Becker's Hospital Review

19 CFO / FINANCE Analysis: Average Hospital Misses Opportunity of up to $22M in Revenue Capture By Kelly Gooch A n Advisory Board analysis revealed the average 350-bed hospital could gain up to $22 million in additional reve- nue by putting more focus on improving rev- enue cycle management performance rather than managing RCM cost. Advisory Board said the potential financial impact takes into account the average hos- pital improving from median to 75th-per- centile performance in each of four key metrics: denial write-offs, bad debt, cost to collect and contract yield. The firm rec- ommends hospitals respond to four market forces to fully take advantage of this rev- enue capture opportunity. These include increased patient consumerism driven by higher financial obligations, aggressive commercial denials and more complex payer contracts, physician engagement on documentation given demands on the acute care and medical group enterprises, and poorly executed integrations that waste potential economies of scale. In analyzing these four forces, Advisory Board said they found the average hospital is losing 5 percent of their margin to com- mercial payer underpayments, denials and suboptimal contract negotiations. Advisory Board said they also found the portion of pa- tient obligations being written off as bad debt increased from 0.9 percent in 2008 to 4.4 per- cent in 2015. "To build more enduring relationships with patients and improve collections, hospitals and health systems should improve the pa- tient financial experience with a foundation built on transparent search capabilities for price estimates, convenient access for sched- uling and payment, a positive care encounter, and each point of financial contact contribut- ing to the construction of a durable relation- ship," the firm said. Additionally, Advisory Board found the Medicare Access and CHIP Reauthorization Act "is adding new performance burdens to physicians and medical groups," and that con- solidation is driven by various payer, patient and physician forces. n CHS Divests 9 Hospitals By Ayla Ellison F ranklin, Tenn.-based Community Health Systems com- pleted its sale of nine hospitals. CHS divested four hospitals to Harrisburg, Pa.-based Pin- nacleHealth System. The following hospitals are included in the transaction: • 100-bed Memorial Hospital of York (Pa.) • 214-bed Lancaster (Pa.) Regional Medical Center • 148-bed Heart of Lancaster Regional Medical Center in Lititz, Pa. • 165-bed Carlisle (Pa.) Regional Medical Center CHS also divested hospitals in Louisiana, Texas and Wash- ington. The company sold Spokane, Wash.-based Rockwood Health System, which includes two hospitals and a multi-spe- cialty clinic, to Tacoma, Wash.-based MultiCare Health System. CHS divested 88-bed Lake Area Medical Center in Lake Charles, La., to Irving, Texas-based Christus Health and sold two Texas hospitals — 350-bed Tomball (Texas) Regional Medical Center and 67-bed South Texas Regional Medical Center in Jourdan- ton — to Nashville, Tenn.-based HCA Healthcare. With the transactions completed, CHS operates 11 hospitals in Pennsylvania, two in Washington, two in Louisiana and 13 in Texas. CHS divested the hospitals as part of a turnaround plan it put into place last year, which involves the company selling 30 hos- pitals to trim its debt load. n West Virginia Hospital to Charge Upfront Co-pays for Non-Emergency ER Visits By Alia Paavola T homas Memorial Hospital in Charleston, W.Va., will begin charging upfront co-pays to patients who visit the hospital's emergency room for non-emergency care, according to the Charleston Ga- zette-Mail. Upon entry into the ER, patients will be screened to determine if they require emergency care. If they come to the ER for a non-emergency reason, they will be informed of the co-pay and be able to de- cide to stay and pay the upfront co-pay or visit an- other provider. "The emergency room can be a very costly place to receive care, because if you're not being seen by the same physician all the time, every time you present the doctor's got to start from scratch," Dan Lauffer, president and CEO of Thomas Health System, told the Charleston Gazette-Mail. About 30 percent of patients who present in Thomas Memorial's ER receive care for non-urgent conditions. The upfront co-pay will help offset the bad debt the hospital incurs providing care to the uninsured and underinsured. n

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