Cutting costs top 2019 priority for healthcare finance execs & other survey findings

https://www.kaufmanhall.com/sites/default/files/documents/2019-01/2019-cfo-outlook-healthcare.pdf

https://www.beckershospitalreview.com/finance/cutting-costs-top-2019-priority-for-healthcare-finance-execs-other-survey-findings.html?origin=cfoe&utm_source=cfoe

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Many senior finance executives are not fully prepared to manage the financial impact of evolving business conditions in today’s healthcare environment, according to a survey by strategic and financial consulting firm Kaufman Hall.

The survey, conducted in September and October, asked CFOs, vice presidents of finance, directors of finance, and other senior finance executives more than 20 questions to gauge performance management progress and trends. Participants represented more than 160 U.S. hospitals, health systems, and other healthcare organizations.

Five findings:

1. Only 13 percent of respondents said their organizations are very prepared to manage evolving payment and delivery models with the financial planning processes and tools now available.

2. Additionally, only 23 percent said they are very confident that their teams can quickly and easily adjust to strategies and plans.

3. Ninety-six percent of respondents said they believe their organizations should be making greater efforts to leverage financial and operational data as part of decision-making.

4. Cost reduction and management is the biggest priority for senior finance executives this year, followed by predicting and managing changing payment models.

5. Along those lines, more than half of respondents cited the following as top improvement priorities for financial planning and analysis:

  • Cost management and efficiency
  • Reporting and analysis to support decision-making
  • Operational budgeting and forecasting
  • Profitability measurement across specific dimensions

 

 

Universal Health Services finance chief Steve Filton on cost containment and challenges hospital CFOs face

https://www.beckershospitalreview.com/finance/universal-health-services-finance-chief-steve-filton-on-cost-containment-and-challenges-hospital-cfos-face.html?origin=cfoe&utm_source=cfoe

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As CFO of one of the nation’s largest hospital management companies, Steve Filton understands the challenges hospitals face.

Mr. Filton has served as executive vice president and CFO of King of Prussia, Pa.-based Universal Health Services since 2003.

He  joined the company in 1985 as director of corporate accounting and in 1991, he was promoted to vice president and controller.

Mr. Filton spoke with Becker’s about some of the challenges facing CFOs and his top cost-containment strategies.

Question: What is the greatest challenge hospital and health system CFOs faced in 2018? Do you expect this to be their biggest challenge in 2019 as well?

Steve Filton: I think effectively we’re in an environment where our payers have all concluded that costs and medical spending have to be reduced, and a lot of that burden ultimately falls on providers, like hospitals and doctors. As a [result], I think hospitals are tasked with the difficult goal of continuing to provide the highest quality care in more efficient ways. I think that was the biggest challenge last year and will be the biggest challenge this year. I think, frankly, for the foreseeable future, that’s the challenge of being a provider in today’s healthcare environment.

Q: How do you feel the CFO role has evolved in recent years?

SF: I think CFOs have a particularly challenging role in that our organizations explore the ways to deliver high quality care that’s best for our patients and try to create an environment that is satisfying for our employees. We as CFOs then say, ‘How do we accomplish these things and remain efficient and remain profitable?’ [That way organizations] can continue to do all the things we have to do as far as investing and reinvesting in the business and continuing to be competitive with our labor force and do all the things that allow us to continue to run high quality facilities, which in many cases involve significant expenditures.

Q: What are your top cost-containment strategies?

SF: I think a lot of our cost-containment strategies are focused on what I describe as driving the variability out of our business. I think so many other industries and businesses are accustomed to delivering their products and services in very standardized ways that are determined to be most efficient. I think healthcare has sort of long resisted that, and as a [result], we have lots of variability in the way that we deliver services in our various geographies. Various clinicians will deliver services differently. And I think we could benefit by following the lead of some of our peer industries and becoming much more focused on … delivering all our care and service in that standard way in accordance with best practice protocols. Driving out excess utilization and driving out rework and re-dos and errors — those things I think are a significant focus of getting the hospital industry to be more efficient and cost-efficient.

Question: During your tenure at UHS, what has been one of your proudest moments as CFO?

