INCREASING HOSPITAL POS

COLLECTIONS
Project for the Lean Six Sigma Green Belt course
Contents
Introduction .................................................................................................................................................. 2
Data tables ....................................................................................................................................................4
Exercises ........................................................................................................................................................ 6

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Introduction

Holistic Health Systems (HHS) operates 39 hospital facilities and clinics. The
executive team has been reviewing key metrics over the last year and identified a
need to improve Point of Service Collections or simply known as POS (pronounced
“P-O-S”). POS is a patient payment that is received within 7 days after discharge.
Increasing POS is important for HHS because hospitals are 60% less likely to
receive payment once the patient leaves the hospital. The cost to collect on the
patient’s account continues to go up while the chance of actually collecting
payment goes down if there is a delay in collecting the payment after the
patient’s discharge. Therefore, it is better to not delay collecting the payment.

Increasing POS reduces Bad Debts, provides a better cash position, reduces
expenses, and increases patient satisfaction when conducted properly.

POS is calculated by dividing POS Payments by Total Patient Cash Collected.HHS

has identified the industry median benchmark for POS as 13.6% and the top 10%
POS benchmark as 41.4%. HHS’s current POS performance is 35.6% and the
executive team has determined that a 5 percentage point increase is needed to
stay competitive (target = 40.6%). A Lean Six Sigma team was formed.

POS is a metric that heavily relies on the Patient Access team or PA. PA is
responsible for several tasks—patient scheduling, registration, and financial
clearance. The “Scheduling” tasks are typically completed by a centralized PA
team for multiple hospital facilities. During Scheduling, PA reps receive a doctor’s
order for a patient. The order is like a permission slip for specific medical services
the doctor deems necessary. The doctor or even the patient related to the order
can call Scheduling to reserve an appointment for the services that correspond to
what is written in the order. PA reps need to verify that the order is complete and
accurate, coordinate time for services, and provide patients with pre-service
instructions. After patient’s information is logged into the scheduling system, it

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will queue up to the PA registration team to complete the registration process. PA
will call the patient and confirm the identity, collect demographics such as
address, family, emergency contact, etc. PA registration will also confirm the
patient’s health insurance provider(s). PA registration can be completed at a
hospital facility or by a centralized team. Lastly, PA Financial Clearance will verify
patient health benefits to ensure they exist and to determine if the procedure or
service for the patient is covered. If authorization is required, the PA Financial
Clearance will request authorization for services from the patient’s health
insurance provider. Services performed without authorization lead to rejected
claims. Also during PA Financial Clearance, the PA rep will Counsel the patient
about their liability (how much their insurance provider says they need to pay for
the services) and collect the payment. Any payment received is considered POS
since it’s before 7 days post discharge. Financial clearance can also be performed
at the hospital facilities or by a centralized team.

Summary patient cash data for HHS’s 39 hospital facilities for a year is presented
in Table 1. The table also indicates if the PA team for each facility is centralized or
not.

Table 2 provides an overall monthly trend for POS Performance

The team identified the facilities with POS performance above the target and
researched the activities they have in place hoping to find commonalities or key
drivers. They are:

 ensure proper patient education on benefits and liability

 ask for payment
 have a financial counseling policy
 reduce number of patients that leave without financial clearance
 have accurate tools to help estimate Patient Liability or Responsibility
 utilize devices that allow patient collections at patient bedside

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Data Tables

Table 1: 2015 POS by Facility

Facility POS Payments All Patient Payments POS% Centralized Teams
FVR $1,372,015 $6,860,076 20% Yes
LAK $1,301,746 $3,348,748 39% Yes
PLA $2,964,730 $6,854,164 43% Yes
CGH $625,428 $1,709,452 37% Yes
FLO $849,646 $2,141,211 40% Yes
DEL $2,324,347 $7,824,857 30% Yes
GSM $2,621,784 $9,710,312 27% Yes
PBG $1,713,107 $6,062,173 28% Yes
SMH $5,936,564 $10,355,241 57% Yes
HIA $1,215,112 $2,250,807 54% Yes
PGH $2,234,134 $5,395,099 41% Yes
MAN $1,311,286 $3,611,438 36% Yes
MOD $2,997,636 $7,494,091 40% Yes
WBO $2,273,401 $8,743,852 26% Yes
LOM $2,358,653 $8,133,287 29% Yes
BAR $1,457,038 $5,286,184 28% Yes
DES $2,676,236 $9,581,654 28% Yes
IND $1,076,377 $2,979,026 36% Yes
DHW $2,145,483 $5,249,186 41% Yes
ECH $2,428,480 $7,833,806 31% Yes
HHH $2,253,084 $7,080,683 32% Yes
SCH $548,628 $1,739,024 32% Yes
GBH $2,455,353 $7,262,268 34% Yes
BMC $3,486,532 $13,946,130 25% Yes
CYF $4,534,470 $10,796,357 42% No
DHF $2,416,085 $4,624,894 52% No
FRH $2,182,243 $6,929,016 31% No
HNM $5,600,722 $12,446,048 45% No
LPX $3,379,727 $9,134,398 37% No
NMC $1,946,885 $4,378,487 44% No
PMC $2,885,804 $9,188,848 31% No
PPH $1,969,620 $3,939,240 50% No
PRV $6,015,807 $12,253,503 49% No
SES $1,940,017 $4,971,199 39% No
SFH $3,254,250 $7,850,558 41% No
SIE $3,051,755 $6,999,804 44% No
SRM $2,658,292 $10,909,840 24% No
SVM $1,606,482 $6,573,344 24% No
TWI $1,297,858 $5,225,755 25% No

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Table 2: 2015-2016 POS Trending

POS Payments All Patient Payments

Jan-14 $8,198,401 $22,105,614
Feb-14 $6,409,335 $20,449,785
Mar-14 $7,452,507 $25,357,473
Apr-14 $7,853,058 $24,320,414
May-14 $7,277,931 $24,815,250
Jun-14 $8,975,992 $20,309,240
Jul-14 $7,349,353 $24,904,346
Aug-14 $6,804,829 $23,349,092
Sep-14 $7,898,465 $20,829,620
Oct-14 $7,888,816 $18,506,142
Nov-14 $5,834,679 $17,386,881
Dec-14 $9,021,591 $18,659,237
Jan-15 $8,717,536 $18,956,764
Feb-15 $6,623,228 $19,008,749
Mar-15 $7,696,772 $22,971,163
Apr-15 $8,312,773 $23,437,612
May-15 $9,028,170 $21,358,646
Jun-15 $7,436,050 $22,168,016
Jul-15 $7,852,119 $21,971,590
Aug-15 $6,933,100 $23,650,610
Sep-15 $8,623,086 $26,860,403
Oct-15 $7,850,627 $21,346,585
Nov-15 $7,691,110 $23,004,295
Dec-15 $8,602,245 $22,939,623

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Exercises

Read case study then answer the following questions

Exercise 1

Process Stability

Using the data given in Table 2, determine if the POS performance is stable using a
control chart.

Explain why you used the type of control chart you selected.

Exercise 2

Scope Opportunity

Using the data given in Table 1, how would you scope the focus area of the
project?

Exercise 3

Testing a Theory

Use the data from Table 1 and conduct a hypothesis test to determine if
centralized teams impact POS collections.

Exercise 4

Solution Categories

Based on the information provided what could be affinity categories for the key
drivers that impact POS performance?

This Project is a part of your assessment. Good Luck!

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