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Briefing: Using Performance Measures to Improve the Revenue Collection Process Date: 22 March 2007 Time: PowerPoint Presentation
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Briefing: Using Performance Measures to Improve the Revenue Collection Process Date: 22 March 2007 Time: 1300 - 1400. Agenda. Overview of VA and VHA Objectives of VHA Challenges to achieving objectives Improvements enacted Major accomplishments in revenue collections

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Briefing: Using Performance Measures to Improve the Revenue Collection Process

Date: 22 March 2007

Time: 1300 - 1400

  • Overview of VA and VHA
  • Objectives of VHA
  • Challenges to achieving objectives
  • Improvements enacted
  • Major accomplishments in revenue collections
  • Lessons learned
overview of va
Overview of VA
  • Department of Veterans Affairs (VA)
    • FY05 spending was $71.2 billion
      • $31.5 billion for health care
      • $37.1 billion for benefits
      • $148 million for the national cemetery system
    • Comprised of Veterans Health Administration (VHA), Veterans Benefits Administration (VBA) and National Cemetery Administration (NCA)
    • 64 million eligible for benefits (24 million veterans and 40 million family members or survivors of veterans)
    • The responsibility to care for veterans, spouses, survivors and dependents can last a long time
      • Five children of Civil War veterans still draw VA benefits
      • About 440 children and widows of Spanish-American War veterans still receive VA compensation or pensions
overview of vha
Overview of VHA
  • Veterans Health Administration (VHA)
    • 7.7 million enrolled veterans
    • 150+ Veterans Affairs Medical Centers (VAMCs)
    • 1,300+ sites of care in 21 Veterans Integrated Service Networks (VISNs), including:
      • 875 ambulatory care and community-based outpatient clinics
      • 136 nursing homes
      • 43 residential rehabilitation treatment programs
      • 206 Veterans Centers
      • 88 comprehensive home-care programs
    • In FY05:
      • 217,000+ staff provided care to 5 million+ patients
      • inpatient facilities treated 587,000 patients
      • outpatient clinics registered nearly 57.5 million visits
map of visns
Map of VISNs

21 Veterans Integrated Service Networks

medical care collection fund mccf
Medical Care Collection Fund (MCCF)
  • Balanced Budget Act of 1997 authorized VHA to:
    • Collect from third party health insurance firms for nonservice-connected care
    • Collect co-payments from veterans for prescriptions and care
    • Return collections (previously returned to Department of Treasury) to facilities to supplement medical care services
    • Offset appropriations based on collections of previous year
  • In FY06, VHA appropriated $31.697B for health care, of which $1.959B or 6.2% was derived from MCCF collections
medical care collection fund
Medical Care Collection Fund
  • Veterans
    • 7.7 million enrollees
    • 5.4 million unique patients in FY06
  • Insurance Rates
    • Approximately 30% of veterans who use VHA health care have billable third party insurance
  • Billings in FY06
    • Total--$3.937B (35,744,904 bills)
    • First party--$1.052B (22,836,068 bills)
    • Third party--$2.885B (12,908,836 bills)
  • Collections in FY06
    • Total--$1.959B
    • First party (Pharmacy, Inpatient/Outpatient Copays, Long Term Care Copays)--$.863B
    • Third party--$1.096B
vha objectives and revenue collection improvements
VHA Objectives and Revenue Collection Improvements
  • Organizational
  • Process and policy
  • Technology
organizational objectives
Organizational Objectives
  • Fulfill VHA's mission to provide high-quality medical, surgical, and rehabilitative services to VHA customers
  • Ensure that VHA has the right departments in place to meet or exceed the expectations of its stakeholders regarding:
    • Quality of health care delivery
    • Customer service
    • Finances
    • Efficiency and effectiveness of business operations
    • Compliance with regulations
organizational improvements
Organizational Improvements
  • Secretary of the Department of Veterans Affairs established Chief Business Office (CBO) in 2002 to:
    • Develop administrative processes, policy regulations and directives associated with the delivery of VA health benefit programs
    • Act as principal health benefits administration advisor to Under Secretary for Health
    • Provide direction to VHA personnel in the collection of revenues associated with health care programs
    • Oversee and be accountable for revenue-cycle outcomes at the national level
    • Lead a business-focused cultural change in VHA to improve billing and collections process to increase collections
vha revenue cycle








