Revenue leakage is a very real concern for Healthcare providers costing hospitals and physician organizations billions of dollars each year in squandered net patient revenues! Left unchecked, your profit margins suffer a slow ‘death by a thousand paper cuts’ as your organization incurs the cost of patient care delivered without the offsetting reimbursement.
In today’s highly competitive yet uncertain healthcare landscape, margin compression is a threat to financial sustainability. And yet, providers are letting their hard-earned revenue slip through the cracks of their revenue funnel at alarming rates. Detecting and patching those leaks can provide immediate financial relief and lead to long-term process improvements. Here then are the five things every provider organization should start doing – as well as the five things they should stop doing – to optimize revenue and avert leakage.
Five things to STOP Doing:
To carve out the bandwidth needed to attack leakage, it’s just as important to define the things you’re going to stop doing to afford your Revenue team the time to tackle the items you want them to start doing. Practicing the ‘discipline of removal’ reduces the amount of time people waste, and in effect, refocuses their efforts and energy on achieving revenue results.
- Stop ignoring the elephant in your Revenue Cycle Room
Optimizing revenue is a two-fold solution. You need to mitigate the “friction” in your revenue cycle operations to optimize efficiency and you need to restore volume to your revenue funnel by addressing leakage. To truly manage leakage, you need information and assigned accountability. Don’t assume you have either.
- Stop assuming your EMR is the silver bullet for Revenue Management
EMRs are the source-of-truth but not the tool-of-choice for managing revenue. Like all enterprise systems, EMRs are too unwieldy to provide end-users or Revenue Cycle leaders ready access to granular, actionable leakage analytics and EMR IT resource constraints are a bottleneck for custom reporting. As such, provider organizations must look to niche vendor solutions that can play off the EMR data to provide value-add analytics without taxing your already limited IT resources.
- Stop thinking you can fix leakage by overemphasizing your CDM
CDM management and charge auditing are separate, interrelated work streams; not interdependencies! If you ran a retail store where you had 3% inventory shrinkage, you wouldn’t assume you could solve for wastage or theft via a price adjustment. Even if you chose to raise your prices 3% to offset leakage (something not easily done in healthcare), you’d only be masking the underlying problems. Stop treating mid-revenue cycle leakage as though it is a book-keeping issue, it’s a multi-faceted operational process problem.
- Stop thinking you have the scale to ‘do it yourself’
You don’t hire full-time nurses to accommodate peak census levels and you don’t set your floor stock supply inventory levels for maximum demand either so why would you add staff to your revenue integrity department to go after the small percentage of patient charges leaching out of your system? Outsourcing Revenue Assurance activities to an experienced partner with the requisite core competencies, cloud-based technologies and the ability to focus on a singular objective with greater economies of scale is the only cost-justifiable way to treat leakage.
- Stop looking at leakage auditing as purely a pre-bill function
HFMA’s Patient Friendly Billing guidelines call for providers to deliver clear, concise and correct billing information yet we rush to get out initial statements with 10 – 13% error rates by cramming an overwhelming amount of frenetic activity for revenue teams into the first 3-5 days post discharge. Best practices call for identifying revenue leakage both pre- and post-bill to optimize charge capture. Putting all your charge auditing eggs in one pre-bill basket at a time when you know your team is distracted and under pressure exposes you to significant financial risk.
Five thinks to START Doing:
Once you’ve freed your organizational mindset from these outdated ideologies, it’s time to champion the cause for revenue integrity!
- Start getting serious by attacking the problem
HFMA estimates 3 – 5% of charges never get posted which means the industry’s revenue defect rate is 10,000 times greater than a Six Sigma level of performance! Active vs. passive leakage management is a worthy investment with a seven-figure net income impact and double-digit returns on your investment. Don’t be passive, get focused by assigning a business owner, establishing goals and monitoring progress. Leakage won’t solve itself; it requires leadership, structure and proper tooling to make it happen.
- Start aligning your Physician and Hospital Billing functions
Your corporate strategy is to align your hospitals and physicians, you’ve spent untold sums of money to have a community EMR, and you’re consolidating your business office but yet you still operate your physician billing and hospital billing teams as independent and separate functions even though they’re addressing the same episode of patient care. Now is the time to remove the Chinese wall and break down these silos by sharing billing information. A Revenue Assurance Program that cross-pollinates PB and HB information presents an innovative opportunity for revenue enhancement across your enterprise.
- Start taking the emotion (and defensiveness) out of the equation
Tracing the root causes of revenue leakage should not be a rascal hunt. More often, leakage results from systemic process problems, obsolete business policies and/or technology gaps than human error. Treat the management of revenue leakage as a data-driven/fact-based opportunity to learn and develop your staff. Consider gamification strategies to encourage proactive employee engagement.
- Start approaching revenue assurance activities as an investment, not a cost
Recouping incremental revenue for the patient care you’ve already delivered converts directly into net income. In fact, accretive revenue is more valuable than an equal % of variable expense reduction and can stave off the need for emergent spending cutbacks. The operating margins on a Revenue Assurance Program are considerably higher and more predictable (shorter time-to-value, too) than front- and back-end revenue cycle management initiatives so it’s a smart and safe investment.
- Start looking for a partner vs a vendor
Charge capture auditing tools (i.e., technology solutions) alone can create mayhem for coding teams. In isolation, automated predictions are prone to generating 50% or more “false positives” that erode the confidence and productivity of coders, who, in effect, are tasked to find needles in the haystack. A value-add outsourced service that cleanses the predictions before they’re presented to your revenue team transforms the technology tool into a true solution. If your charge capture vendor is heaping more complexity than value on your haystacks, offering only theoretic predictions vs. reconciling actual revenue recovery to the penny, and is charging you a flat subscription fee that has diminishing returns as you solve your leakage problems, it’s time to reassess the financial and productivity impact of that relationship and evaluate other options.
AcuStream is a Revenue Assurance specialty company dedicated to the healthcare industry. AcuStream provides automated charge capture auditing technology solutions, value-add professional coding expertise, and decision support tools to the country’s leading healthcare providers enabling our clients to find missed revenue around charges they didn’t know were missing. We are the only organization with proprietary algorithms and custom client specific rules, that can correlate both the hospital data and physician data. This in conjunction with our world class workflow, allows us to find and track missed, miscoded, and misplaced charges.
AcuStream identifies and quantifies missed reimbursable charges for both Physician Organizations and Health Systems. REVBUILDER™’s automated post-bill auditing solution identifies omitted charges while REVREVIEW™ auditors validate charges against your own EMR documentation and payer contracts to ensure you get paid for the services provided.
AcuStream has been privileged to work with one-third of the academic medical centers on the U.S. News and World Report “Honor Roll of Best Hospitals,” seven of the 50 largest integrated health systems, twenty percent of the 20 largest not-for-profit health systems, and 10 of the nation’s largest physician group practices providing immediate financial lift/profitability, management insights and process improvements surrounding Revenue Management.Acustream currently processes over 100,000 doctor’s data on a monthly basis, thanks to our client base of top hospitals and physician organizations in the US. The result of our solution is improved net profit, decreased revenue erosion, and a clear view into departmental efficiencies.
We help you identify the missing pieces to your revenue puzzle, BEFORE you even start to put the puzzle together.