Keep More Business with Comparative Data
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Show Value to Your Clients and Prospects
As changes in the healthcare landscape drive health-care providers to outsource their revenue cycle management functions, establishing and maintaining a strong relationship with your clients is more important than ever. In response to healthcare reforms, including the shift toward value-based payment systems and the ICD-10 conversion, providers are looking to revenue cycle management (RCM) companies to not only improve their business processes, but do so while also realizing positive return on investment. RCM vendors who don't meet this challenge are at risk of losing clients, as healthcare executives look to cut costs to keep pace with this rapid transition, according to healthcare executives surveyed as part of the Healthcare Revenue Cycle Management Report by peer60.
Replacing lost clients costs money. It is more expensive to go after new business than to prove your value to your current clients. The best way to prove your value is to understand your clients' pain points and help resolve them. Providers are increasingly relying on revenue cycle analytics to create key benchmarks and trends in business cycles to identify problem areas that are impacting profitability. RCM companies that can aggregate and use this data to help clients address these problem areas will make themselves invaluable partners.
Comparative analytics solutions give RCM companies and providers the data they need to improve revenue cycle processes. In the past, data limitations have prevented many RCM companies from simply analyzing clients' revenue cycle performance in one location. Leveraging technology to aggregate data allows you to compare your clients' current and historical data with national and state benchmarks based on industry ERA data, creating a 360-degree view in areas such as code utilizations, claim denial rates, and more. Comparative data also provides insights to help resolve issues today, helping providers minimize risk during the switch to ICD-10 while establishing ICD-10 baselines and resolution plans.
As you embark on a new client relationship, it is important to ensure that your clients and your prospects have benchmarked themselves using internal and external data. This will provide a foundation from which to compare and evaluate their business functions before and after outsourcing, and will provide you with the opportunity to showcase how your services have improved their revenue cycle performance with data.
Comparative Data Enables Benchmarking to
Improve Business Performance
Comparative data enables RCM companies to benchmark key metrics and compare the performance of themselves and their clients against peers – by specialty and geography. Benchmarking provides a snapshot of the business performance and shows where providers compare in relation to a particular standard.
For example: if accounts receivable averages more than 50 days, benchmarking can provide a comparison to reveal where a provider compares to peers to determine whether this is a normal range or if there are internal issues impacting a specific provider's ability to get paid in a timely manner.
Revenue-related trends and statistics – whether reimbursement, claim rejections and denials, collections, or payor trends – can reveal the financial health of a provider's practice and help determine processes and action items to improve operations.
Here's a look at denial rates and a step-by-step guide for evaluating a client's data:
Step 1: Identify claims that are taking longer to be paid due to an increase in denials.
Step 2: Compare the denial rate year over year.
Step 3: Trend denials by reason code and specialty compared to state and national averages.
If a trend is client specific, review the data to determine the root cause. For example, if top denials are all related to eligibility, providers can work with their staff to determine what part of the process is breaking down. Confirm employees are checking eligibility during patient registration or prior to. Depending on your process, your practice might benefit from purchasing a tool to assist in automated eligibility checks.
Step 4: Evaluate high-volume or high-dollar procedures, evaluating key areas such as length of time to process a claim, whether that time is increasing, and how it compares to state and national averages.
After evaluating the data, if you find delays in getting claims posted in the PM system, look at other business processes to determine reasons for the delays. Perhaps physicians are not entering the data in an EMR. Or, perhaps there is a connectivity issue between a practice's EMR and PM, creating issues with charges not flowing over as expected.
Step 5: Check the average time it takes for your payors to process your claims.
If the average time is increasing, review your data against state and national averages to determine if this is a client-specific issue or if their peers are experiencing the same issue. A customized claim edits system may be able to flag issues prior to reaching the payor, helping your clients prevent rejected claims.
Step 6: Prioritize your issues based on the greatest ROI and review workflow to ensure best practices are implemented and followed. Issues should be addressed and resolved in a timely manner in order to optimize your clients' business.
Case Study: Oncology Practice Reduces Denial Rates through Comparative Analytics
Through the use of comparative data, a six-provider oncology practice realized significant benefits, including a reduction in denial rates, improvement in cash flow, and a reduction in staff processing time.
The practice was experiencing an 8 percent denial rate and wanted to determine why denials were so high.
Many practices experienced increased anxiety with the looming ICD-10 implementation; there was a sense of urgency in reducing denial rates as providers anticipated the CMS-estimated 100 percent increase in denial rates as providers transitioned to ICD-10.
The practice first compared its year-over-year denial rate, and then compared that data to state and national averages. They also evaluated their high-dollar and high-volume procedures and the average time it took payors to process their claims. The data revealed that the practice had several areas they could improve.
By putting comparative analytics to work as part of its revenue cycle process, the practice realized a financial gain of 3 percent (of their overall allowed amount) and collected income of $365,000 – an amount that otherwise would have been delayed or never collected. Implementing comparative analytics into their revenue cycle process also reduced soft costs associated with staff not having to spend time filing appeals. These providers also saw a reduction in their staff processing time (in this case, time between the date of service and the date the payor pays) from 32 days to 13 days.
Once you've established your client's benchmarks, set realistic goals that help evaluate:
- Efficiency of the practice today
- Improvements over time, compared to past data
- How far a practice needs to go to reach its goals
Using a client's practice as a reference point, take a month-to-month comparison to determine what has changed: look at workflow, how quickly payments are processed, claim rejections and which payors are rejecting the most claims, and other benchmarks.
By putting data to work for clients, comparative analytics solutions allow practices to capture insights to use as benchmarks that were not previously attainable. RCM companies that leverage comparative analytics solutions will offer the value that providers are seeking now and in the near future – critical as healthcare executives determine which vendors to keep or cut, and also key in helping you win more business.