Hcd wp-2012-better analysisofrevenuecycleandvbp
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This document discusses how an enterprise data warehouse (EDW) can help healthcare organizations improve their bottom line by better analyzing revenue cycle and value-based purchasing data. An EDW aggregates data from across departments and systems into a centralized location that provides easy access through dashboards. This allows financial teams to more efficiently analyze key metrics in real time and make informed decisions. The document provides examples of metrics available through an EDW and how it can help organizations increase reimbursements, manage denials, improve collections, and meet value-based purchasing criteria.
Hcd wp-2012-better analysisofrevenuecycleandvbp
- 1. Better Analysis of Healthcare Revenue Cycle and Value-based Purchasing Data Improves Bottom Line Written by Katy Smith Senior Business Analyst Health Care DataWorks
- 2. 2 Better Analysis of Healthcare Revenue Cycle and Value-based Purchasing Data Improves Bottom Line The demands on healthcare organizations – and particularly those individuals involved in the financial aspects of hospital systems – to improve quality while reducing costs have never been greater. These demands have increased exponentially due to internal organizational pressure to achieve optimum savings as well as external pressures resulting from healthcare reform, meaningful use and a host of other regulations. Time is of the essence for healthcare organizations and their financial teams. One needs to look no further than Value-based Purchasing, which will result in healthcare organizations being scored on a range of metrics, including patient satisfaction and quality of care. Failure to achieve scores within predetermined ranges will result in the withholding of millions of dollars in Medicare reimbursements, impacting the financial wherewithal of many organizations in immediate and possibly devastating ways. A further source of broad concern centers on the fact that many commercial health insurers tend to pattern their reimbursement models on those adopted by government programs such as Medicare. If that were to occur, insurers could soon be seeking to tie their payments to similar metrics, which would only compound the Value-based Purchasing challenge facing healthcare organizations. From a financial standpoint, the ability to access and analyze data related to revenue cycle performance, patient satisfaction, Value-based Purchasing and a host of other measures can put organizations in a stronger position to achieve savings, increase revenue and preserve Medicare reimbursements. The challenge for CFOs, financial analysts, revenue cycle directors, payer relations staff, and others responsible for managing the finances of healthcare organizations is how best to get their hands on the relevant information to make timely and actionable decisions. An Enterprise Data Warehouse is the answer Analysis of key information is critical to helping the financial team do its job. When the team has easy and timely access to relevant data across the organization, it can do a more efficient job of analyzing the information and helping the organization make more informed decisions. Too often, however, gaining access to this business intelligence is difficult because data is stored in organizational silos and disparate systems such as spreadsheets, hard copies, electronic files and
- 3. 3 An Enterprise Data Warehouse (EDW) is the ideal solution for organizing, aggregating and analyzing data. Essentially, it provides financial planners and analysts with the organization- wide information they need when they need it. The EDW sits atop a data model that can be implemented across every department. a host of other applications and databases. In order to analyze the data, financial experts find themselves struggling with the time-consuming process of collecting it and organizing it in a way that makes it possible for them to analyze it. At best, this process contributes to a lack of efficiency and delays in corrective actions and, at worst, a loss of revenue. But it does not have to be this way. An Enterprise Data Warehouse (EDW) is the ideal solution for organizing, aggregating and analyzing data. Essentially, it provides financial planners and analysts with the organization-wide information they need when they need it. The EDW sits atop a data model that can be implemented across every department. It does all the heavy lifting by aggregating data from the disparate departments and providing easy access to relevant information through user-friendly dashboards. Here are just a few examples of the data that is available in near real time through an EDW: • Denial write-offs • Copay volume • Transmitted claims volume • Self-pay collections • Total cash collections • Gross days in AR • Contractual adjustments • Rejections • Charges The EDW enables financial departments to get, at a glance, a broad view, and then to “drill down” into departments or key areas from a computer interface without having to dig through mountains of documents. The benefits an EDW provides include: • Increasing Medicare reimbursement by providing the tools to meet criteria, such as Value-based Purchasing requirements. • Assessing whether payers are taking longer to pay by charting how the breakdown of AR by age has changed over time.
- 4. 4 Five ways an EDW can make an immediate impact with revenue cycle 1. Improves patient eligibility determination at point of registration 2. Increases the clean claim submission rate 3. Enhances contract performance and denials management 4. Increases copay and self-pay collections 5. Maximizes Value-based Purchasing Five ways an EDW can make an immediate impact with revenue cycle An EDW helps organizations accurately manage the front and back ends of the revenue cycle process, from registration and patient access to charge entry, billing and follow up. Here are five ways an EDW makes an impact on the bottom line: 1) Improves patient eligibility determination at point of registration. Getting claims out the door quickly and accurately is critical to bringing in revenue in a timely manner. Key components of this process are determining patient eligibility and ensuring accurate registration. An estimated 70 percent of the information needed to submit an accurate claim and obtain timely payment is gathered at the point of registration. But dates of birth, proper plan information and other data is not always collected correctly or verified, leading to costly delays in reimbursements or payments down the road. The EDW platform developed by Health Care DataWorks incorporates a patient access measure that helps patient access managers track the accuracy of the information entered at registration and the frequency of eligibility verification being made by their staff. The result is a strong foundation for the claim. In addition, the EDW contains applications that enable financial departments to view potential problem areas so they can take corrective action sooner rather than later. For example, if a particular team in one hospital unit continues to have issues with patient eligibility verification or accurate registration, financial departments would immediately be able to identify the issue early on and initiate new training measures to ensure staff is inputting all the information needed for the claim.
