Fall 2005

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Healthcare Financial Management Association

Fall 2005

In This Issue

Contracting: A Critical Part of Success

Contracting………………………........1

By Roger Dix, CFO Hannibal Regional Hospital

Provider Spotlight...............................1 Letter from the Editor.........................1 Letter from the President..................3 Reimbursement Update…...............4 Upcoming Events..............................7

Letter from the Editor By Shelly Hunter, FHFMA This is my first letter from the editor. I am really looking forward to being the editor this year. I really would like to thank Kalon Mitchell, who is mentoring me, and Eli Southard, who works with Kalon. They create the finished product you see and do an excellent job! I would really like to encourage all of you to send me articles or ideas you would like to see in our newsletter. If you don’t want to write an article, send me an idea and I will find someone to write it. Your participation is what makes this newsletter a success. On another note, I would also like to encourage all of you to think about sitting for the certification exam. I am the certification chair this year. We are purchasing, as a chapter, the study guides for you to check out. You are allowed to keep these books for one month and then they pass to the next person on the waiting list. The study guides expand your knowledge in healthcare. Continued on p. 7

I was reviewing one of the many professional journals that crosses my desk routinely and ran across an article on contracting. Much of the article contained quotes from well renowned persons in healthcare finance. I was very surprised to find that many of the commentators felt the most important thing in healthcare contracting was relationships. The comments often encouraged close relationships with vendors. That relationship would naturally foster a team-building atmosphere and somehow result in the best possible outcome for all of the parties involved. Unfortunately that has not been a significant part my experience as a CFO. Continued on p. 2

Provider Spotlight By Deanna Maples, CMA, Controller CoxHealth is a community based, not-for-profit integrated healthcare system located in Southwest Missouri. The primary services are geographically situated in Springfield, Missouri. They have been serving the communities and people of this region for 100 years as of 2006. The commitment and passion of Ellen Burge gave this hospital its humble beginnings in a home in north Springfield. There is a rich history and strong community foundation that has shaped and supported them into the vital community and regional asset it is today. They are comprised of over 20 corporations and entities focused on the delivery and support of healthcare. An excellent community board of directors has been the visionary and sustaining element for growth and development. Their insight into the long-term growth of this region has allowed Cox to acquire land, buildings, and technology to support the healthcare services this community has desired and needed. The organization delivers state of the art care. The flagship of CoxHealth is Cox Medical Centers which is comprised of inpatient and ambulatory care services. There are three Springfield campus locations: Cox North, Cox Walnut Lawn, and Cox South. In addition there are 54 ambulatory physician clinics dispersed in 21 communities and 15 ambulance stations in 7 counties. Continued on p. 5

Contracting Continued from p. 1

We all desire those comfortable and friendly meetings with vendor representatives that produce an outcome of substantial benefit for both parties. It is much easier to agree to something that seems reasonable than to press for the best deal available. After all, that vendor rep is an acquaintance, possibly a friend or maybe someone that has shared the company’s football tickets with you. Why rock the boat? In fact, most vendor reps recognize the importance of their loyalty to their company better than we do. They are generally provided with incentives that enhance their income if they are successful. Many are expert negotiators and use their personalities to develop close relationships with customers that can be used to their advantage. I recently attended two work sessions on negotiating pricing contracts with high cost vendors. The sessions were a part of Premier’s “Breakthrough Series”. The sessions focused on negotiating tactics in the areas of orthopedics implants, cardiology stents and other high priced items. One session gave participants the opportunity to role-play and present their issues face-to-face to key stake holders in the process. Most of the participants could not even bring themselves to a point where they could bring up the topic. They were afraid to disrupt the relationship they had with the vendor rep. There were several brave souls at the conference that had confronted vendor reps on issues. Some referred to it as “beating up on the vendor rep”. These brave souls had recognized that they could substantially reduce their hospitals cost through negotiating price.

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In the negotiations process let the vendor rep know that you are working for the hospital and it will take his best deal to get the business no matter what type of relationship you have had in the past. When negotiating with a vendor rep I have always found it beneficial to create an air of competitiveness. He must believe there is something at stake. Make sure you are an educated buyer. Find out what the market will bear and let the vendor rep know you are knowledgeable. Eliminate fee-building add-ons like the cost of freight when the rep is the means of delivery. Always position yourself in the decision-making role. Remember he wants to sell to you more than you want to buy from him. In some quarters this might sound like you are “beating up on the vendor rep” but you are really just utilizing ethical and sound business practices to get the best deal you can for your hospital.


