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P006: Office of Facilities Management (FY18 Parent)

P006: Percent of eligible third-party revenue collected at all agency facilities

Current Value

88.1%

FY 2018

Definition

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Story Behind the Curve

  • The Affordable Care Act increased the number of insured nationally. This increase puts more emphasis on third‐party billing and collections.
  • Collection of revenue is important to maintain services across the state. Greater revenue collection allows NMDOH to provide an enhanced level of care to our consumers.
  • The state's revenue fluctuates each year, and as a result the amount of General Fund appropriated to NMDOH is directly affected. NMDOH must strive to collect on other eligible revenue.
  • The FY18 eligible third‐party collection rate is as follows:
    • Quarter 1:  85%
    • Quarter 2:  85.0%
    • Quarter 3:  93.1%
    • Quarter 4:  89.5%
    • FY18: 88.1%

        The target of 93% was not met.

  • Facilities maintained focus on revenue collection through regular meetings with managed care organizations to address billing/payment issues. Monthly actual and projected revenue reports for each facility/program were reviewed by the Administrative Services Division and discussions were ongoing with each Finance Director to assist with resolving collection issues. 
  • There are challenges with collecting revenue timely and efficiently at each facility.  Issues with billing for service types that are not contractually recognized between NMDOH and managed care organizations, claims processing, and billing/collection staff turnover are all contributing factors to a lower collection rate. The strategies and actions in place will continue.

Partners

  • Facility and Community Program Finance Directors and billing/collection staff
  • Managed care organizations
  • Commercial insurance providers
  • New Mexico Department of Health Human Resources Bureau
  • New Mexico Department of Health Administrative Services Division
  • New Mexico Human Services Department

What Works

  • Regular communication with the facilities and managed care organizations to resolve claims issues and outstanding payments.
  • Periodic communication between NMDOH and the New Mexico Human Services Department to resolve payment issues that occur with the managed care organization contracts, and to ensure regulatory and contract requirements are being met.
  • Sharing best practices and frequent collaboration among the facilities.
  • Dedicated staff focused on outstanding claims, questioning discrepancies, and following‐up on payments consistently and timely.
  • Monthly reconciliation of revenue to identify unpaid claims and address issues preventing payment.

Strategy

  • Communicate at least monthly, and in some cases weekly, with managed care organizations and third‐party payers on unresolved claims.
  • Work with the New Mexico Human Services Department to address payment issues that occur with managed care organizations.
  • Assess personnel resources for maximum efficiency in medical coding, billing, and revenue collection efforts.
  • Perform monthly reconciliation of revenue for consistent monitoring of earned income and revenue collection.

Action Plan

  • Q1‐Q4: Facilities will record revenue on a monthly basis following the new draft policy “Recording Patient Revenue and Accounts Receivable." Completed.
  • Q1‐Q4: Administrative Services Division will review monthly revenue actual and projected collections reports prepared by facilities for collection rate. The Administrative Services Division will have discussions with each Facility Finance Director and Administrator regarding resolutions when rates fall below the target. Completed.
  • Q4: Facilities and the Administrative Services Division will review collection efforts of aging medical claims prior to writing off revenue. Completed.

FY17 Annual Progress Summary

  • In FY17, the percent of eligible third-party revenue collected at all agency facilities was 92.0%.  This annual result met the target of a 92.0% collection rate.
  • Although the target of 92.0% was met, NMDOH continues to face challenges in collecting revenue timely and efficiently at each facility due to claims rejections that are occurring and being unable to retain highly skilled medical billing staff.
  • NMDOH continues to strengthen collection efforts. 

FY18 Annual Progress Summary

  • In FY18, the percent of eligible third-party revenue collected at all agency facilities was 88.1%.  This annual result did not meet the 93% target collection rate.
  • The NMDOH Facilities and Community Program continued to work through challenges in meeting financial goals. The Sequoyah Adolescent Treatment Center experienced a lower collection rate as a result of managed care organizations' system errors, which take a significant amount of time to resolve, and MCO denials of claims due to medical necessity. The New Mexico Behavioral Health Institute had a high turnover rate of biller and insurance follow-up specialist positions, which impacted collection rates. 
  • Whereas the Turquoise Lodge Hospital is not Joint Commission certified and unable to receive Medicaid payments for medical detox, in FY18 the New Mexico Human Services Department instructed managed care organizations to regard the Turquoise Lodge Hospital as an Institution of Mental Disease (IMD). Their IMD status now allows for Medicaid payments and collaboration with managed care organizations has begun to negotiate a comprehensive daily rate and set their systems up to accomodate this change; collections are expected to improve for Turquoise Lodge next Fiscal Year.
  • The New Mexico Rehabilitation Center made significant progress, more than doubling collections as compared to FY17, by refining billing procedures and aggressively working aged accounts while having continuous follow up with managed care organizations. 

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