SF: What I take great pride in is the growth of the company. When I joined the company in the mid-1980s, it had maybe 35 [or] 40 hospitals around the country and maybe $500 million of consolidated revenues. This coming year we’ll have well over 300 domestic facilities and another 100 or so in the United Kingdom and over $11 billion of revenue.  And what I’m proud of is not just the growth of the company, but … the way the company has grown and yet really adhered to its core principles. When I joined the company 30 some odd years ago, it was very committed to high quality patient care and to the satisfaction to our employees. And honestly, if anything, I think the company has recommitted itself to those core principles over the years, and to be a much bigger company [and] not have abandoned our core principles, at least for me, is a source of great pride.

Q: If you could pass along one nugget of advice to another hospital CFO, what would it be?

SF: I tell the folks who work with me and for me all the time that it’s so important to behave every day with the highest level of integrity. I think at the end of the day you can’t replace that. People, I think, will give you a lot of leeway if they trust you, if they believe that you’re behaving transparently and with great honesty. And so I encourage everyone who works for me to do that, and I certainly endeavor to try to do that as best I can. And it’s tough. There are all kinds of pressures on folks in a financial role in this sort of environment. But I think if you behave with integrity, everything else will follow from that.

 

 

 

48% of CFOs don’t have a succession plan

https://www.beckershospitalreview.com/finance/48-of-cfos-don-t-have-a-succession-plan.html?origin=cfoe&utm_source=cfoe

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Though CFOs are usually known for their careful attention to detail, 48 percent of them  have not identified a successor, according to a study in The Wall Street Journal.

Robert Half Management Resources surveyed 1,100 CFOs in  various industries. Of those respondents who have not created a succession plan, nearly two-thirds said they had no plan because they did not intend  to step down soon. They also cited the need to focus on other priorities and the absence of qualified candidates.

Jenna Fisher,  head of the global corporate sector at executive search firm Russell Reynolds Associates, said  the percentage of CFOs with succession plans represents a dramatic improvement from five years ago, when she estimated less than 10 percent of her clients had CFO succession plans.

“The role of CFO has become more salient,” Ms. Fisher said.

 

 

 

5 Revenue Cycle Trends to Watch

https://www.healthcareitleaders.com/blog/5-revenue-cycle-trends-to-watch/

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When we think of healthcare and hospitals, we primarily think of the patient experience as it relates to individual health and wellness. However, another important part of the patient experience involves the finance and billing departments of healthcare organizations. The moment a patient checks in for an appointment, they enter into this system of payment and processes and the journey ends when all claims and patient payments have been received either from the patient or from their insurance company.  This sounds like a simple, linear process, but it’s much more complicated than that. To help organize these financial processes, organizations rely on healthcare revenue cycle management and software to process this constant influx of important data.

As the healthcare industry continuously changes, revenue cycle management policies and software are changing with it. Healthcare IT Leaders Revenue Cycle Lead, Larry Todd, CPA, discusses the changes happening in the industry and the trends to watch in 2018 with revenue cycle management.

Mergers driving new implementations

Healthcare systems are getting bigger as more organizations are merging. Many legacy systems are beginning to sunset, and there is a need for organizations to implement a new system to support the growth of the organization. “It’s important for organizations to consider how they will sunset their legacy system and embrace the new system during a revenue cycle implementation,” says Todd. “Organizations need to take a step back before the implementation to consider how to build a holistic system. Without proper integrations, many organizations will be challenged to manage their reimbursement processes.”

Organizations seek to improve denial and reimbursement processes

Claim denials and documentation to support appeals are areas where the revenue cycle marketplace continues to struggle, says Todd. “Organizations are seeking innovative ways to improve these processes and reduce denial rates, through either third-party systems, or, if possible, within the host system.”

CFOs must stay engaged in implementations

“Any implementation will affect the revenue of the organization so it’s very important for CFOs to be involved in the implementation project and to be informed of key parts of the project that could put the organization and its revenue at risk,” says Todd.

As a former CFO and trained accountant, Todd says it’s a mistake for CFOs to disengage once an implementation is underway. “These are highly technical projects, so there is a tendency to hand over the reins to IT or the software vendor, but financial executives need to stay engaged throughout the project, including weekly implementation status updates.”

Clients should form a revenue cycle action team that includes the CFO and puts all of the revenue cycle stakeholders at the table, including clinicians, says Todd. Having the CFO involved in this process ensures critical executive oversight regarding decisions that impact AR and Cash.

User training and adoption are critical

As healthcare organizations transition from a legacy system to a new system, they need to consider how they will handle the change management for their staff. “Some employees have been using these systems for more than 10 years. Properly training employees on the new system is a top concern for executives and managers,” says Todd.

