drive sustainable revenue cycle improvements.

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To learn more about how leveraging the right metrics can improve your revenue cycle, visit

How to Determine if Your Current EHR Platform Can Solve Your Revenue Cycle Challenges

Don’t Buy More Software! – Four questions to help determine if your current EHR platform can solve your revenue cycle challenges


How to determine if your current EHR platform can solve your revenue cycle challenges

When hospitals determine that they have a challenge to be solved within their revenue cycle, it is extremely common for them to buy “bolt-on” software to fill perceived gaps in their electronic health record (EHR) capabilities.  But what we have found is that this is often unnecessary and can add cost and complexity to a problem that can often be solved by leveraging existing EHR functionality.

There are many vendors on the market with excellent bolt-on technologies, and we are not discounting the value or importance of these tools, as they are sometimes much more robust that EHR capabilities.  But we believe that hospitals don’t always need the “gold standard” and can frequently leverage existing technologies.  The old adage “progressive improvement is better than postponed perfection” is applicable here, and we believe that in-house solutions can drive similar results if implemented correctly.


Here’s a simple list of questions for Hospital CFOs to ask to potentially avoid making unnecessary technology expenditures:

Question #1 | Does your staff have the right experience and training to optimize your EHR Platform?

Ideally your information technology (IT) analysts have clinical and/or operational experience so that they truly understand how to apply existing EHR capabilities to solve problems and achieve goals.  Training classes and certifications for both IT and end-user staff are critical to ensure you are getting the most from your investment.


Question #2 | Have you established an interdisciplinary “Technology Team”?

In order for hospitals to maximize the utility of existing EHR platforms, the entire organization has to be aligned and moving towards a common goal – getting the most value from the EHR investment.  When IT, clinical, operational, revenue cycle and other relevant staff come together regularly to evaluate progress and options, solutions using existing tools and capabilities are more readily uncovered.


Question #3 | Are you fully engaged with your EHR vendor?

Unfortunately, it is not uncommon to hear EHR vendors respond to questions about capabilities with answers such as “it can’t be done” or “no other hospitals are using that functionality.”  However, we have found that with the right approach, often those answers are simply wrong.

In some cases, it’s a matter of finding the right person in the vendor organization.  If you are getting different answers from different people, be persistent – ask more than once and more than one person.  Often the best resource is a product manager or modular specialist who will have more expertise and knowledge than sales people or management. And always review the latest user manuals before engaging in discussions vendor resources.


Question #4 | Can you activate your peer network?

Some of the best information about EHR capabilities can come from “those who have been there before us.”  Aside from contacting your peers, hospital alliances, user groups, conferences, and social media communities are filled with people who have paved the roads to  optimization using the same EHR platform you are running today.  In many cases they have already solved the specific problem you are trying to address – so reach out to them, and you may find the hidden gems of functionality that you already own.

Clearly software vendors aren’t knocking on your door to tell you that you already have an internal solution.  They are highly skilled at creating a scenario where you simply can’t live without their technology!  In the end, though, evaluating what you have in place already – before you buy another piece of software – can save you time, money and the headaches that can come from introducing new technology into your environment.  Most people automatically make the assumption that their current EHR platform can’t do this or that.  The checklist above will help you ensure that you exercise all options before making another investment that you might not need.

For more information about what Pinnacle Healthcare Advisors can do for your EHR platform, contact us.