2023 Kodiak Healthcare Summit event summary

As in sports, success in business often means getting back to fundamentals, which for business can include planning, budgeting, and forecasting. Dan Bonner and Fred Lewis from Kodiak are designing a planning, budgeting, and forecasting module for Kodiak RCA, and they unveiled their creation at this 60-minute breakout session. The objective of the session was to elicit attendee feedback on the prototype, which one Kodiak client is using, and incorporate that feedback into the prototype before they build out the module for others. The prototype module collects historical data, normalizes it to set baseline data, and then regularly adjusts baseline data for changes in variables like rates, prices, service lines, case-mix index (CMI), and length of stay. They said they hope to have the module ready next year.

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A slide to remember

Insight

“Classic things like CMI and length of stay, we built that in, but we found that for net revenue, it’s really hard to predict the impact that a CMI change is going to have on net revenue or a length of stay change. I mean, those things definitely drive gross revenue, but to get to net, those are challenging.”

– Fred Lewis, Manager, Kodiak

Amber Schon, director of revenue recognition at Geisinger Health, was the featured industry guest at this hourlong breakout session moderated by Connor Barclay and Abby Susko from Kodiak. The group took session attendees on a deep dive into Kodiak RCA and explained how providers can use the Kodiak net revenue reporting platform to review and analyze change in prior (CIP), use CIP data to explain business operations and performance, integrate revenue cycle into net revenue activities, and compare CIP results to a provider’s balance sheet to help understand the financial health of the provider’s reserve model. They shared common scenarios in which a provider can incorporate its revenue cycle team into regular CIP reviews, including large balance account reviews, bill holds, and claims adjudication timing.

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A number to remember

$9 billion

Proposed lump-sum payment to eligible hospitals for 340B underpayments from calendar years 2018 through 2022.

Source: CMS

Insight

“Large balances have a way of masking smaller issues. If you start digging into a particular payor or a particular plan, maybe you’re seeing $20 denials all the time, and, as you dig in more, you’re seeing it seems to always be this particular procedure. So, you might work with your revenue cycle to give them those cases and that insight.”

– Amber Schon, Director of Revenue Recognition, Geisinger Health

Another day, another healthcare merger or acquisition. But unlike deals of the past, in which the parties to a transaction were limited to incumbent players such as hospitals and physician practices, the deals of today could involve virtually anyone from new market entrants of nontraditional companies to private equity firms. This session described the new landscape for finance, revenue cycle, and reimbursement leaders whose job it is to make the deals work financially. Sharing their insights were Adnan Qureshi from Kaufman, Hall & Associates; Rick Greene from Specialized Dental Partners; and Lynn Shapiro Snyder from Epstein Becker Green. Todd Spaanstra from Kodiak led the discussion about ways to minimize the risks of such deals while taking advantage of their opportunities to scale, integrate, and innovate.

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A number to remember

20

Number of hospital and health system transactions announced in the second quarter of 2023 compared with 13 transactions announced in the second quarter of 2022.

Source: Kaufman, Hall & Associates

Insight

“In the old days, the private equity firms were willing to come in and buy hospitals. They’re not willing to do that anymore to a great extent. They don’t want to be owners of direct government receivables. They lived through the whistleblower cases. However, they still are interested in rolling up more on the ancillary side than on the direct hospital services side.”

– Lynn Shapiro Snyder, Senior Healthcare Regulatory Lawyer, Epstein Becker Green

This highly attended stand-alone breakout session featured five Kodiak RCA specialists – Lucas Coleman, Brad Heaton, Michele Losekamp, Andrew Obaseki, and Bryan Rector – detailing the evolution of Kodiak RCA, Kodiak’s 19-year-old net revenue reporting software, into RCA Next, a cloud-based, more powerful, and more sophisticated version of Kodiak RCA. Coleman summarized the evolutionary changes from RCA to RCA Next: dispersed to centralized, unchangeable to editable, conventional to custom, and universal to unique. Rector said beta clients are running parallel on both RCA and RCA Next now and will jump to RCA Next in December. The commercial go-live of RCA Next is scheduled to start in the first quarter of 2024, with all existing RCA clients converting to RCA Next over a three- to four-year period.

