|
|
| Welcome to the latest edition of the Simione Solutions
E-Newsletter. This informational newsletter will be
e-mailed to you on a monthly basis containing articles
and information on up to date industry issues. |
 |
How Should Your Organization Measure Profitability?
By Rob Simione, Senior Consultant, Simione Consultants
A major goal in any business is to achieve and sustain profitability. But how does one track this? A useful profitability metric to incorporate into your quarterly business reporting is gross margin. Gross margin is calculated by subtracting your direct operating expenses from your direct operating revenue. In the case of home health agencies the direct operating expenses would include any salaries, benefits, transportation, contract and supplies involved with visiting services. Direct operating revenue would include any revenue generated from these services.
Although net margin shows the bottom line for a business, gross margin is a better representation of your organization's business operations. Indirect costs such as rent, utilities and taxes are items organizations have less control over, while your direct expenses are managed on a daily basis. Through evaluating gross margin an organization will be able to better manage its direct costs.
Gross Margin can also be a very useful metric when evaluated by each payer source. This allows an organization to compare which payers are most profitable.
Analyzing gross margins on an ongoing basis and comparing them to benchmarks will help your organization to better understand its operations as well as its performance.
Below are some of the National gross margin benchmarks for Q1 2010 per the Financial Monitor from Simione & OCS.
|
Overall Home Health |
52% | |
Medicare |
56% | |
Medicaid |
17% | |
Private Insurance |
19% |
To learn more, please email Rob Simione at robsimione@simione.com
To learn more about participating in the Financial Monitor click here
|
|
How Much Cash Does Your Agency Need?
By William Simione III, Principal, Simione Consultants
In today's hectic economic environment it is always important to make sure your business has enough cash on hand to sustain operations. Days cash on hand determines how many days your business would be able to continue operations without collecting any cash. This would be meeting payroll and paying off any day to day expenses (i.e. rent, utilities, etc). Days cash on hand is calculated by taking the total cash and dividing it by your total cash expenses (depreciation and bad debt should not be included). This amount is then multiplied by the amount of days these expenses cover. For example, the calculation for the Q4 period would cover 90 days. The current benchmark for days cash on hand is 20 days.
To learn more about the Financial Monitor, please email William Simione at wsimione3rd@simione.com
To learn more about participating in the Financial Monitor click here
|
|
 Important Cost Report Tip
by Maureen Laskowski, Director
Simione
Consultants
If
you are a hospice provider, set up separate general ledger accounts for the
recording of contracted general inpatient and inpatient respite costs. This will facilitate proper recording of
general and respite inpatient costs as mandated on the Medicare cost
report. A good measurement tool is to
then take those costs and divide by the number of corresponding days from your
statistical information and compare it to the contract rate you are
paying. This will determine if you are
properly recording costs for all the days of service provided by level of care. To learn more about our Cost Reporting Consulting Services, click hereTo View Our
Power
Point Presentation on The Home Health Cost Reporting, click here |
|
Will You Be Ready For The ICD-10 Changes?
By Suzanne Sblendorio, BSN, MA, Director, Simione Consultants
On
October 1, 2013, medical coding
in U.S. health care settings will change from ICD-9-CM to ICD-10. The
transition will require process and system changes throughout the health care
industry. Everyone who is covered by the Health Insurance Portability and
Accountability Act (HIPAA) must make the transition including physicians, providers, suppliers, and other covered
entities who submit claims to Medicare contractors for services provided to
Medicare beneficiaries in any health care setting. According to CMS the compliance dates are firm
and not subject to change. Failure to comply will result in unpaid claims.
The first ICD-10-related compliance date is January 1, 2012 when the standards for
electronic health transactions change from Version 4010/4010A1 to Version 5010.
Unlike Version 4010, Version 5010 accommodates the ICD-10 code structure. This
change occurs before the ICD-10 implementation date to allow adequate testing
and implementation time. The following records/transaction sets will be
affected:
- Claim/Encounter
(837-I, 837-P, 837-COB, 837-P COB, NCPD)
- Remittance
(835)
- Claim
Status Inquiry/Response (276/277)
- Eligibility
Inquiry/Response (270/271)
- Healthcare
Services Review (278) Pre-certification and Referrals
In the coming issues we
will explore these changes and the actions you should take to assure your
organization is not negatively affected.
If you would like more information about our IT Division Consulting Services, click here |
|
 Seven Simple Steps to Boost the Effectiveness of
Brochures & AdvertisementsBy Mike Ferris, Director, Simione Consultants
Home care and hospice agencies spend a fortune each year on
printed material. Brochures are printed that may be nice looking but are
not effective. A lot is spent on print advertisements including Yellow
Pages ads without maximizing effectiveness.
Once you have defined your target audience and the goals for
the campaign, here are seven tips to improve the pull of your printed materials
or advertisements: Sell Benefits not Features Use Photos and Graphics that Tell the Story Use Effective Headlines Keep it Clean Use Testimonials Use Simple Words and Simple Style Include a Call to Action
To learn more about Marketing, Sales
and Customer Service,
click here
To sign up for the Legendary Sales Leadership e-newsletter,
click here |
|
|
|
|