Organizations will rely on outside expertise for implementations and integrations

As organizations integrate their new system and implement changes, a key recipe for success is to hire experts who understand the technical and operational aspects of the the software and organizational processes. “It’s very valuable to work with a consulting firm that employs real consultants – people who have worked in operations for years and truly understand the unique challenges of implementing revenue cycle solutions” says Todd. “At Healthcare IT Leaders, we all have unique perspectives and experiences that we bring to the table thanks to this approach.”

 

 

Ex-CFO, 3 surgeons charged in $950M kickback scheme in California

https://www.beckershospitalreview.com/legal-regulatory-issues/ex-cfo-3-surgeons-charged-in-950m-kickback-scheme-in-california.html

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Federal prosecutors unsealed charges this week against nine new defendants for their alleged roles in a kickback scheme that resulted in the submission of more than $950 million in fraudulent claims, mostly to California’s worker compensation system, according to the Department of Justice.

The nine defendants were charged in relation to the government’s investigation into kickbacks physicians received for patient referrals for spinal surgeries performed at Pacific Hospital in Long Beach, Calif. They are among the dozens of physicians and other medical professionals allegedly involved in the scheme.

Of the nine defendants recently charged, three are orthopedic surgeons. Daniel Capen, MD, agreed to plead guilty to conspiracy and illegal kickback charges. He allegedly accounted for about $142 million of Pacific Hospital’s claims to insurers. Timothy Hunt, MD, who allegedly referred spinal surgery patients to Dr. Capen and other physicians, agreed to plead guilty to a conspiracy charge involving his receipt of illegal kickbacks. Tiffany Rogers, MD, allegedly received illegal kickbacks to refer patients for spinal surgeries to Pacific Hospital.

The other defendants recently charged in the scheme include the former CFO of Pacific Hospital’s physician management arm, George Hammer. He agreed to plead guilty to tax charges based on the fraudulent classification of illegal kickbacks in hospital-related corporate tax filings. Two chiropractors as well as two companies and an individual associated with one of the chiropractors were also charged for their alleged involvement in the scheme, according to the DOJ.

Michael Drobot, former owner and CEO of Pacific Hospital, ran the 15-year-long kickback scheme. He was sentenced to more than five years in prison in January.

 

 

7 AREAS CFOS MUST ADDRESS FOR ORGANIZATIONAL VIABILITY

https://www.healthleadersmedia.com/finance/7-areas-cfos-must-address-organizational-viability?utm_source=silverpop&utm_medium=email&utm_campaign=20180613_HLM_SPOTLIGHT_Cost-Containment%20(1)&spMailingID=13684315&spUserID=MTY3ODg4NTg1MzQ4S0&spJobID=1421195534&spReportId=MTQyMTE5NTUzNAS2

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An upcoming CFO roundtable provides a peer-sharing platform to learn best practices for advancing a healthcare organization’s financial health.

Today’s healthcare financial leaders face escalating costs, quality improvement issues, difficult reimbursement environments, an increasingly complex service portfolio, and risk management associated with performance contracting.

Pressure mounts on CFOs to ensure their organizations remain viable as they deal with these issues, which makes gleaning proven strategies from colleagues imperative.

Four dozen executives will convene at a private roundtable forum during the 2018 HealthLeaders Media CFO Exchange, August 8–10 in Santa Barbara, California, to
address top-of-mind concerns.

In pre-event planning calls, Exchange participants—representing integrated health systems, academic medical centers, community hospitals, and safety net providers from across the U.S.—want to know how others are taking on risk, improving costs, addressing consumerism, and capturing additional reimbursement.

During the two-day event, a series of moderated roundtables will explore areas of special interest expressed by CFOs, including the following:

1. Cost improvement

Since costs are increasing at rates higher than reimbursement, how does a CFO drive cost performance to maintain sufficient operating margins? How are systems successfully leveraging scale to rationalize administrative and support services?

2. Proliferation of mergers and acquisitions

How can an independent organization survive in this environment? Should it consider other affiliations? For those involved in new entities, how are leaders achieving value?

3. Taking on risk

How does an organization prepare to take on and reduce risk, and when does an organization know that it is ready? How can CFOs build reserves to offset unexpected outlays?

4. Enhancing revenue cycle performance

How can financial leaders improve payer terms, reduce denials, ensure payer compliance, and improve clinical documentation? What are effective ways to deploy new workflow technologies in patient accounts?