  • Patient Registration
  • Insurance Identification
  • Insurance Verification
  • Pre-certification
  • Certification
  • Continued Stay Reviews
  • Coding & Documentation
  • Establishment of Receivables
  • Payment Processing
  • Collection Correspondence & Inquiries
  • Referrals of Indebtedness & Appeals
  • Bill Creation
  • Claims Correspondence & Inquiries
VHA Revenue Cycle

VHA uses the same revenue cycle and performs many of the same collection activities as the private sector, although there are unique aspects (inability to bill Medicare and for service-connected treatment)

development of annual collection targets
Development of Annual Collection Targets
  • Collaborative approach with Executive Support
    • Estimated potential for each station using a data-driven regression model and patient-level data for distribution of annual collection target
  • Input from stakeholder community:
    • Network representatives
    • VA Office of Budget
    • VHA Policy and Planning
    • Deputy Under Secretary for Health for Operations and Management
  • Regression Model included all revenue drivers
    • Non service-connected volume (major driver)
    • Acuity mix
    • Collectible insurance coverage
    • Demographics (age, gender, income, priority level)
    • Third Party Performance Index (based on A/R>90, GDRO, and DTB)
process and policy objectives
Process and Policy Objectives
  • Increase collections to support delivery of health care to our nation’s veterans
  • Improve revenue-cycle management process
  • Drive outcomes using industry-based performance standards
  • Foster a business-focused cultural change in VHA to improve billing and collections
  • Establish accountability at the medical center level
process and policy improvements
Process and Policy Improvements
  • Implemented industry-based performance measures (Hospital Accounts Receivable Analysis, or HARA) to drive outcomes:
    • Gross Days Revenue Outstanding (GDRO)
    • Days to Bill
    • Accounts Receivable (AR) > 90
  • Established targets for each measure at the national, VISN and medical center levels
  • Obtained executive-level buy-in for the performance measures:
    • Incorporated performance measure targets into Medical Center Directors’ Performance Standards
    • Report performance results monthly to the Deputy Under Secretary for Health and Deputy Secretary, and quarterly to the Secretary
technology objectives
Technology Objectives
  • Provide VHA with performance data that are:
    • Accurate, complete and color-coded according to achievement of goals
    • Categorized by different dimensions: location, performance metric and time
  • Create single repository of data that is:
    • Accessible VHA-wide
    • User-friendly
    • Web-based
    • Populated by a data warehouse
    • Tabular and graphical
    • Capable of exporting data to MS Excel
    • Customizable
technology improvements
Technology Improvements
  • Performance and Operational Web-Enabled Reports (POWER) system developed to:
    • Integrate performance data from several sources to improve data accuracy, integrity and completeness
    • Act as a central repository of data for VHA-wide use
    • Allow decision makers to easily monitor billing and revenue collections performance data at all levels – national, VISN and medical center
  • VistA Data Extract implemented to:
    • Provide additional and more granular billings and collections data in POWER
    • Obtain source data on a daily (more timely) basis
revenue optimization objectives
Revenue Optimization Objectives
  • Enhance revenue collections by:
    • Engaging key VHA leaders and stakeholders in planning and implementation efforts
    • Incorporating private-sector best practices in VHA’s revenue collection activities
    • Creating RAR teams to assist VISNs and VAMCs directly in increasing collections
    • Identifying lower performing VAMCs and develop plans to assist them in achieving their goals
    • Establishing a data-driven approach to determining collections potential and improvement
collection results fy00 07 fiscal year percentage increase
Collection Results, FY00-07 (Fiscal Year Percentage Increase)











*FY Expected Results


First and Third Party Collections, FY04-07(Fiscal Year Percentage Increase)










  • In this chart, First Party Collections include Inpatient/Outpatient Copayments, Pharmacy Copayments, and Long Term Care (LTC)
  • Separate First Party and Third Party Funds were established in FY 2004
  • FY04-06 represent actual figures; FY07 are Expected Results
fy 2007 key metrics panel with targets
FY 2007 Key Metrics Panel with Targets

*** Separate National and Department of Veterans Affairs Medical Center (VAMC) targets will be established for this metric only. All other targets will have the same National and VAMC targets.

