How can Analytics Help Solve Healthcare’s Biggest RCM Issues?
Revenue cycle management (RCM) is a critical part of any healthcare operation and with rising healthcare costs it’s even more difficult to manage. However, to better handle costs and overall revenue, healthcare organizations need to prioritize and develop an RCM strategy. The strategy itself needs to address various revenue pain points, including: cash collections, bad debt, denials, productivity and overall business strategy. We recently connected with Tom Schaal, director of product management at MedeAnalytics, to better understand what’s holding healthcare organizations back from addressing these pain points and what to look for in an analytics partner.
- The Need to Do More with Less – Margins are shrinking across the board and a lot is changing, especially with value-based reimbursement expected to represent 83 percent of provider revenue by 2020. Provider organizations are struggling to meet quality metrics, not to mention, the added reporting required under MACRA and MIPS. With physician burnout and overall healthcare costs at an all-time high, organizations are looking to cut back anywhere they can.
- Disparate Solutions – According to a recent survey, almost 69 percent of healthcare organizations are using more than one vendor solution for revenue cycle management. This means different numbers, screens, reports, siloed data and inefficiencies.
- Lack of Actionable Insights – Many solutions aim to consolidate data, but significant challenges still exist when it comes to sharing that data. Some providers are leveraging data visualization tools to bring information together, but issues arise when it comes time to draw actionable and timely insights from it and hinders organizations from understanding how to adjust their RCM operations.
How West Tennessee Healthcare Turned Bad Debt into Reclaimed Revenue
The healthcare reimbursement landscape is continuously changing, creating numerous challenges for healthcare organizations as they look to increase revenue. In fact, the revenue risk among not-for-profit and rural healthcare systems are even greater. The National Rural Hospital Association, estimated that 673 rural facilities were at risk of closure, out of over 2,000. West Tennessee Healthcare (West Tennessee), one of the largest, rural, public, not-for-profit healthcare systems in the U.S, acted proactively to combat this trend. In our recent case study, we examine how West Tennessee leveraged analytics to achieve financial success.
West Tennessee has four hospitals, two medical centers and offers 20 primary and specialty care centers. They service a population of 500,000 and with such a large rural patient base, needed guidance to address the following issues:
- 3:1 bad debt to charity ratio
- High percentage of accounts in arrears
- Long lead (30+ days) to denial and appeal process
EPM Series: Providers, Follow these Best Practices to Optimize your Revenue
With the healthcare industry continuing to shift away from fee-for-service, healthcare organizations still face the challenge of properly tracking all their efforts and ensuring they are being appropriately reimbursed. A recent Healthcare Informatics report noted that:
“Ongoing changes in both public and private payment are shifting the landscape around revenue cycle management these days, and U.S. physicians and hospitals are facing considerable impacts on their healthcare reimbursement.”
The report also notes, that healthcare organizations are conducting procedures that are “more complex,” and so are the payments. Now more than ever, organizations need to be laser focused on their billing processes and revenue cycle. The ability to access data is obviously a key factor for success but transforming that data into a strategic plan to tackle revenue remains difficult.
The challenges around creating plans can come from a lack of leadership accountability, insight into performance metrics, transparency and progress tracking. These factors all play a role in losing sight of tactical actions that drive results. Critical data gets lost in various outlets within the organization which creates a gap between setting goals and achieving them.
Enter, Enterprise Performance Management, which offers a “closed-loop” system that organizations can use to combine robust data analytics with real-time action planning and progress tracking. Enterprise Performance Management enables organizations to clearly define, track and execute on strategic and operational objectives by empowering employees to track their day-to-day activities with the big-picture strategic plan in mind. For revenue, there are three potential goals to keep in mind:
- Increase point-of-service collections - Verify eligibility, confirm demographics and fully understand patient portions after insurance, so your registrars can collect payment prior to service.
- Understand denial root causes - Denials come from all parts of the revenue lifecycle. By linking denial trends to their origins, you can resolve errors and oversights that lead to payer rejections and denial write-offs.
- Monitor audit risk and reduce take-backs - Improving your financial health isn’t about finding maximum revenue. It’s about finding accurate revenue. By proactively identifying compliance risk areas, you can avoid revenue take-backs and track the audit appeal process.
Looking Ahead: Analytics for Tomorrow’s Healthcare Economy
While there’s still a lot of uncertainty in the healthcare atmosphere, tracking towards value-based care (VBC) will remain an unchanged goal, according to Rick Pollack, president and CEO of the American Hospital Association who spoke at the 18th Annual Citi Not-for-Profit Health Care Investor Conference. Healthcare organizations that are cognizant of this journey to value are beginning to invest more in data analytics to help support them. In fact, by 2021 the healthcare analytics market is projected to reach $24.55 billion according to a Research and Markets report.
