Revenue Leakage

By Aaron Fulner, Product Manager, Edifecs
Twitter: @edifecs

Once a health plan determines it is bleeding money, what are the next action items to pursue?

Once a health plan has identified a functional area that is losing them revenue, what typically comes next is an independent operational review to assess the root cause of the issue(s). The independent, external, review is critical to ensure the health plan does not miss issues or gloss over problem areas.

We often see health plans lose money in enrollment management and encounter management for managed care plans. Health plans are typically involved in multiple programs and lines of business and the utilization of several, disparate systems and siloed processes is prevalent. Especially if the health plan has been involved in M&A activity or has entered new areas of business. All these factors can lead to a substantial loss of revenue both from the administrative cost and risk-adjusted revenue standpoints, again for the managed care plans. Risk-adjusted revenue is based on the quantity of compliant encounters that are accepted. To achieve revenue integrity, plans must strive to submit all encounters, focusing not just on compliance (i.e. adhering to submission SLAs) but also on the completeness of data submitted (especially for Medicare Advantage plans and the utilization of HCCs by CMS). Multiple programs, or lines of business, and the multiple systems and sets of processes that support them lead to reduced quality and completeness, not to mention encounters submitted outside of the SLAs established by the receiving entity (either the state or CMS). Combine these scenarios and what you have are health plans bleeding money in areas that are A: fixable; and B: don’t require a technology “heart transplant” or a “rip and replace.”

Once the review is completed, the health plan is likely to pursue technology solutions that enable a consolidation of operations, leverage a single solution for more than one program or line of business, and bring to fruition economies of scale. This means breaking down silos and fostering cross-functional collaboration to reduce duplicative systems and processes.

However, this is more than just a technology play. As we all know, the “right technology” means little if a health plan is burdened with cumbersome manual processes, internal communication is lacking, and teams are missing the right structure and makeup. To stop the bleeding, it takes a comprehensive “people, process, technology” approach. Anything less typically amounts to nothing more than a stop-gap measure and many times leads to greater revenue loss in the future.