Running head SUTTER HEALTH 1 The California Sutter Health Approach Name ACC281 Accounting Concepts for Health Care Professionals SUTTER HEALTH 2 The California Sutter Health Approach Sutter Health is a non for profit community based healthcare and hospital system based in Sacramento CA This system serves patients and their families in more than 100 Northern California cities and towns Sutter Health doctors hospitals and other health care service providers join resources and share expertise to advance health care quality and access The organization takes its name from California pioneer John Sutter whose namesake fort was one of Sacramento s original European settlements In response to the influenza epidemic of 1918 community leaders constructed the first Sutter Hospital in the vicinity of the fort replacing an old adobe house that had previously served as a makeshift hospital Sutter Medical Center Sacramento occupies this site today Other Sutter Health affiliated hospitals date back to the 1800 s and was some of Northern California s earliest health care providers In 1866 the predecessor of today s Sutter Medical Center of Santa Rosa opened its doors to residents of Sonoma County Today in the United States there are nearly 47 million Americans uninsured and 80 percent of that comes from working families The article by Souza and McCarty From Bottom to Top How One Provider Retooled its Collections covers how one of Northern California s largestproviders Sutter Health approached implementing a new strategy to increase collections In collecting payments from new patients services provided comes from the need to implement new strategies on how and when to collect the payments Sutter Health have made a successful new program to implement and define most problems within their A R department developed solutions to their problems and have recognized the need to ensure the program is continuously effective Souza McCarthy 2007 Sutter Health began committing itself to improving patient collections in 2006 SUTTER HEALTH 3 They began the task with their patient account representatives collectors and other members of the central business office of its Sacramento Sierra region They are in due course to working their way forward with the registration staff which will eventually be in charge of for many of the functions that the back end collections that team is responsible for Within the first three months of the project the company reduced the number of accounts receivable days for the nine hospitals in the region from 65 to 59 Each one of the A R days equals 13 million which in turn means that Sutter Health collected an additional 78 million Souza McCarty 2007 Before beginning the project Sutter Health identified several areas in which the project needed to focus There are three identified problems that would result in the staff of Sutter Health being unable to workefficiently First the patient financial services Staff or PFS could not access real time information on key financial and operational indicators such as A R days and cash collections To manage this problem they needed to be able to track progress or make important decisions managers and staff had to wait until the end of the month to do so Next issue that they acknowledged was the hospital s accounting system did not allow managers to isolate and analyze select data or generate reports on demand to the level of detail required Fixing this resulted in the region having to rely on specially trained programmers to develop the reports which would be costly and cause delays in identifying and correcting the problems The third problem identified was the central business office CBO staff also suffered from the lack of real time information The CBO was only able to enter accounts where they were assigned with an outstanding balance This made an issue to where the account representatives were unable to effectively prioritize or monitor their progress Souza McCarty 2007 Sutter Health began their journey for increasing collections and reducing A R days by focusing on empowering individual PFS staff members to assume responsibility for each SUTTER HEALTH 4 account they deal with allowing managers to have their own tools and receivables dashboards thus implementing a denials management component In order to insure each staff member was obtaining their individual and team goals each member was given their own business The tools in which the PFS were given provided them with the tools to prioritize and automate account work lists sort accounts in various ways and see at a glance their ranking with their work group and office wide Managers were given their own dashboard and tools which enabled them to use query for all aspects of receivables trending purposes and in identifying problem areas drill down to the patient account level monitor revenue payments adjustments receivables and days for periods from the previous day and week to the previous 18 months calculate average daily revenue by day and 30 day period assess their performance for the month to date and estimate likely results at the month end view all receivables or select any segment for quick analysis and generate timely reports on demand including aging analysis A R stratification discharged not final billed DNFB analysis credit balance analysis and analysis of problem payers Finally a denials management component was implemented in late summer which will allow registration staff to go online at the end of the year Souza McCarty 2007 When Sutter Health began the implementation of the program in to the front end staff it was an opportunity to have the claims denials reduced This process allowed individual registration to be analyzed by a rules engine identifying potential problems before the patient leaves the registration desk This process would check for problems such as when the patient type is not valid for hospital service such as Workers compensation or liability financial class lacks accident information Workers compensation is filed with an occurrence code other than 04 SUTTER HEALTH 5 The patient s guarantor is under 18 years old The patient s marital status is widowed but the relative is listed as husband wife or spouse The patient type is not valid for hospital service The patient is age 65 or older but the Medicare insurance plan is missing The patient had Medicare in any plan code but the Medicare secondary payer questionnaire is missing The health insurance claim number or