5. Performance-based contracts

How are organizations engaging medical staff to reduce the cost of care and improve outcomes?

6. Medical group employment

How does a health system minimize provider subsidies for employed physicians and improve practice performance?

7. Medical consumerism

How can healthcare organizations compete against disruptors in the growing environment of consumer choice? What are creative ideas for meeting consumer demand without adding cost?

Additional information will be shared during the two-day gathering. The CFO Exchange is one of six annual HealthLeaders Media events for healthcare thought leadership and networking.

Revenue cycle and patient financial experience

Recently, HealthLeaders Media hosted a Revenue Cycle Exchange, which brought together 50 executives to discuss improving the patient financial experience; maximizing reimbursement; managing claims denials; technology adoption and data analytics; revenue cycle optimization; and creating a leaner, more effective team.

Noting how consumerism is influencing bill payment and giving rise to the patient voice, leaders are seeking ways to make paying easier. Consumer feedback suggested easy-to-understand and consolidated statements.

“We have a single business office with Epic, so regardless of where a patient gets their services, they get one bill from our organization,” says Cassi Birnbaum, director of health information management and revenue integrity at UC San Diego Health.

“We’ve also created a position for a patient experience director, so any complaint goes through that unit and they’ll contact one of my supervisors to ensure the patient gets the answers they need. That’s helped a lot and provides a one-stop, concierge, patient-facing experience to help ensure the patient’s balance is paid,” Birnbaum says.

Providing estimates and leveraging technology are also helpful for fostering patient payments. More health systems are promoting MyChart, an online tool for patients to manage their health information, as well as kiosks in key locations.

“We have a patient portal in which you can see any outstanding balance at a hospital or clinic and decide what you want to pay today,” says Mary Wickersham, vice president of central business office services at Avera in Sioux Falls, South Dakota.

“Patients can also extend their payments since we have a hyperlink that goes to the extended loan program if needed. With kiosks at our clinics, patients pull out their credit card and complete their copay. Nobody asks; they just automatically do it,” she says.

Staffing

Front- and back-end staff play an integral role in calculating payment estimates, collecting dollars in advance of procedures and tests, and communicating the often-puzzling connection between hospital charges for physician practice and provider-based department patients.

“One of our big challenges now is we’re bringing a lot of that back-end work to the front,” says Terri Etnier, director of system patient access at Indiana University Health in Bloomington, Indiana.

Centralizing processes

As facilities move toward centralized scheduling systems to manage reimbursement, some facilities are centralizing coding and billing processes.

“We don’t have a full comprehensive preregistration function for our clinics mainly due to volume. We’re piloting a preregistration group for our clinic visits to work accounts ahead of time since we are continuing to work toward automation,” says Katherine Cardwell, assistant vice president at Ochsner Health System in New Orleans.

“We have kiosks in some of our clinics. Epic has an e-precheck function where we can now do forms. You can sign forms on your phone, and make your payment and your copayment ahead of time. And you can actually get a barcode that you can just scan when you get to the clinic,” Cardwell says.

CEO, CFO of Missouri hospital resign over inappropriate reimbursements

https://www.beckershospitalreview.com/hospital-executive-moves/ceo-cfo-of-missouri-hospital-resign-over-inappropriate-reimbursements.html

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The CEO and CFO of Ranken Jordan Pediatric Bridge Hospital in Maryland Heights, Mo., have resigned after the hospital board discovered the executives violated the hospital’s paid time off policy, according to the St. Louis Post-Dispatch.

The hospital board requested and accepted the resignations of president and CEO Lauri Tanner and vice president and CFO Jean Bardwell, effective May 2, according to the report.

In a statement to the St. Louis Post-Dispatch, the hospital said the two executives were allegedly paid for time off “to which they were not entitled.” The hospital said the board is demanding Ms. Tanner and Ms. Bardwell repay the hospital, but it did not disclose the amount of inappropriate reimbursement the executives allegedly received.

The board’s executive committee initially identified the potential irregularities, and the board subsequently launched an investigation, which allegedly revealed the two executives violated hospital policy, according to the report.

To help prevent a similar issue from occurring in the future, the hospital has put corrective measures in place.

Ranken Jordan Pediatric Bridge Hospital COO Brett Moorehouse has been named interim president and CEO, and a hospital board member will serve as interim CFO, according to the St. Louis Business Journal.