It’s no secret that for healthcare providers, maintaining consistency is everything; consistency in the quality of patient care, consistency in management style, and consistency in setting and achieving long-term financial goals.
And for organizations struggling to manage aspects of the revenue cycle, identifying the source of the issue is often times the biggest hurdle. But without implementing a system for tracking your organization’s entire revenue cycle (from patients scheduling a procedure to the payment posting process for that procedure), how will your facility be able to determine the source of the issue to prevent it from negatively affecting your bottom line?
Because the success of a provider’s revenue cycle is ultimately measured by the consistency and accuracy of revenue from both payers and patients, it’s crucial to take a step back and analyze the factors that drive this revenue, beginning with a sound reimbursement strategy.
Ask yourself these questions…
- What steps can I take to ensure that all back-office data and processed claims are accurate and up-to-date?
- What leverage does my organization have with commercial payers during contract negotiations?
- What is the main competitive advantage my organization has for providing patients with price estimates? (i.e. accuracy of the estimates, lower rates, etc.)
- Does my organization have the ability to manage its patients across the entire continuum of care?
By asking yourself these questions, your organization can evaluate your current revenue cycle management (RCM) system and determine which areas need the most improvement an efficient and accurate revenue cycle.
Due to the complexity of most RCM systems, however, many providers have begun to integrate a “Revenue Cycle Matrix” used to outline the steps or building blocks that revolve around accurate reimbursement calculations. More specifically, it allows providers to shed light on the individual factors that contribute to maximum revenue including contract governance, payer negotiations, pricing transparency, and population health management.
Here’s a breakdown of each level:
- Contract Governance (Level 1) – Think of contract governance as the foundation for your organization’s reimbursement strategy. If managed properly, it can drive your payer negotiation and price transparency to ultimately create a sustainable population health strategy. It’s essential, however, that accuracy and contract governance run hand-in-hand in order to ensure that there are no errors within the day-to-day workflow process (i.e. identifying underpayments, reporting denials, etc.), the technology, and ensuring that everyone knows their role on the team and can he held accountable if an issue were to arise.
- Payer Negotiation (Level 2) – After establishing a solid foundation for contract governance, the next phase involves making sure that the payer negotiation process directly reflects the current and future reimbursement goals of your organization. This entails making sure that your top payers’ future contract terms are accurately modeled to give you a clear understanding of the impact on reimbursement.
- Pricing Transparency (Level 3) – After ensuring that all of your payer contracts are properly managed, now is the time to consider your pricing strategy compared to that of your competitors. Specifically, the competitive advantage analysis focuses on patient engagement, market share (relevant to other healthcare providers in your region), and point of service collection rates. By enabling greater price transparency within the organization, ¬¬patients will be more satisfied with their experience and more likely to take care of their financial responsibility upfront.
- Population Health (Level 4) – After laying the groundwork with the first three levels of the revenue cycle matrix, now is the time to focus on strategic planning for optimal population health management. This involves pulling together all patient data across the entire continuum of care (acute care, home health, SNF, rehab, etc.) and analyzing that data as an actionable patient record. By providers working and sharing information, healthcare organizations can improve clinical outcomes at a lower financial cost. Ultimately, this can help to bend the cost curve of healthcare.
By using this matrix to manage an organization’s revenue cycle, healthcare providers can build a strategy tailored to their specific needs while simultaneously streamlining the revenue cycle process from the time a patient is scheduled for service all the way to payment posting.
Looking to build a revenue cycle management strategy for your healthcare organization? Contact PMMC and discover how to maximize your revenue with an organizational maturity strategy.
Brad Josephson is the Director of Marketing and Communications at PMMC, a provider of revenue cycle solutions for healthcare providers. Brad received a Bachelor of Arts, Public Relations and Marketing Degree from Drake University. Brad has a deep knowledge of revenue cycle management tools which improves the financial performance of healthcare organizations.