Million Dollar Metrics: KPI That Builds the Bottom-line

Eligibility and enrollment programs at hospitals and health systems are often a costly mess. Fixing these problems can come down to setting the right metrics and monitoring the data in real-time.

Centra Health, a three-hospital system based in Lynchburg, Va., took control of its eligibility and enrollment data, and as a result cut uncompensated care by $9.1 million and saved a total of $11 million.

Many organizations use multiple, disparate data silos that span departments and in some cases multiple hospitals. That makes it challenging for healthcare leaders to get at accurate and actionable performance data. Some organizations rely on in-house departments to screen self-pay patients and enroll them in Medicaid or other assistance programs, while others use third-party vendors.

Four years ago, Joseph Koons, Centra Health's managing director of revenue cycle, sought to change how the organization approached its insurance eligibility and enrollment program. Uncompensated care had reached 7% of Centra Health's gross revenue.

He pushed to have all eligibility and enrollment data centralized. That would give the ability to pull together, in real-time, the needed data: stats on payer, provider and hospital performance measures, outside referrals, and hospital incurred expenses. From there, Centra Health could benchmark against goals and targets that prevent small revenue leaks from turning into huge ones.

The first step was deciding on key performance indicators (KPIs) to track. "We started by deciding which process points were critical to the outcomes, and decided that one of them was eligibility," says Koons. "Eligibility is tied to significant dollars, and our uncompensated care was running at over 6.5% on over $1 billion gross revenue—so even a 10% movement in that [uncompensated care] number would be significant."

Centra Health needed to screen not only its inpatient population, but also outpatients and visitors to the emergency department. Centra Health fields over 92,212 emergency department visits annually and 26,824 admissions across the system.

"Prior to us implementing the use of KPIs, from an eligibility standpoint, most of the data we gathered was subjective and not at all measured. We made a decision that we would measure as much as we could to identify those metrics that would bring the most value to the revenue cycle, and from there put together a KPI strategy with a hierarchy approach. So, depending on [the person's] level of accountability, that's the data they have access to," says Koon.

Koons was tasked with identifying and tracking the KPIs, such as bad debt and charity care as a percent of gross revenue, insurance acceptance and approval rates, cycle times from referral to insurance approval, and approval to pre-certification authorization.

After adding a dashboard to compile data from their systems, Koons worked with Chamberlin Edmonds, a consultant that is a subsidiary of Emdeon, to establish best practices for its eligibility and enrollment program and the ability to work with a third-party vendor who could track quantitative measures to prove success.

Their first step was to screen as many self-pay patients as possible entering the system, explains Koon.

"Doing this would require us to improve our overall contact rate on our inpatient referrals. We needed the [eligibility and enrollment staff] to see more patients face-to-face. We know that the higher the contact rate, the higher the likelihood that the [insurance] applications get completed and approved," he says. "We were at about 80% in terms of face-to-face time with patients, and we needed to consistently be at 98% to 100%. We were able to do that."

Centra Health worked with its vendor to increase the level of contact and to track it. Koons says that just by increasing personal contacts, the organization was able to reduce uncompensated care from 7% to 5.4%—which accounts for that $9.1 million savings.

Besides the uncompensated care savings, it also increased point-of-service collections by $2 million—from $3.4 million to $5.4 million—for a total savings of over $11 million.

"We've seen a positive shift in our percent of charity as a part of gross revenue and the percent of bad debt," says Koons. "Before we had this robust eligibility program, our bad debt as a percent of our gross revenue was always greater than our charity. We knew we needed to do a better job identifying patients who were truly unable to afford care but could qualify for funding sources instead of allowing them fall under bad debt."

There were other bonuses. The organization found that this personal approach improved the patient satisfaction. Centra Health also used data-driven KPI to constantly monitor the eligibility program's performance, for areas such as bad debt as a percent of gross revenue, the amount of charity care provided as a percent of gross revenue, and the percentage of shift from bad debt onto the system's charity care program.

The KPI dashboard also served to motivate internal staff, Koons notes. "When you start to measure things, it brings a greater state of awareness to the people who are being measured, and they're more likely to be in compliance and accountable," he says.

Centra Health used the eligibility and enrollment data to implement a staff incentive program for some departments, such as registration, to further encourage the successful collection of data and dollars. People are incentivized on productivity, accuracy of information gathered, and point of service collections. Since the ultimate goal is to get accurate information, the team must meet accuracy goals in order to trigger their bonus.

"The primary reason we tackled this area was to drive down uncompensated care, grow revenue, and increase our cash flow, but we also found making the added effort to help the patients really improved their—and our—levels of satisfaction," says Koons.