During the month-end close process of 3rd party accounts for a rural facility (<100 beds), it was noticed that the reimbursement ratios for Medicaid managed care were declining. Further investigation identified a single major payer that was paying the hospital only 10% of what was contractually agreed upon for high volume/high-intensity emergency room procedures that amounted to $300k annually. The provider was able to recoup lost revenues for the life of the current contract in place for the previous 3 years.

The client had a substance use disorder unit where beds were not licensed as acute due to a change in state regulations, but Medicare approved for acute services. While this is very unusual and rare, the corporate office reimbursement team wanted to reserve a $4 million liability for the negative impact to medical education reimbursement for the error in bed count. After a significant review of regulations and case law by LMC, it was identified that the impact was <$500k. This was further reviewed and agreed upon by the provider’s external legal advisors, and later accepted during Medicare cost report settlement. The hospital was able to reverse over $3.5 million of the liability.

The client started a new medical education program 3 years before Medicare finalized cost reports and the program reimbursement. Medicare significantly reduced the per resident amount of direct medical education reimbursement the provider was entitled to. LMC had a similar issue with another client and was able to work with the same law firm to appeal the rate. The appeal was successful and increased the hospital’s reimbursement by $1 million annually for the life of the program.

The client requested assistance to complete cost reports for 2 of their 8 facilities. New templates were developed that assisted in the flowthrough of data to other payers’ cost reports that aided in efficiencies and accuracy, as well as supporting analytics for determining future rates and reserves.

The client requested LMC develop new excel templates for physician compensation. The previous finance director resigned, and current models were complicated causing concern for accuracy. In addition, the physicians did not understand the models to determine if they would receive a bonus or needed to pay back a deficit each quarter. The evaluation identified several inconsistencies with the 180 physician contracts that created non-compliance of remuneration. Inconsistencies included various terms of the contract within specialties, when rates changed, various guarantee periods, guaranteed minimum salary, and productivity rate updates. Current templates did not provide a summary, in addition, other physician payments unrelated to productivity were included in the models that caused financial reporting errors. Excel templates were cumbersome and delayed the distribution of data and limited time for analysis. Solutions included a web-based compensation software that maintained the integrity and accuracy of modeling, had minimal manual intervention and reconciliation reporting that freed up staff to do analysis, work with physicians to understand their data and eliminate the need to hire additional staff to accomplish this overhead task.

Productivity contracts defined Medicare wRVUs would be used for compensation calculations. The hospital’s data did not adjust wRVUs that Medicare uses for payment, such as multiple payment procedures and timely wRVU updates. This resulted in physicians being overpaid $4 million annually beyond what the hospital received for their services, which increases Medicare regulatory risk. LMC worked with the vendor to create a new process in addition to a check-and-balance procedure.

The client worked on “cleaning up” old accounts receivable and establishing new processes in preparation for a new EMR implementation. Significant improvements were made over the year but were not reflected in financial statements since the AR value template methodology did not take process changes into consideration. LMC worked with revenue cycle management to document their financial contribution for inclusion in financial statements. Auditors confirmed the $6 million of improvements during the year-end audit.

Facilitated team to improve AR net collections that included bi-weekly meetings of every leader in charge of areas that impact billing, coding, collections, and reporting. Meetings focused on evaluating data outcomes, presenting anomalies, brainstorming root causes, then providing solutions the following week. New accountability, dashboard reporting, and assessment tools were developed from this 14-week initiative.

LMC provided an Interim Director of Financial Planning that included budgeting & forecast, contracting & rate setting, productivity, and decision support. Many of these areas were recently combined, and the team had five directors in five years. Despite the staff’s commitment and hard work, the department lacked financial integrity and vision as to their responsibility. Over 18 months, the team was restructured and developed a renewed identity. Wins include restructured titles, pay and job descriptions; reduced duplication of duties (30%); improved data accuracy (to 100%); and improved the achievement of deadlines to 97%.

LMC provided an Interim VP of Finance for a 3-hospital medical center to maintain current initiatives and mentor various department directors until a permanent candidate was hired within 6 months. Changes in market conditions created an urgency to address concerns that added 1.5% improvement to the bottom line including throughput issues from ER to discharge, facilitating investigation into the triple increase in medical supply costs, and leading the team to improve AR net collections.

LMC provided an Interim Director of Reimbursement that evolved into working with the executive team through a $100 million accounting fraud discovery. All processes had to be examined, as well as remapping sub-systems into the general ledger to ensure proper financial statement reporting. Reimbursement and contracting outcomes were revised that obtained $17 million in additional income during the first 2 years.

The client was acquired by a larger system that was not familiar with the client’s reporting systems. The acquiring system integrated the client’s information into their reimbursement templates that indicated the client was under reserved for Blue Cross by $7 million. Significant review and validation from LMC proved the template picked up “net” in error rather than “gross”. As a result, the initial $7 million liability was reversed.

The client was acquired by a larger system with 4 other hospitals. The larger system was staffed in a “silo” structure where individuals performed very specific tasks. The organizational structure of the client had individuals responsible for complete processes. As a result, there were several tasks that were abandoned as the staff was integrated into the parent office. This resulted in an increase in unidentified cash not applied properly that impacted the bottom line, critical account reconciliations not performed, and risk of non-compliance to specific programs. Staff started to leave the organization out of frustration. LMC assisted with retaining current labor resources in addition to maintaining legacy systems and processes as the staff was integrated into their new duties.

LMC worked with a large national health system to assist their new member organizations in how to “maneuver” corporate, understand expectations, and leverage existing resources. The staff at the new member organizations typically believe they will be replaced, but soon realize the demands that will help take them to the next level. LMC has been critical in this process with the ability to maintain staffing resources at the member organization, assist in understanding the changes in reporting practices, and build the trust of the parent organization.