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An image to remember

Kodiak RCA Next showcase

Insight

“Workflow automations can propel organizations to new heights of efficiency and success. Through workflows, Kodiak has redefined what efficiency and success means for our users.”

– Andrew Obaseki, Product Owner, Manager, Kodiak

Accurately reporting uncompensated care costs on Medicare cost reports is essential for hospitals that hope to receive their fair share of CMS’ annual uncompensated care reimbursement pool dollars. Tips and tricks on how to do that was the subject of this hourlong breakout session facilitated by Jill Fusco and Nick West from Kodiak. Why is accurate reporting so challenging? One reason is all the new reporting requirements from CMS. Topping that list is CMS’ Transmittal 18, which added uncompensated care reporting requirements to Worksheet S-10. The requirements include Exhibit 3B on charity care write-offs and Exhibit 3C on bad debt write-offs. Fusco and West got granular and gave column-by-column, row-by-row instructions on what to enter in each box on Worksheet S-10 and the two new exhibits.

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A number to remember

53%

Percentage of session attendees who said it’s too early to tell if submitting Exhibit 3B (charity care) and Exhibit 3C (bad debt) will be a positive change in reporting uncompensated care costs on Medicare cost reports.

Source: Kodiak

Insight

“There it is. Exhibit 3B. Not to be confused with Exhibit 3C. B would be great for ‘bad debt.’ And C would be great for ‘charity care.’ But here we are, right?”

– Nick West, Senior Manager, Kodiak

The stand-alone breakout session “The Future Unveiled: Kodiak RCA Next Showcase” served as the setup for four follow-up breakout sessions on Kodiak RCA Next on specific topics and capabilities. This first follow-up session, led by Brad Heaton and Michele Losekamp from Kodiak, focused on how Kodiak RCA Next will help users complete their month-end closes more efficiently without losing any accuracy – or losing any newly created standing reports. Heaton and Losekamp described a powerful new feature in Kodiak RCA Next that allows users to apply “test scenarios” to see how month-end close results could, would, and should change under various scenarios such as an unexpected jump in Medicare bad debt expenses. Users can apply whatever test scenario they choose without losing their original report.

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A slide to remember

Insight

“Test scenarios are a brand-new concept. The test scenarios are unlimited.”

– Michele Losekamp, Manager, Kodiak

Tracey Coyne and Eric Proctor from Kodiak led this small-group discussion on how hospitals and health systems track, analyze, and report net revenue from direct contracts with employers and value-based reimbursement contracts with payors. The answer is what Coyne described as a “patchwork quilt” of manual processes that largely exist outside of the Kodiak RCA net revenue platform or whatever patient accounting systems and billing systems hospitals and health systems are using. As a result, it’s challenging to integrate that revenue into any database for analysis and reporting purposes. The revenue is accounted for on a cash basis rather than on an accrual basis. Kodiak’s goal is to build a module in Kodiak RCA for direct contracting and value-based payment revenue, according to Coyne and Proctor.

There is no on-demand rebroadcast of this breakout session.

A number to remember

8%

Percentage more that self-insured employer plans paid providers for endoscopies than did fully insured employer plans, according to a study comparing prices for common medical procedures in self-insured plans with prices in fully insured plans

Source: Health Affairs

Insight

“We have data. We have all of our clients’ data coming in through RCA. Now this population could be carved out in client receivables. But we see that, too, we could just connect it into the platform because it is all coming in. And that’s what we see as the opportunity – getting the data out of the spreadsheets and into one platform from which decisions can be made.”

– Tracey Coyne, Partner, Kodiak

Nick West from Kodiak and co-presenter Amy Duncan, president of Summit sponsor Collaborative Data, led attendees on a deep dive into Medicare bad debt reporting requirements and CMS audits of providers’ Medicare bad debt expenses. Duncan said providers must do detailed asset and income tests on patients before providers can classify them as charity and report their expenses as charity. “Don’t leave it up to your financial counselors to decide whether a patient has enough in their checking account,” she said. Duncan also took attendees on a tour of Exhibit 2A, which is a new Medicare cost report form providers use to report their bad debt cases and expenses. She said attendees should expect more detailed bad debt audits because of the additional data captured on Exhibit 2A.

