At this month's financials meeting, there was a brainstorming session for ideas on 1) how expenses can be reduced and 2) how reimbursement can be improved at LiveWell. Each director attending the meeting was asked to propose three ideas next month with at least one idea from each category: 1) Reducing Expenses and 2) Increasing Reimbursement; however, each director must bring a total of three proposals.

At next month's financials, the group will review all proposals and prioritize the top three from each of the two categories. All the directors are motivated to make the best proposals next month and you are excited because as the HIM director, you feel that insurance denials are a good target for improving reimbursement, and you've already been reviewing Computer Assisted Coding, which if deployed would reduce expenses. Another idea on physician queries crosses your mind and you are ready to develop your proposals.

#2 Decreasing Expenses: Computer-Assisted Coding

Your research with CoCo's CAC has provided useful information. You will be able to use CAC on 50% of outpatient lab/radiology accounts. CoCo's CAC can be purchased for $45,000, on-site training for CoCo's is $8,500, and an interface to the financial system is needed at $12,000. Calculate an annual coding expense reduction for the first two years (the year of purchase plus the following year). Make the following assumptions:

• Three full-time outpatient coders are on staff at LiveWell.
• Staffing reduced by 50% with CAC.
• The average hourly wage is $19.00.
• Full-time equivalent hours are 2080 annually.
• Annual benefits for a full-time staff member equals $12,000.

#3 Increasing Revenue with Successful Physician Queries

Careful research shows that only a portion of physician office accounts justify a provider query. At this time, only half of the queries sent to providers result in a financial benefit via reimbursement increase. To calculate an annual increase in revenue, make the following assumptions:

• 500 physician accounts justify a provider query each quarter.
• 500 written and prepared queries require 125 staff hours. Hourly salary is $19 hour.
• There are four quarters in a year.
• Half of those queries will result in a reimbursement increase.
• Successful reimbursement increases are broken down as follows:
• 25% result in $20 more revenue
• 25% result in $10 more revenue
• 20% result in $30 more revenue
• 15% result in $25 more revenue
• 15% result in $100 more revenue