1. Using the template given in exhibit 1, add one additional overall benchmark (in addition to A/R Days) and one defect benchmark for each of the revenue cycle functions listed under the Defect Metrics header. Pick your metrics from exhibit 2 (You will have to recreate the table in Microsoft Word or Excel as part of you submission - see tips at end of this document). 2. Compare the benchmark values in your completed table from question 1 with the actual MRHS metric values given in exhibit 3. Discuss your results. Most important, suggest what actions might be implemented to improve revenue cycle performance. ? You will need to create two tables here. One table to conduct the hospital variance analysis and one to conduct the clinic variance analysis- see tips at end of this document.

Exhibit 1: Benchmarking Template

Andrew Mae has recently been hired as the vice president of Revenue Cycle Management for the Milwaukee Regional Health System (MRHS), an integrated system with approximately $2.5 billion in annual revenues. Located in the Milwaukee, Wisconsin, metropolitan area, MRHS consists of an academic medical center, two community hospitals, and 30 outpatient primary and specialty care clinics. Annually, the hospitals collectively see more than 40,000 admissions, approximately 100,000 emergency department visits, and nearly 1 million outpatient encounters, while the clinics receive more than 1.6 million visits. The vice president of Revenue Cycle Management is a newly created position at MRHS. In that role, Andrew will oversee the merger of the currently separate hospital and physician revenue cycle departments. Andrew has been directed by MRHS's CEO to accomplish two primary goals: (1) lower the overall costs of revenue cycle management and (2) improve the revenue cycle process. (For more information on revenue cycle management, see the Healthcare Financial Management Association website at www.hfma.org or the Medical Group Management Association website at www.mgma.com. Search the term revenue cycle at both websites.) Andrew understands that the first step in merging MRHS's separate revenue cycle departments is to alter the current perception that hospital and physician practice revenue cycles are inherently different. His goal in this regard is to illustrate the similarities and interdependencies among the revenue cycle processes to highlight what he believes to be the true determinants of revenue cycle success: (1) the collective hospital, physician, and revenue cycle staffs' effort to limit defects in the process and (2) the ability to identify, bill, and collect the correct net realizable value of each encounter. When asked about these statements, he explained that defects can be thought of as problems that impede the revenue cycle process, and net realizable value is the actual dollar amount expected to be collected from both patient and insurer for each service provided.Hospital Clinic Metric Definition Benchmark Benchmark Medical records Days in total discharged Gross dollars in accounts receivable 7.4 days 5.9 days not final billed unbilled/(Annual net patient revenue/ 365 days) Coding quality score No. of correct coding data elements input/ 96.5% 93.2% Total data elements required at coding Billing Initial denial rate No. of claims denied/No. of claims 4.9% 8.2% submitted Clean claim rate No. of claims that pass edits with no 76.8% 81.2% manual intervention/Total billed claims Payment posting Percent of payments Dollars posted electronically/ 86.7% 83.1% posted electronically Total payments posted Net days revenue in Dollars in credit balance/ 1.9 days 3.2 days credit balance (Annual net patient revenue/365 days) Credit balance reflects monies owed to payers because of improper billing.Hospital Clinic Metric Definition Benchmark Benchmark Overall Metrics A/R days Net patient accounts receivable/ 48.3 days 28.5 days (Annual net patient revenue/365 days) Percent of A/R greater Accounts receivable aged greater than 29.6% 19.0% than 90 days 90 days/Total accounts receivable Cost to collect Total revenue cycle costs/ 3.5% 4.2% Total cash collected Defect Metrics Scheduling Preregistration rate No. of patient encounters preregistered/ 84.8% 99.1% No. of scheduled patient encounters Insurance verification No. of verified encounters/ 90.0% 98.7% rate No. of registered encounters Registration Point-of-service Point-of-service cash collections/ 13.4% 36.2% collection rate Total patient cash collected Registration quality No. of correct patient demographic and 98.7% 99.4% score insurance data elements input/ Total data elements required at registration Case management Preauthorization denial No. of claims denied for no preauthorization/ 1.8% 0.7% rate No. of claims submitted Percent of medical Medical necessity write-offs/Total charges 0.4% 0.6% necessity write-offs Clinical charge processing Charge lag days Days between service date and posting of 3.6 days 5.1 days charge/Encounters billed Late charge % Charges posted more than 3 days after the 8.4% 78.6% date of service/ Total charges (continued)MRHS Hospitals MAHS Clinics Overall Metrics A/R days 45.4 days 26.3 days % of A/R greater than 90 days 21.5% 20.1% Cost to collect 2.9% 4.5% Defect Metrics Schoduling Preregistration rate 80.8% 99.9% Insurance verification rate 85.3% 100.0% Registration Point-of-service collection rate 8.7% 48.5% Registration quality score 91.6% 99.9% Case management Proauthorization denial rate 2.4% 0.3% Percent of medical necessity write-offs 0.7% 0.2% Clinical charge processing Charge lag days 3.2 days 6.8 days Late charge percent 2.1% 86.9% Medical records Days in total discharged not final billed 4.6 days 7.5 days Coding quality score 98.7% 90.2% Billing Initial denial rate 5.6% 78% Clean claim rate 72.4% 85.2% Payment posting Percent of payments posted electronically 90.1% 78.9% Net days revenue in credit balance 2.5 days 2.3 daysMetric Hospital Clinic Metric Definition Benchmark Benchmark Overall Metrics A/R days Net patient accounts 48.3 days 28.5 days receivable/(Annual patient service revenue/365 days) Defect Metrics Scheduling Registration Case management Clinical charge processing Medical records Billing Payment postingConsider using a table like this for answering question 1: Hospital Clinic Metric Category Metric Metric Definition Benchmark Benchmark Net patient accounts Overall Revenue A/R Days receivable / (Annual 48.3 Days 28.5 Days Cycle Metrics patient service/365 days) Defect Metrics Scheduling Registration Case Management Clinical Charge Processing Medical Records Billing Payment Posting Consider using a table like this for answering question 2. Metric Hospital Value* Benchmark Value Variance# A/R Days 45.4 days 48.3 days 2.9 days better than benchmark Remember you need to create 2 separate tables - 1 to conduct hospital variance analysis and I to conduct clinic variance analysis #For Variance column use green font color for "good" variances and red font color for "bad" variances