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A number to remember

78%

Percentage of session attendees who said they either think so but haven’t checked or have no idea whether their organizations are reviewing collection agency data to confirm that their agencies are treating non-Medicare and Medicare accounts similarly.

Source: Kodiak

Insight

“Another thing that was codified as part of the 2021 IPPS [inpatient prospective payment system] regs was a concentration on treating Medicare and non-Medicare the same. This is one that surprised me. It’s just not enough to confirm what your collection agencies are telling you. You really do need to dig into the data. Are all your accounts at a primary agency six months and a secondary agency six months? Do all the Medicare patients go there? Is everybody returned the same? Are they returned or are they activated? There’s kind of these nuances, and I think it just starts with what are the collection policies with your agencies and is there any differentiation between the payors or how the accounts are treated?”

– Amy Duncan, President, Collaborative Data

The stand-alone breakout session “The Future Unveiled: Kodiak RCA Next Showcase” served as the setup for four follow-up breakout sessions on Kodiak RCA Next on specific topics and capabilities. This second follow-up session, led by Andrew Obaseki and Lucas Coleman from Kodiak, showed how users can take advantage of new functionalities in Kodiak RCA Next to create, amend, and share custom reports that fit their organization’s financial needs. They said custom reporting and dashboards within Kodiak RCA Next give users the ability to unlock insights from their data that might not have been visible in standard reports and dashboards. Custom reports and dashboards come in two scenarios: production (actual results) and test (results adjusted for “what-if” variations in actual results).

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A slide to remember

Insight

“With custom report building and dashboarding, we’re looking to unlock insights. This is really giving our users the ability to get those insights, make decisions, and present data in a way that enables users to tell a story to their stakeholders.”

– Andrew Obaseki, Product Owner, Manager, Kodiak

Mendy-Sue Drew, assistant vice president of accounting operations at Scripps Health, was the special guest presenter at this breakout session led by Tracey Coyne, Ryan Herr, and Eric Proctor from Kodiak. During this deep dive into unapplied cash, a topic only an accountant could love, Drew provided the color commentary to the running play-by-play from Coyne, Herr, and Proctor. They covered such topics as creating a general ledger reporting steering committee, assessing gaps in current reconciliation and reporting processes, creating a standardized chart of accounts, optimizing an organization’s banking structure, and identifying the important role that technology and automation can play in daily reporting and reconciliation. After working on the issue for more than 10 years, Drew said Scripps Health’s cash reconciliation match rate has reached 98%.

There is no on-demand rebroadcast of this breakout session.

A slide to remember

Insight

“I can’t say enough how important it is to have IT’s commitment to what we do.”

– Mendy-Sue Drew, Assistant Vice President of Accounting Operations, Scripps Health

Susan Searcy, executive director, revenue integrity, at UnityPoint Health, joined Megan Beasley and Megan Galvan from Kodiak in this hourlong breakout on one of the hospital industry’s historical and long-running clinical, financial, and operational performance measures: patient length of stay (LOS). Lost among more sophisticated and granular performance measures, LOS is making a big comeback as research – and now data generated through Kodiak RCA – connects unnecessarily long LOS to negative clinical, financial, and operational outcomes. The list of poor financial outcomes includes increased cost per discharge, likely due to inefficiencies; slower bed turnover, which leads to lost revenue opportunities; and lower profit margins per patient as unnecessary stay costs eat up fixed revenue from diagnosis-related group payments or other fixed payments per episode of care or diagnosis.

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A number to remember

46%

Percentage of session attendees who said their organizations have structures in place to monitor the financial impact of length of stay across their operations

Source: Kodiak

Insight

“Sometimes length of stay initiatives get a bad rap from our clinical folks. They hear there’s a length of stay initiative, and they automatically think it’s the finance folks, and all they’re worried about is money. But what about the other patient? I have this patient up on three south, and they’re there, and I have five patients in the ED that are acutely ill, meet inpatient criteria, who are sitting in a bed in the ED and who deserve to have care on that floor.”