cbo accomplishments
CBO Accomplishments
  • Increased collections and reduced revenue-cycle time
  • Timely reporting through daily automated data transfer from all VHA facilities into one system
  • Comparative, trend, and forecasting analysis by storing historical data in repository
  • Better data quality through standardization, statistical comparisons, and exception identification
  • Revenue performance that approaches private-sector levels, within VHA limitations
  • New data-driven model for developing national, VISN, and medical center goals by fund type implemented for FY06
  • Improved accountability by VISN Directors and others by adoption of performance metrics
challenges to achieving objectives
Challenges to Achieving Objectives
  • Uniqueness of VHA revenue collections processes does not allow for easy comparison with private-sector revenue cycle
    • Veteran priority groups
    • Patients with billable insurance (about 30% of VHA population)
    • Inability to bill Medicare (about 70% of VHA population)
    • Absence of balance billing
  • VHA’s Veterans Information System and Technology Architecture (VistA) system collects both medical and revenue information
    • Designed for clinical uses, not to monitor and improve revenue-cycle processes
    • Captures local revenue cycle data; requires extraction of data on a daily basis from over 150 medical centers having varied business processes
tactical initiatives
Tactical Initiatives





  • Improved Clinician and Staff Education Support
  • Physician Documentation and Record Completion
  • Coding Improvements
  • Mitigate VistA Vulnerabilities with software and business process enhancements
  • E-Business Initiatives
  • E-Pharmacy
  • E-Medicare Remittance Advice (MRA)
  • E-Claims
  • E-Payments
  • E-Denials
  • National Revenue Call Center
  • DoD Billing
  • Non-VHA/Fee Billing
  • Performance Metrics
  • Stakeholder Education
  • CBO Revenue Activities Review Teams
  • Organizational Change Management
  • AR Management Enhancements
  • Enrollment System Redesign
  • National Insurance Framework
  • Service-Connected Objective Update Tool
  • Formal Denials Management
major strategic initiatives

Consolidated Patient

Account Centers

Revenue Improvement

Demonstration Project

Charge Capture

and Clinical


Patient Financial

Services System

National Revenue

Contracts Office

Major Strategic Initiatives
consolidated patient account center
Focused on facility-based patient access to insured population

Modified existing consolidated operation in VISN 6

Implemented new revenue operations management structure

Defined & implemented standardized functions & processes

Negotiated National Labor MOUs

Applied industry-based, VA-refined performance measures (productivity & quality)

