Advanced Analytics: The Strategic Approach to Improving Your Practice’s Financial Performance
Until recently, the only way to measure physician practice performance was through month-end reports. While these reports are useful in identifying problematic trends, it often means corrective actions are only implemented sporadically throughout the year. And for some practices, running these reports serves merely as an item on a ‘to do’ list: Pull the report, send to stakeholders, and check the box ‘done.’
Another shortcoming of traditional month-end reports is that they provide limited useful, actionable data. Stagnant dashboards can display a variety of metrics, without offering real insight into reasons, associations, or process issues in the revenue cycle. This leaves few opportunities to make long-lasting, meaningful improvements.
Painting a Complete Picture: A Strategic Revenue Cycle Analytics Approach
Recent innovations in analytics technology give providers real-time access to practice data that is actionable. From there, providers can establish and track key performance indicators (KPIs), which in turn, can drive significant gains in efficiency, reduced costs, and optimized cashflow.
Following are six opportunities for employing KPIs to help drive practice profitability:
- Clearinghouses. Since a practice’s performance is, in many ways, heavily reliant on its vendors’ performance, it is essential to include clearinghouse KPIs. Clearinghouse performance in particular can have a significant impact on cash flow. Since claim submission is the first step in the reimbursement process, hiccups at this point can slow the entire revenue cycle. Metrics should cover claim submission trends between the practice and the clearinghouse, including Accepted, Duplicate, and Rejected. Providers should be able to drill down to the claim level to review reason codes. Velocity—or the speed at which claims are corrected and resubmitted—can also be useful in identifying issues with the editing process.
- Payers. KPIs help identify potential problems between the practice and its payers. KPIs should include the ‘top’ claim rejections and denials, displayed by payer, volume, and reason. These metrics can highlight trends around coding errors and indicate the need for staff training. They may also indicate problems in the patient access process, such as incorrect or missing eligibility information. Payer KPIs can capture dollar amounts associated with rejections and denials, which helps provide an accurate picture of revenue impact.
- Reimbursements. Remittance KPIs enable providers to assess and compare payor reimbursement and efficiency. Metrics can reveal changes in the percentage paid by each payer over a specific timeframe and indicate if the provider is being paid the expected amount. Providers can assess how quickly each payer reimburses and the percentage of reimbursement compared to claim amount, including underpayments and zero-paid. This information enables providers to address each payer individually and to look for specific improvement opportunities such as implementing EFT (electronic funds transfer) to facilitate faster reimbursement. Metrics such as reimbursable amounts are helpful as well, as they can be measured against the allowed contracted amount to determine if a practice is being under- or over-paid. The answer may indicate the need to review and renegotiate the payer’s contract.
- Patient Payments. With such a large percentage of revenue coming from patients, monitoring KPIs for patient payment trends is essential. Providers should monitor the patient financial responsibility in relation to total payments received over a period of time. These metrics can indicate a need to improve pre-service collections processes, such as educating staff on how to have a financial conversation with patients. It may also highlight the need to arrange payment plans for patients before the first bill is sent.
- Practice. Providers need the ability to monitor their practice’s performance at both a micro and a macro level. KPIs for each revenue cycle process can be combined to create a detailed scorecard that highlights how a practice is doing overall. Metrics should include length of time from service to claims submission, length of time from claim submission to payer reimbursement, and length of time from service to final payment from all payers (patients included). In this way, practice metrics are like puzzle pieces, each containing crucial information that informs the quality of the completed picture.
- Peers. While measuring a practice against its own historical performance is essential, being able to measure against other, similar practices gives a more accurate picture of that performance. Instead of telling providers how they are performing, peer-to-peer analytics better indicate how they should be performing. Providers benefit through better benchmarking capabilities and a greater understanding of their practice’s full potential. Peer-to-peer analytics can also help practices develop more strategic RCM goals.
Real-Time Analytics Mean Better Performance
Providers who depend on traditional month-end reports to measure performance may be missing out on opportunities to significantly improve practice profitability. True change requires a higher level of insight and real-time, actionable data continuously monitored throughout the entire revenue cycle. Measuring KPIs for clearinghouses, payers, reimbursements, patient payments, and peers should be part of every practice’s long-term improvement strategy.
Revenue Performance Advisor from Change Healthcare applies advanced analytics to the entire revenue cycle—from patient access to payment posting—giving providers actionable insight into opportunities for improvement. Our solution gives providers the tools they need to help streamline workflows and improve processes—all in a single, easy-to-use revenue cycle software solution. Providers can also benefit from increased efficiencies, faster reimbursement/enhanced cash flow, and fewer write-offs.