– Susan Searcy, Executive Director, Revenue Integrity, UnityPoint Health

There’s theory. And then there’s practice. The value of this 60-minute breakout session came from the firsthand experiences of healthcare finance leaders who are using Kodiak RCA to monitor, analyze, and report their net revenue results. Moderated by Brett Butts and Peter O’Neill from Kodiak, the three leaders who shared their Kodiak RCA thoughts were Ben Hayhurst, reimbursement manager at WellSpan Health, and Gary Simkus, vice president, analytics and systems, and Michael Tokash, revenue analysis manager, both with Universal Health Services. One of the biggest benefits of using Kodiak RCA, according to the leaders, is that it creates a single source of truth for net revenue that can be shared by the finance team and the revenue cycle team, facilitating a cooperative relationship between the two.

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A number to remember

66%

The percentage of session attendees who said their organizations have well-established policies and procedures surrounding the net revenue function

Source: Kodiak

Insight

“When we implemented RCA back in 2018, the president of my organization said, ‘Hey, I really need some insight on Kodiak RCA. Print me off every single report.’ So, I did. I printed off every single canned report, got a binder, went to OfficeMax, grabbed one of those magnifying sheets so he could take it on the plane. He marked it up, gave it back to me. He’s like, ‘It’s not really telling me anything I need to know.’ I’m like, ‘I know I struck out.’ Let me go back to the table and redesign and put structure around how we explain net revenue.”

– Gary Simkus, Vice President, Analytics and Systems, Universal Health Services

No one likes finding mistakes. The only thing worse is not finding them and leaving them to repeat themselves. That’s the justification for Kodiak Financial Control Analytics, a new audit tool that monitors transaction data in four key areas: trial balance/general ledger, payroll, accounts payable, and supply chain. Sarah Cole and Andrew Perez from Kodiak walked breakout attendees through the functionality of the Kodiak Financial Control Analytics software platform and how internal audit teams at hospitals and health systems can use the platform to improve the accuracy of financial information and to evaluate the performance of their existing financial controls in those four areas. For example, the software can detect and correct general ledger accounts with “unnatural account balances” like liability accounts with debit balances.

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A number to remember

64%

The percentage of early payment discounts that the average hospital fails to collect, according to a Kodiak analysis of hospital accounts payable data

Source: Kodiak

Insight

“Financial Control Analytics is a tool to help you close that gap and help you move from an average organization to a leading-practice organization. Specifically, we’re looking at helping organizations close their books in a way that is more accurate and more complete.”

– Andrew Perez, Manager, Kodiak

The pace of physician practice acquisitions by hospitals, health systems, and private equity firms shows no sign of slowing down as they continue to build, scale, and consolidate their provider networks. What hasn’t kept pace, however, is the ability of the acquirers to monitor and track the performance of their physician practice assets. That’s where Kodiak RCA for physicians comes in. During this breakout session, presenters Tom Alwine and Eric Busch from Kodiak detailed the data elements required by Kodiak RCA for physicians, described reports available to users in the physician module, and outlined functionality for facility structure and reporting for different types of affiliated physician practices. To wit, Kodiak RCA for physicians can generate net revenue and productivity reports by practice, specialty, or department.

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A number to remember

58%

Percentage of session attendees who said their organizations are using or plan on using Kodiak RCA for physicians

Source: Kodiak

Insight

“Every physician has a different net revenue as a percentage of gross rate. So even though we’re calculating at a group specialty – medical, surgical, radiology, anesthesia – it’s getting down to that insurance plan level.”

– Tom Alwine, Manager, Kodiak

Susan Fisher, senior financial analyst at PeaceHealth, and Jennie Rhoads, revenue recognition manager at Geisinger Health, were the featured guest presenters at this breakout led by Ryan Herr and Abby Susko from Kodiak. As in other breakout sessions featuring guest presenters, both Fisher and Rhoads provided real-world client insights on a host of topics raised by Herr and Susko. Those topics included managing large-balance accounts, performing recast analyses, implementing a process for determining pricing and realization changes, reviewing change in priors, and improving the month-end close process. Fisher and Rhoads also shared their adventures in net revenue reporting as their respective health systems scaled through mergers and acquisitions. Breaking legacy bad habits and getting people on the same net revenue reporting page is a daily challenge.

There is no on-demand rebroadcast of this breakout session.

A slide to remember

Insight

“When you get everyone on Kodiak RCA, you have one source. You can tell the story much easier.”

