What sets top revenue cycle performers apart from other providers is a keen understanding of their KPIs, benchmarking those against national norms, and establishing best practices and unique KPIs against the organization’s current policies, procedures, and identified gaps. Keeping these factors in mind, here are five key takeaways for preventing revenue leakage.
1. Obtain a robust analytics tool to recognize trends and areas of improvement
Gaining insight from your data with the right analytics tool does not necessarily require a substantial investment. At a minimum, an analytics tool should contain user-friendly dashboards, automatic reporting, and drill-down functionality. Any forward-looking healthcare organization can find actionable insights to positively affect their revenue cycle and prevent leakage. While healthcare delivery is infinitely complex, analytics can help make sense of specific coding and billing data. Net days in AR, Denial rate, & Denial write-offs are three of the foremost KPIs to consider as reported by top revenue cycle performers.
It is largely ineffective to appeal denied claims. Rather, having a keen understanding of these KPIs will allow the revenue cycle team a more comprehensive and systematic approach to identify areas needing improvement and drill down to the root causes of the problem and trends. Further, they enable the organization to readily address and rectify denials by pinpointing the underlying causes and while focusing on the areas with the greatest financial benefit.
But denials management is only one focus of an optimization tool. Another significant piece is the recognition of lost or missed revenue due to underpayments by the payer. This can lead to overstating net revenue, erroneous contractual adjustments, and large write-offs. It is safe to say that improving the efficiency of your revenue cycle begins with having visibility of your organization’s data.
2. Understand the financial impact of every component within the revenue cycle
KPIs should be summarized in a manner that clearly identifies where there are the most opportunities and positive financial impacts. Performing a “deep dive” on your existing data can reveal an understanding of payer expectations for various claims and service types, why the net revenue and cash flow for a specific payer is not at the expected level, and identify the departments and processes that need further attention. Specifically, for denial analytics, this will be reflected in the denial categories or CARC codes. CARC codes are a gateway to identifying and understanding trends, patterns, volume, and dollar value of denials. Top revenue cycle performers will categorize the reasons payers have not adjudicated a claim, thus identifying critical process failures, non-compliance with payer guidelines, and gaps in clinical care guidelines. A powerful analytics tool will have built-in work queues designed to assist in the prioritization of denied claims and will be able to trend positive adjustments and revenue impact over time.
3. Benchmark your KPIs against national norms and industry standards
When it comes to benchmarking, healthcare organizations need to be able to quickly identify where they are underperforming, what initiatives have a positive impact, determine where to focus improvement efforts, and prioritize their resources. Most organizations with top-line revenue cycle management teams will track the organization’s success against national norms and industry standards. However, it is also important to conduct internal benchmarking against your own unique and relevant KPIs that have been identified by a deep dive into the data sets. Applying AI to the process facilitates faster and more granular analyses of the data sets.
4. Know your contracted payer rate to make sure you are not being underpaid
Payer contract modeling is critical to ensure organizations are paid accurately for the care they provide. The contracts have varying terms, and reconciling the allowable amounts is a cumbersome and challenging task. Transparency of the data can provide information about the health plan coverage. Utilizing a vendor with payer contract modeling can save 2-3% points in net revenue. Thus, it is imperative that an organization focus its efforts on capturing all money owed as well as improving the facility’s internal procedures, as mentioned above. Introducing these metrics and KPIs, along with other processes associated with work queues and denial management, can ultimately lead to a substantial increase in collection recovery.
5. Choose a vendor who will facilitate a close partnership
When choosing a revenue cycle vendor, an organization should look for one who is willing to commit to attention, service, and, most of all, satisfaction for their customers who are struggling to understand how to leverage their data for business optimization. Additionally, your vendor of choice should have a robust analytics tool that can provide your organization with all the above, plus the potential to grow with your business. Take advantage of a vendor with consultative services to whom you can outsource the heavy lifting when necessary. Finally, each organization should look for a partner that is forward-thinking and includes artificial intelligence (AI) and machine learning on their future roadmap. This vendor will not only have the tools necessary to deliver meaningful insights but will also be a valuable resource in the creation of best practices.
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Guide by John Raley and Felice Felser:
John Raley has been working in the Healthcare Business Operations, Revenue Cycle Management, and Healthcare IT spaces for nearly 30 years. He has been the leader of RCM and business services for some of the largest healthcare providers in the United States, including Columbia Health System, CHRISTUS Health, and Kindred Healthcare. In recent years, John has shifted his focus to developing solutions with Prevalent Health and iMedX, which can improve revenue for all healthcare providers. He is currently the President of Revenue Cycle Management at iMedX.
Felice Felser has over 20 years of experience within Healthcare IT and as an Advanced Practice Provider. She has previously served as an organizational leader with a concentration on Revenue Cycle Management, Value-Based Care, Predictive Analytics, and Clinical Decision Support. Felice initially earned her Bachelor’s Degree at Johns Hopkins and a Master’s Degree in Nursing at Emory University. Subsequently, she obtained her MBA from the University of Phoenix and currently works for iMedX as their VP of Clinical Informatics.