Implemented comprehensive employee training

Expanded denials management interventions

Established payer analysis reporting services

Cultivated payer relations – contract modeling

Enhanced management decision utilities

Performed an analysis of patient case mix impact on revenue cycle

Increased FY06 CPAC collections by $10.3 million (99% of goal) over FY05

Collected 108% of FYTD07 budgeted goal through February

Consolidated Patient Account Center
revenue improvement demonstration project
Revenue Improvement Demonstration Project
  • Objective: Contractor-supported revenue process modeling and business re-engineering effort
  • Performance Based Contract Awarded February 2006
    • Vendor retains percentage of collections
    • Overall vendor earnings will be capped
    • Expected 5 yr return to VA $28M - $44M
  • June 2006 Phase I – Vendor Operational Assessment Completed
  • October 2006 Phase II
    • Business infrastructure implementation and benefit realization underway
  • September 2007 Phase II continued
    • Demonstrate sustainability of (measurable) improved operational performance
charge capture and clinical documentation
Charge Capture and Clinical Documentation
  • Published guidelines for medical record documentation and billing
  • Robust training program for all staff impacting revenue; resulted in 300+ training initiatives in FY06
  • Revised rates and charges processes to assure more timely release to maximize revenue
  • Developed contract vehicles to enhance Veterans Information Systems and Technology Architecture (VistA) Integrated Billing (IB) through business process and technology changes
patient financial services system pfss
Patient Financial Services System (PFSS)
  • PFSS resulted in development of integrated commercial billing tool:
    • Created an industry standard capability for VA revenue process
    • Refined financial reporting tools
    • Tied to multiple financial and clinical systems to streamline revenue process
    • Made service-connected/nonservice-connected (SC/NSC) determination
    • Enabled industry comparisons
  • Changes in budget resulted in “hibernation” and re-assessment of future structure
national revenue contracts office
National Revenue Contracts Office
  • Objectives
    • Improve revenue contract performance to yield improved collections
    • Develop consistency in payment terms, expectations & performance standards
    • Establish proven tools, templates, and monitoring mechanisms
    • Effectively assess return on investment
    • Document/distribute vendor performance results
  • Initiatives
    • Coding BPA (FY 2005)
    • Insurance Identification & Verification National Blanket Purchase Agreement (BPA) (FY 2006)
    • Encoder/Documentation BPA Modification (FY 2007)
    • Accounts Receivable & Billing BPAs (FY 2007 in process)
    • VA/DoD contract vehicle collaboration
other initiatives improvements in coding staff recruitment and retention
Other Initiatives – Improvements in Coding Staff Recruitment and Retention
  • Hybrid Title 38
    • Provides direct hiring authority to expedite the hiring process
    • Permits staff to be awarded for obtaining credentials and higher education
  • Applied Hybrid Title 38 qualification standards across the occupation series during fall of 2006
    • 93% (1629) of coders have been boarded
    • 35% promotions were recommended
    • 25% employees were recommended for special advancement for achievement awards
    • Vacancies have gone from 199 in 2003 to 123 in 2006
    • Credentials have increased almost 10% over the same period
other initiatives health revenue center first party call center
Other Initiatives – Health Revenue CenterFirst Party Call Center
  • Located in Topeka, Kansas
  • Purpose
    • Improve service to veterans by responding to questions on copayment charges for care received through VA
    • Provide timely and accurate information from dedicated call agents committed to customer service
    • Provide a value added service that permits VISNs and Medical Centers to redirect resources to other revenue producing activities
  • Performance Metrics
    • Average Handle Time: FY04 10:03; FY06 7:33
    • Total Calls: FY04 80,082; FY06 1,072,098
    • Monthly Call Volume: FY04 18,600; FY06 89,345
    • HRC First Call Resolution:
      • FY04 79% referred to facilities 21%
      • FY06 89% referred to facilities 11%
    • Abandonment Rate: FY04 – 11%; FY06 – 2.2%
    • VISNs served: FY04 2; FY06 14 (FY07 21 Planned)
other initiatives national payer relations office npro
Other Initiatives – National Payer Relations Office (NPRO)
  • Essential industry revenue-generation capability
  • Ongoing development of a strategy to manage national payer relationship
  • Regional/National Payer Agreements
  • Finalized the Aetna national agreement in January 2007
  • Discussions with United Healthcare in progress
  • Completed 71 regional contracts with 8 in progress
  • Will result in approximately 65% of enrolled veterans with insurance covered under these agreements
other initiatives revenue activities review teams rar
Other Initiatives – Revenue Activities Review Teams (RAR)
  • Objective
    • Assist facilities with assessment and documentation of revenue-cycle opportunities
    • Provide follow-up for ongoing monitor of outcomes
  • Scope
    • Concentrate on processes, management reports, & controls
    • Develop detailed performance & collections improvement work plans
    • Communicate bi-weekly to ensure completion of action plans
  • Consistent findings
    • Resources and staffing shortages
    • Documentation/workload capture
    • Coding and billing backlogs
    • Leadership involvement
rar revenue analysis
RAR – Revenue Analysis
  • Inpatient medical/surgical caseload review mix/reimbursement changes
  • Outpatient same-day surgery review mix/reimb. changes
  • Outpatient encounter review volume/reimb. changes
  • Changes in inpatient/outpatient payer mix
  • eMRA outpatient reimbursements
  • Refunds and offsets
  • Vendor-generated revenues
  • Reimbursement-outsourced coding and billing backlogs
  • Changes in inpatient and outpatient Fee volume
  • VistA IB “holes”
rar success in visn 17
RAR – Success in VISN 17

Revenue Activities Review

rar success in visn 12
RAR – Success in VISN 12

Revenue Activities Review

rar success in san diego hcs
RAR – Success in San Diego HCS

Revenue Activities Review

lessons learned
Lessons Learned
  • Effective implementation of measures required buy-in from senior VHA leadership; maintained through monthly reporting
  • Performance measures coupled with a reliable business performance and operational Intranet-based reporting utility improved operational performance
  • Incorporation of performance measures and goals into Medical Center Directors’ Performance Standards has established accountability and improved operational performance
  • A reliable business performance and operational Intranet-based reporting system can improve data integrity and assist in analysis
  • Benchmarking has assisted in setting goals
  • Adoption of industry best practices has improved the effectiveness and efficiency of revenue collection