– Jennie Rhoads, Manager, Revenue Recognition, Geisinger Health

In this third follow-up breakout session building on the stand-alone “The Future Unveiled: Kodiak RCA Next Showcase” session, presenters Derek Ellis, Jenna Haworth, Brad Heaton, and Jenna Kleinrichert from Kodiak took the temperature of attendees on their level of preparedness for making the leap from Kodiak RCA to Kodiak RCA Next. They also reviewed the details of the five-phase process for making that conversion, and they discussed the functionality of the next iteration of Kodiak’s net revenue reporting platform. The switchover starts with a comprehensive conversion readiness assessment, performed by Kodiak, that covers four major areas: current data feeds (population of existing data elements, etc.), user activity (activity levels in RCA modules, etc.), environment setup changes, and other factors like the size and complexity of an organization.

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A number to remember

67%

Percentage of current Kodiak RCA clients that are actively preparing for their migration over to Kodiak RCA Next

Source: Kodiak

Insight

“You’ve probably heard by now about some of the specifications and the increased functionality we have in RCA Next. It uses a more robust data set than the legacy application. That enhanced file specification, that enhanced data set is what we are looking to create in that daily file conversion phase. I would say the big bulk of this time is really spent there. As we convert all of those files to the new specifications, there are some additional files as well that did not exist in legacy.”

– Jenna Haworth, Senior Manager, Kodiak

Alex Boone, Ryan Hartman, and Chad Oakley from Kodiak walked attendees through the functionality, capabilities, and benefits of using Kodiak Account Resolution AI to automate the resolution of unclaimed property and small-balance patient accounts, both credits and debits. The types of unclaimed property that hospitals must report to their respective states and return to their owners include patient credit balances, gift cards, and third-party-issued checks. The trio identified the barriers that prevent the quick resolution of credit and debit balances in patient accounts and solutions to those barriers. The solutions include using machine learning technology like Kodiak Account Resolution AI to identify patterns in credit and debit balances like duplicate payments and patient payments after adjustments and resolve those like issues the same way.

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A slide to remember

Insight

“As a general rule, it’s good to assume that anything that’s due to someone else, even if it’s a dollar, should be escheated to the state. It makes for maybe a not-so-easy operational process. I understand there’s a lot of effort in identifying a $1 overpayment, much less cutting a check or contacting the owner to get that back to them. So, the states do accommodate that a little bit with what they call a due diligence threshold and an aggregate threshold.”

– Ryan Hartman, Senior Manager, Kodiak

One of the hallmarks of how Kodiak develops new solutions for healthcare finance leaders is its desire to work openly and collaboratively with its clients to build out existing solutions or create new ones to help those leaders do their jobs better. In one of the final concurrent breakout sessions at Healthcare Summit, that desire was on full display through presenters Tom Alwine and Brett Butts from Kodiak. The duo solicited ideas from the attendees on how to improve the net revenue capabilities of Kodiak RCA with new and better reporting metrics. They asked attendees about what data visualization tools they’re using, what standing reports they’d like to customize, and what types of customization they’d like to pursue, including trended reporting, customized calculations, and automated insights.

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Insight

“In the future there will be opportunities for us to track cash versus net revenue and change in price. Basically, tag performance of each of those at the account level.”

– Brett Butts, Senior Manager, Kodiak

This fourth and final follow-up breakout session to the stand-alone Kodiak RCA Next showcase session was an open forum that gave attendees an opportunity to query Kodiak net revenue specialists on the new features and capabilities in Kodiak RCA Next, the cloud-based version of Kodiak RCA. The panelists were Derek Ellis, Brad Heaton, and Bryan Rector. Attendee questions included training opportunities for Kodiak RCA Next, changes in month-end close functionality, the future of the Blue Cross module, change in prior reporting, themes and theme definitions in Kodiak RCA Next, and zero balance accounts by payor. The panel answered these questions and encouraged in-person and virtual attendees to send in additional questions.

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A slide to remember

Insight

“Change in prior to me is tricky. I’m curious about your thoughts because so many folks use it differently. I hear some folks that are like, ‘We live by that,’ and others are like, ‘We don’t touch it.’ But I’ve also heard that some went from, ‘We don’t want to talk about it,’ to, ‘That’s all we talk about now.’ I think as folks within organizations start to understand it a little bit better, it starts to add more value.”

– Bryan Rector, Partner, Kodiak