- 5. 5 2) Increases the clean claim submission rate. The EDW tracks clean claim submission rates. This metric is critically important when you consider that it costs $25 on average to resubmit a claim. Those dollars add up quickly. The EDW provides a variety of options for analyzing and isolating clean claim submission rates, including by department and by payer, to give you both a clinical and a financial view of trends. When causes of clean claim denials can be identified, steps can be taken to rectify the problem without having to literally pull and review each claim. A clean claim denial is a controllable denial. If staff is trained properly in submitting clean claims and has the applications to identify clean claim denial trends in nearly real time, the resubmission rates will drop, leading to timely receipts of revenue and lowering overall resubmission costs. 3) Enhances contract performance and denials management. Healthcare organizations must be sure they are getting paid what they are owed under their insurer contracts. To do so, they need to ensure that payers are meeting their contractual obligations. Monitoring payer performance, including timeliness and accuracy of payment as well as active denials management, can lead to more timely payment and minimize payment errors that can lead to lost revenue. The reality is that errors in what organizations are paid – or are not paid – from insurers happen more often than realized. Many organizations seek to identify and correct such errors by conducting time-consuming and lengthy audits, and then resubmitting claims after the fact. It is not unusual for such audits to be conducted up to a year after the initial claim errors have occurred, resulting in auditors having to reconstruct and review mountains of claim information. It is much more efficient to address claim payment errors as soon as possible after they occur. An EDW provides a view of claims as they are submitted and paid, enabling organizations to identify payer payment errors to address them efficiently and quickly for correction. With the denials management application, staff can review denials by payer, by department or even by physician to determine the contributing factors, such as failure to secure pre-certification for procedures or medications. As a result, proactive corrective measures or training can be put into place to increase claims payments and reduce denials. 4) Increases copay and self-pay collections. Two forces are at work: Patient liability (copayments, coinsurance and deductibles) under many health plans are increasing, and the number of patients who are self-pay is rising at a high rate. This means more money is at risk of not being collected from patients. The EDW’s revenue cycle dashboard gives
- 6. 6 access to copay and self-pay information by department and even at point-of-entry registration. The copay collection rate can be tracked in near real time, as can the self-pay trends. It always is more difficult to collect copays and self-pay bills on the back end than upfront. This application can be used to identify where copays and self-payments are not being collected to their fullest potential, and empowers organizations to take steps to increase upfront payments through better training, new procedures and the like. For example, establishing or verifying alternative means of payment by self-pay patients and putting them in touch with a financial counselor at the initial point of entry has been a proven method of increasing collections in many hospital settings. 5) Maximizes Value-based Purchasing. Medicare reimbursements are a substantial portion of revenue for many hospitals. Under the Value-based Purchasing program that took effect in 2012, healthcare organizations stand to have a minimum of 1 percent of their Medicare payments withheld until they can demonstrate improvements with 20 pre-determined measures. These metrics focus on performance rather than reporting, and range from scores on quality of patient care to patient satisfaction rates. Health Care DataWorks offers a Value-based Purchasing application that enables organizations to be proactive, thereby putting them in a better position to recoup their full reimbursement and potentially receive even more as a reward for scoring higher in key metrics. Some of the features include: • A calculator to determine how much will be withheld and how much can be made back if performance rises. • “What if” scenario modeling to determine how much they will lose or gain if they perform better or worse in certain categories. For example, a 1 percent improvement in a metric could lead to $1 million in revenue. • Root cause analysis to identify and isolate problems or issues that are dragging down scores so the organization can take steps to improve a specific metric. The EDW by Health Care DataWorks is an organization-wide solution that can be implemented in stages with an initial focus on the financial side. The underlying data model provides financial teams with credible and reliable business intelligence to address the challenges and issues they face within their areas of responsibility. As a result, the bottom lines of hospital and healthcare organizations become the primary beneficiaries of the actionable and proactive decision making that comes from the analysis of this comprehensive data.
- 7. 7 About the Author Katy Smith is Senior Business Analyst at Health Care DataWorks, where she designs dashboards and reports for the Product Development Department. Her focus is on the financial aspects of health care. She provides consultation from a business perspective on revenue cycle processes in hospital systems. Katy is a former Payer Contract Manager at Nationwide Children’s Hospital, where she was the key point of contact for Patient Access and Patient Financial Services, served on the Revenue Cycle Enhancement team and was a business lead for implementation of its Enterprise Data Warehouse. About Health Care DataWorks Health Care DataWorks, Inc., a leading provider of business intelligence solutions, empowers healthcare organizations to improve their quality of care and reduce costs. Through its pioneering KnowledgeEdge™ product suite, including its enterprise data model, analytic dashboards, applications, and reports, Health Care DataWorks delivers an Enterprise Data Warehouse necessary for hospitals and health systems to effectively and efficiently gain deeper insights into their operations. For more information, visit www.hcdataworks.com.
- 8. 8 Contacting Health Care DataWorks Published: July 2012 ©2012 Health Care DataWorks, Inc. ALL RIGHTS RESERVED Phone 1-877-979-HCDW (4239) Email [email protected] Address 1801 Watermark Drive, Suite 250 Columbus, OH 43215 Web www.hcdataworks.com