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Home > Resources > eNews > Mar 2000 |
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The Managed Care Insider eNews Volume Two Number 3 March 2000 PART TWO of TWO Welcome to The Managed Care Insider eNews. You are receiving this because you have subscribed; the eNews is never sent unsolicited. Subscribe/unsubscribe information can be found at the end of this eNews. The Managed Care Insider eNews is published, copyrighted, and owned by The Scheur Management Group, Inc. (SMG), http://www.scheur.com and is distributed monthly, free to subscribers. If you wish to forward this edition, you may do so only if the edition is forwarded in its entirety. No reproduction of any part of this publication is permitted without the express permission of the publishers. ---------------------------------------------------------------- While the last edition of the Managed Care Insider eNews focused on people, this edition focuses on money. The premise is any healthcare business, health plan or organization relies on money to produce the services and products necessary to take care of its people. In this edition we feature the so-called "closet entrepreneur" within the healthcare industry and his/her quest to find the money to make the business succeed. Part Two of this edition discusses, from a managed care organization perspective, why it's important to "Follow the Money." As always, we encourage our readers to send their comments to us at insider@scheur.com ---------------------------------------------------------------- Why Plans Should "Follow the Money" By Robin McElfatrick, Vice-President, Scheur Management Group Premiums comprise the overwhelmingly greatest portion of a health plan's income, yet no one person or department is typically responsible for managing that resource. Instead, the processes of installing account and individual business, enrolling members and billing and collecting premiums are spread across several departments and divisions, often with differing, and sometimes vague, priorities. Plans frequently lack, or are want to agree upon, the basic corporate policies that form the "rules" for controlling premium income. Management of the various functions across this business process continuum is diverse and sometimes fragmented. In most instances, no one person is strategically assigned to "following the money" to assure it is collected and used effectively. I can't count the times that I've come across plans that don't make it policy and routine practice to collect premium prior to groups' effective dates. One would think that the term "prepaid healthcare" bespeaks such a requirement, but often the zeal to market as late in the month as possible, for effective dates the subsequent month, takes precedence over prepayment. Once premium checks are received, they sometimes sit on someone's desk awaiting deposit until all paperwork is completed and signed. Why not deposit checks and benefit from the cash flow while the specifics are being worked out? Billing schedules don't always allow enough lead time for groups and individuals to remit next month's premium prior to the first of the month. Then, as premiums are remitted after the first of the next month, there is the dilemma of whether the remitter is in arrears or simply responding to a lenient schedule for payment. Should these remitters be placed "on hold," implying no claims payments until premium is collected and posted? If so, how late in the next month's cycle? This scenario, as one can imagine, often evolves into a situation where the plan is routinely one month behind in collecting its largest source of income. For those groups who remain in premium arrearage and must be terminated for lack of payment, the amount of uncollected premium can be larger as can the value of "unfunded care" (claims paid for dates when no accompanying premium was remitted). The plan is then in the position of trying to collect overdue premium from a canceled group that has no impetus, vis-a-vis continued coverage, to remit. Former members and/or groups are also then expected to pay for unfunded claims. Often plans wind up writing off at least portions of this premium receivable and unfunded claims expense. Sound familiar? The next likely place for the "money trail" to be obfuscated, usually to the monetary detriment of the plan, is at the point where membership and remitted premium are reconciled to bills. Some plans use the term "reconciliation" to mean that the premium was collected and posted. Plans should challenge themselves to adopt the broader definition of the term to mean that the members represented in the plan's bill are those for whom the account remitted, in the amounts billed, for the period billed, eliminating any balances forward, minus any enrollment changes that have occurred within the plan's allowed time frame for such changes. How often do group accounts carry a premium balance forward, or take double credit for a member that they've noted as disenrolling though the plan has already anticipated this change in its bill? Do groups assume retrospective disenrollment farther back than the plan permits? The bottom line is that by "following the money," assuring appropriate corporate policies and effectively managing the entire business process, plans can mitigate premium "leakage" and maximize their greatest resource. (A more complete article on how to "Follow the Money" will be included in the next print issue of The Managed Care Insider. The print editions are available online at the scheur.com web site for subscribers only. To find out how you can become a subscriber and have access to this and other information, please visit our site: http://www.scheur.com ) About the author: Robin McElfatrick 's wealth of senior management experience encompasses 23 years in HMOs, indemnity plans and managed care consulting. She serves Scheur Management Group clients in organizational analysis, operations, medical management, MIS assessments, claims and coordination of benefits. ---------------------------------------------------------------- What's New at SMG? Speaking Engagements: April 11, 2000 2nd Annual Baptist HealthSource Seminar Medical Call Centers: Survival Issues Hampton Inn, Pensacola Beach, FL Topic: "Providers and Managed Care: Remedy for a Sick Business" Speaker: Barry S. Scheur URL: http://www.bhcpns.org/callcenterseminar If you would like more information on contracting with an SMG expert for your next event, Contact nbelle@scheur.com Have you taken the MCO Challenge yet? Stop by our site and test the fitness of your health plan Now! It's free and you'll find it at http://www.scheur.com ---------------------------------------------------------------- Sights and Sounds on the Net: SMG has no ownership of, nor does it endorse the following sites. This information is presented as a resource for subscribers. Since our theme this issue is following and managing the money, and how the changes in the healthcare industry may impact on new business formation, we have included sites which cover these areas. A website for senior financial executives at http://www.cfonet.com. A European magazine for financial directors at http://www.cfoeurope.com Healthcare Financial Management Association at http://www.hfma.org American Society for Healthcare Risk Management at http://www.ashrm.org National Capitation Data at http://www.nhionline.net/data/data.htm. Only a portion of the report is available on site for free. ---------------------------------------------------------------- End of PART TWO of TWO, The Managed Care Insider eNews, Volume Two, Number 3. Scheur Management Group (SMG) is one of the most experienced specialized healthcare operations management and business revitalization consulting firms in the country. Our expertise is in time-sensitive analyses, strategic business and market planning, operational re-engineering, and communications, as well as implementation of start-ups, expansions, and new products. The firm's clients cover the spectrum of insurers, managed care organizations, physician groups, integrated delivery systems, hospitals, employers, governmental entities, vendors, and other providers. Contributors to this edition are Barry Scheur and Robin McElfatrick. Editing and Research by Judith Jaffe. Production Coordination by Nancy K. Belle. TO SUBSCRIBE: visit http://www.scheur.com/smghome.nsf/webcontent/ezine.html or send e-mail to insider@scheur.com with the word SUBSCRIBE in the subject and name, email, company, title, and country in the message. TO UNSUBSCRIBE: send email message to insider@scheur.com with the word UNSUBSCRIBE in the subject. Please take a minute to visit our eNews page at http://www.scheur.com/smghome.nsf/webcontent/ezine.html for archives, subscriber information and to RATE our ezine. Get up-to-the-minute health care news on-line at www.scheur.com |
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