With the continued focus on value, it’s no surprise that at the recent HFMA ANI conference, many speakers on the agenda addressed just that, as well as highlighted the role data and analytics will play. In fact our very own customer, Wise Health System presented on their revenue cycle and compliance analytics partnership. Beyond the fruitful insights provided from the show, we’ve outlined three general themes that are resonating in the healthcare market:
- The steps to value – At HFMA ANI topics ranged from finding the path to value to simply growing your value. The topics – like providers’ readiness for the transition– vary widely. According to a HealthLeaders Survey, providers are still in the very early stages of the transition. If they haven’t begun the transition already, the time to start is now. The journey may seem arduous, but with the help of analytics tools, providers can understand where they stand in the process and how best to prepare for the steps ahead.
- Reimbursement under value – Providers will need to implement supporting payment programs. In a recent blog post, we outlined how providers feel unprepared for the implementation of programs like MACRA, citing time and complexity as the top concerns. Similarly, some providers may find themselves unaware of the other payment options available. For example, the often-forgotten MIPS-APM track helps physicians shift to VBC without taking on too much financial risk – but this track isn’t as well known, and thus not as frequently utilized. To succeed under value initiatives, providers ultimately need a good understanding of their clinical, financial and operational data. Revenue cycle data analytics helps providers understand these areas, all while minimizing their reimbursement risk.
- Approaching value holistically, not piece-meal – Take for example quality improvement programs. Hospitals implement these programs hoping to reduce their hospital readmission rates, and in turn save money. However, just implementing one quality program isn’t enough. A new study from the Journal of the American Medical Association shows that quality improvement programs don’t necessarily translate into big financial savings. Providers need to see the entire picture of their organization to pinpoint where revenue improvement opportunities lay. Implementing analytics can help organizations figure out if they’re on track to overall financial value, or not.
Regardless of the changes and the in-flux state of healthcare now, tracking towards value-based care will remain a constant initiative. Providers must have a holistic view of their enterprise to figure out where they can mitigate risk and optimize value. To learn more about the analytics tools that can support you in your transition to value-based care, visit our solutions page here. If you are interested in learning about additional ways to amplify your analytics journey check out our latest white paper here.
Putting a stop to revenue cycle leaks and tracking towards MACRA goals
Performance measurement under MACRA has started in 2017, but only one-third (33 percent) of hospital-affiliated physicians have reported feeling prepared for its implementation, according to a recent Black Book Research survey. With several payment pathways to choose from, providers and their physicians have an added layer of complexity around clinical documentation, which increases their reimbursement risk. Though many providers feel strapped for time as more of their attention needs to be spent on properly categorizing claims data, analytics can help those organizations have a better grasp of their revenue cycle, especially as it ties back to value-based care goals.
Our very own Tom Schaal, director of product management, recently spoke with Jeff Lagasse at Healthcare Finance News to discuss the common revenue cycle management (RCM) challenges and opportunities as they relate to preparing for MACRA. One such challenge is the lack of time to consider revenue cycle leaks. Schaal shares three key takeaways that can help healthcare organizations have a better grasp of their revenue cycle and measurement:
- RCM shouldn’t be a second job – However, many times it feels like it. Physicians want to focus on providing the best quality care to their patients. Focusing on the minutia of RCM draws their attention away from their primary job. Technology and data can turn the RCM job into a seamless task that can be incorporated into their everyday workflow.
- Revenue leakage can happen at any stage of the care continuum – From registration to insurance verification to billing. Data analytics can help you identify where the biggest opportunity for improvement lies. Are patient no-shows causing you to lose money? Data analytics spots these trends and help you course correct the problem (i.e. set up appointment reminders for patients).
- Physician quality is the biggest opportunity for RCM – As Schaal noted in his interview, “as we look toward patient satisfaction and payment structures around things like lack of readmissions, physician quality really becomes a focal point in terms of maximizing revenue.” Ultimately, physician quality measures are going to be a “cornerstone when it comes to any enterprise's [financial] health,” and data analytics helps physicians make meaningful decisions that will impact their bottom line and future.
As MACRA moves full steam ahead, providers will need to have a good understanding of their clinical, financial and operational data to succeed. Implementing revenue cycle data analytics helps providers track towards value-based goals, while minimizing their reimbursement risk.