An Opportunity for Improvement
Air Medical Service (AMS)
The air medical services (AMS) program in this case experienced a leadership transition in 2012. The new leadership identified revenue cycle management as an opportunity for improvement. AMS leadership engaged an outside consultant to review the revenue cycle management performance.
The AMS program is structured as a consortium and the billing and reimbursement was historically handled by the Patient Financial Services (PFS) group at one of the sponsoring hospitals. Quick Med Claims (QMC) assumed responsibility for the billing and reimbursement process in 2013.
The AMS program completes more than 4,000 patient transports per year, including a mix of scene responses and interfacility transports. The leadership elected to transition a portion of the transport operation (1,200 transports and several bases) to an outsourced model.
During the implementation process, the QMC team identified several opportunities for improvement within the billing and reimbursement process:
- The reimbursement per transport was below $5,200. The performance was well below the national and regional benchmarks.
- There were a number of hospital driven processes that resulted in a negative impact on the billing and reimbursement performance.
- There were issues related to licensure and provider numbers that had not been identified by the PFS group.
- Program leadership was unable to obtain important financial information to support operational decision making.
- The charge structure was not consistent with the industry best practices and the levels were well below the range of charges in the region.
The QMC team worked with the client team to make a series of changes in the billing and reimbursement process:
- QMC assumed primary responsibility for the AMS billing and reimbursement process. The processes were changed to the QMC operating standard.
- QMC worked directly with program leadership to support resolution of the licensure questions and secure the appropriate provider numbers.
- QMC constructed a set of monthly reports to support management decision making and provides ad hoc reporting for specific queries.
- The QMC team provided clinical documentation training for the entire operation. The QMC team provides regular feedback to AMS program leadership regarding the quality of the documentation.
- There was an initial charge structure adjustment at the time of the transition. QMC provides regular feedback to program leadership to support annual evaluation of the charge structure.
An Opportunity for Improvement
At the end of the first year with QMC leading an outsourced approach to billing and reimbursement services, the following results were realized:
- The Average Reimbursement Per Transport was over $6,000. This represented an increase in excess of 16% and generates an additional $1 million in revenue for one division of the AMS program.
- The performance continues to improve each month and the Average Reimbursement Per Transport is expected to exceed $6,500.
- The Days Sales Outstanding (DSO) was reduced to below 50 days. This was a substantial improvement over prior periods.
- The billing and reimbursement process was improved; however additional process changes are in progress.
- AMS program leadership transitioned several additional base sites to QMC for billing and reimbursement services. The projected annual impact is expected to be in excess of $2.5 Million for the bases that have been transitioned.
- QMC and program leadership are evaluating the transition of additional base sites in the near future.
The AMS program is moving toward financial viability with a combination of expense management strategies and enhanced revenue performance. The sponsoring hospital is evaluating additional opportunities for improvement recommended by QMC. There are currently no plans to close the AMS program.