Letter From the President By Teri G. Winning

President Theresa G. Winning, FHFMA

Dear Show-Me of Missouri Members:

President-Elect It’s fall. Can you believe it? I sure can’t. I now believe my mother when she kept saying, “don’t wish your life away, time goes too quickly as it is”. I can’t say I want to wish my life away; I just want it to stand still for a day or two so I can catch up! Everybody with me? Seriously, healthcare is one of the most challenging fields for all of us to be involved in and it does keep everyone of us busier than we’d like to be most days. But, remember – the reason we’re here, the reason we’re devoted to our jobs is because we care. We care about the people we serve and the people who serve our patients. Without all of us where would a patient be? The Show-Me of Missouri Chapter is having a great year so far. We’ve already held educational sessions in May, July, August and September, serving over 350 attendees. We have 17 new members, a new certified member, a Fellow of HFMA, eight Founders Award Series recipients and four Founder’s Medal of Honor eligible members. Wow, what a great start.

Amy J. Michael

Vice President Stephanie D. Fennewald, CHFP

Secretary Dale C. Koger

Treasurer Jim Crawford

Director Stephanie C. Weis

Director

Last week we co-sponsored the annual Fall Conference at Independence, MO. The turn out was great and the vendor fair was well received. I also understand the Jazz Club tour was very enjoyable.

Angela L. Richmond

Be sure to visit our web site for future education, including at the Missouri Hospital Association Annual Convention. The subject for this meeting is “Fiduciary Responsibilities and Investment Strategies”, presented by Randy Saul of BKD Wealth Advisors. This session is on Wednesday, November 2, 2005 at 2:00 p.m. You should make plans to attend.

Dan Probstfield

Remember, our National Chairman’s Theme for this year: “The Business of Caring” and keep up the good work. —Terri

Director Director David W. Bokinsky

Director Donna Bruemmer

Director Greg A. Johnson

Theresa G. Winning, FHFMA President

For additional contact information on officers please go to the chapter Web site, www.HFMAshowme.org 3

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Wage index changes

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Base DRG payment changes

• Outlier threshold from current level $25,900 to $23,600 Changes to DRG’s and breakouts of DRG’s The easiest way I have found to assess the financial impact of the changes is to model current data with the new changes in payment. By downloading the DRG tables for FFY 2005 and FFY 2006 you can apply your volumes and payments to each of these weights. The first comparison can be made on DRG weight changes alone. Then look at your facility length of stay and compare to the geometric mean. The DRG’s that have a length of stay less than the geometric mean will be ones were you have a potential revenue loss on the transfer cases. I would be glad to discuss this if you want to give me a call.
Provider Spotlight Continued from p. 2 Figure P.1-1 CMS Profile HOSPITAL INPATIENT SERVICES

Reimbursement Update A Short Recap and Suggestions for Financial Impact Analysis:

Inpatient Prospective Payment System Final Rule Effective October 1, 2005 I think this may be one of the most difficult inpatient changes to date when trying to determine the financial impact to your facility. Some of the most significant changes are: •

The number of Transfer DRG’s went from 30 to 182

• Market Basket increase of 3.7% -if you submit quality data on the 10 CMS indicators

Annual admissions (excludes newborns)

31,226

# of licensed beds # of staffed beds # of employees # of medical staff

986 719 6,607 379

Inpatient revenue

46.9%

Outpatient revenue

53.1%

AMBULATORY SERVICES Annual emergency room visits

126,943

Annual Physician clinic visits

734,097 Continued on p. 5

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Provider Spotlight Continued from p. 2 Their mission is “To improve the health of the communities we serve through quality health care, education, and research.” This mission is lived out through the commitment to improve the health of the people in our communities. They have received many accreditations, honors and awards over the years, including Top 100 Hospital twice, Top 100 Integrated System, Joint Commission accreditation of hospitals and all clinics, one of the first disease specific certifications for a Stroke Center in the country, Missouri Hospital Association’s “Auxiliary of the Year”-large hospital twice since 2000, and two time recipient of Missouri Team Quality Award. Performance Excellence is the cornerstone of all they stand for. The vision is “To be the best for those who need us” Main Health Care Service CoxHealth’s main healthcare services center around inpatient care and ambulatory services. The inpatient services are comprehensive including medical-surgical, maternal child, rehabilitation, mental health, comprehensive specialty care, and emergency / trauma. Ambulatory services focus on diagnostic, interventional and rehabilitative treatments and therapies. These services are delivered with an integrated approach that focuses on keeping the patient and their family at the center of the processes and the decision-making. There are three inpatient hospital locations. Most ambulatory services are located on one of the three hospital campuses. The ambulatory physician office settings are located throughout the 18 county primary service area for patient/ customer convenience. To ensure consistent and seamless planning and delivery of care the management structure is designed in a matrix model allowing cross over of leadership at various locations related to the same type of service.

