3 ways to boost revenue with data analytics

Financial management

In a mere decade, the physician practice revenue cycle has been transformed. Gone are the days when most patients had $10 or $20 co-payments and their insurance companies generally paid claims in full. Physicians can no longer order lab work and tests according to their preference without considering medical necessity. And as patients shoulder rising care costs, they have become payers themselves, and they’re not quite accustomed to this role.

All of these factors have led to an increasingly complex and challenging revenue cycle — one that requires innovation. “Doing more with less” may be a cliché, but it rings true for physician practices striving to thrive financially while providing the highest quality care; however with the myriad of new initiatives and demands vying for their time, revenue cycle managers and practice leadership may ask, “Is it even possible to do more with less?”

Surprisingly, the answer is “yes” for most practices. Fortunately, you can achieve this goal leveraging something you already have, or can obtain, within the four walls of your practice: knowledge.

Not many practices can afford to purchase technology strictly for analytics and business intelligence. Additionally, in an environment where challenges such as health reform and regulatory demands take substantial time and attention, practices don’t have the luxury of adding resources to tackle such efforts. Nonetheless, practices can jump-start their analytics efforts and fuel more informed decisions via their clearinghouse. By reviewing clearinghouse reports — both standard and custom — you can identify revenue cycle trends, spot problems and test solutions such as process improvements.

Here's how you can leverage data to achieve revenue cycle improvement goals such as decreasing days in accounts receivable (A/R), reducing denials and optimizing contract negotiations with payers.

1. Reduce denials and rejections
Effectively managing denials and rejections has always been one of physician practices’ greatest revenue cycle challenges. The more denials and rejections a practice has, the more likely key metrics such as days in A/R are to be low-performing, since practices aren’t able to get paid in a timely manner. Denials and rejections are just two of many areas that cause cash flow delays, and when reasons for denials and rejections are identified, such as eliminating unproductive work, practices can begin to improve days in A/R and increase profitability because payment comes in more quickly. These basic revenue cycle challenges, coupled with more stringent medical necessity requirements and value-based reimbursement, are now creating even more challenges in the healthcare industry.

Since ineligibility is often a leading cause for denials, a denial reduction strategy begins in the front office with quality eligibility information. An automated eligibility process provides front-office staff the data they need while also reducing errors. Allowing staff to check eligibility before patients are seen will set the stage for a more informed discussion regarding patient financial responsibility while also ensuring proper claims submission and reducing write-offs. Denial reports by reason are also an important tool; they can help practice managers identify staff or processes that require additional training.

A customized rejection report can help your team stay abreast of changing payer requirements and identify emerging patterns. Your clearinghouse should be able to generate a quarterly or monthly report that shows the most common reasons for claims rejections. Make sure the report details this information by practice location; staff at high-performing locations may be able to offer tips and advice to other offices with higher rejection rates.

Practice leadership can email the report and an analysis of patterns and trends to the entire team. An excellent tool to educate managers, coders and billing staff, this email can highlight areas for improvement or where additional training is required. This analysis should be simple and easy to comprehend, providing a quick snapshot of rejections along with practical ideas for improvements. The goal is for staff to be able to make adjustments to day-to-day work processes simply by reviewing the email. It can even generate some healthy competition as teams at different locations strive to make the greatest improvements.

2. Identify problematic procedures and services
In an era of value-based reimbursement, knowing which codes are prone to reimbursement issues can help your practice navigate an increasingly tricky landscape for claims payment. This information can be particularly helpful as you acclimate your practice to each payer’s value-based methodology such as bundled payments or shared savings. A report showing denials by code and per physician can generate awareness regarding potentially problematic claims submission. It can facilitate team education regarding coding conventions, medical necessity rules and payer requirements.

3. Improve contract negotiations
Clearinghouse reports aren’t just useful for education and improvements within your practice; they can also provide valuable insights as you review payer contracts and prepare for negotiations. In payer-specific reports, look for trends such as the average amount paid on specific codes over time. Compare these averages with your other payers, and go into negotiations armed with this data. 

A recent survey of College of Healthcare Information Management Executives (CHIME) indicates that data analytics is the top investment priority for senior executives at large health systems, trumping both Accountable Care and ICD-10. Their reason: quality improvement and cost reduction can best be achieved by evaluating organizational data.

Physician practices can obtain the necessary data to optimize revenue without making costly technology investments. Whether your practice has two physicians or 200, the black-and-white nature of claims data can be invaluable. It can help you evaluate revenue cycle performance, identify problems, drive process changes and ultimately improve cash flow, simply by coupling your newfound knowledge with analytical and problem-solving skills.