The delivery of healthcare to our community and patients is why they exist. Innovation and evidence-based patient care are the drivers of a quality clinical outcome. They have historically been and are currently a frequent leader locally, and at times nationally, in the delivery of healthcare. In 2004 they introduced locally the first Steriotactic Radio-surgical Service for non-surgical treatment of brain tumors. Also in 2004 The Meyer Center opened as a medical wellness and rehabilitation center model. This is a 103,000 square foot facility with services and equipment dedicated to fitness, wellness, and rehabilitation for the community. The three hospital campus locations are expansive. Cox South and Cox Walnut Lawn are contingent to each other and combined with the other affiliate corporations of CoxHealth at this location occupy a total of 150 acres in south Springfield. Continued on p. 7

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Special Thanks to our 2004-2005 Sponsors:

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BKD, LLP Missouri Medical Collections HumanArc

Silver

News from National! At HFMA's Fall 2005 Revenue Cycle Strategies Conference, you'll get information on the right topics and walk away with the right tools so you can achieve the right results in your organization!

Through learning sessions led by expert faculty and networking opportunities with your peers, you'll find out how you can increase cash flow, reduce denied claims, improve data quality and manage your revenue cycle from both an operational and strategic perspective. Get the techniques you need to move your revenue cycle to the next level - and learn the strategies that can help you sustain your organization's performance. You'll Learn:

Berlin-Wheeler, Inc. Receivables Management Davis, Hamilton, Jackson & Associates

The techniques you can implement in your revenue cycle operations to increase performance.

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Healthlink MediCredit/Outsource Group

To strengthen your financial management team by more fully integrating finance and patient financial services throughout the revenue cycle.

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Remote Support Services, Inc.

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Senex Service Corporation

The new and diverse approaches to revenue cycle management your colleagues are using in their organizations.

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About the tools and techniques you can use to optimize your revenue cycle.

Who Should Attend

Bronze • • • • • • • • • •

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Accounts Management Services— Columbia Account Resolution Corporation AIM Healthcare Services Credit Bureau of Paducah, Inc. D-Med Corporation Elite Financial Services, Inc. Faber & Brand, L.L.C. Attorneys at Law Healthcare Insights, L.L.C. Professional Data Services Sure Decisions, Inc.

This conference is designed for chief financial officers, revenue cycle and patient financial services directors and managers, and any other financial executive that oversees or participates in revenue cycle leadership.

Take-Home Tools Include:

The Almanac of Hospital Financial & Operating Indicators -- a book copublished by Ingenix and HFMA valued at $429. Sample plans that focus on observation in a way that ensures compliance while maximizing revenue. Tools for helping reengineer scheduling, preregistration and order management functions for accurate and timely payment. Tracking tools to manage bad debt write-offs and measure technical denials Consumer-directed health plan contracting checklists, model plan questionnaires and sample financial policies. Continued on p. 7

Provider Spotlight Continued from p. 5

News Update Continued from p. 6

Patient safety, elimination of redundant testing, and the exchange of information across the continuum of care and locations have been the drivers of CoxHealth pursuing innovative technology. The organization has a very innovative state of the art system that networks all locations under one IT umbrella, allowing for the exchange of critical patient information and business information in real time. The possibility of human error has been lessened when dispensing medication by the addition of the robotic pharmacy. The Picture Archiving and Communication System (PACS) was installed in 2004. It allows digitally imaged radiology studies to be viewed from multiple locations without the need to transport film copy images from one location to another. All patient’s individual medical records are imaged and available to the care provider instantly at multiple locations eliminating a delay in care or treatment for lack of historic information. The vision of “To be the best for those who need us” is implicit in the organization asking “What is the best?” That question drives the organization to keep learning about the best and finding ways to move CoxHealth to that end.
Letter From the Editor Continued from p. 1

14 CPEs (Conference) 17.5 CPEs (Preconference + Conference) Level: Intermediate/ Advanced Prerequisites: None Type of Program: Live Group Content Area: Specialized Knowledge and Applications

HFMA members save $100 on registration. Register with co-workers and save even more!


Taking the exam also shows your commitment to your career and sets you apart from those who have not taken it. The exam can be taken in two parts, core and specialty. We have proctors in our area that will arrange with you a time for testing. I am one of the proctors and would love to help and encourage anyone who wishes to take the exam. Please contact me anytime with articles, ideas or questions about certification. I welcome your feedback!




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Show-Me Chapter Newsletter 4940 N. 21st St. Ozark, MO 65721-7481 RETURN SERVICE REQUESTED