Since the beginning of the COVID-19 pandemic, many hospitals have been struggling, with profit margins now hovering just over 1%.
Data analysis can help hospitals plan for profitable growth in 2023
After several years of pressure from the COVID-19 pandemic, profit margins in the health care system have been at historical lows, an industry average of 1.22% as of September 30, 2022. A variety of factors explain the performance issues, making it difficult to see the big picture and plan for future growth. As providers look to adapt to more profitable services and embrace value-based reimbursement, they must protect their flank by optimizing the revenue cycle.
Revenue cycle management (RCM) involves a range of practices, including:
- Registering patients and confirming identity and insurance benefits (as well as eligibility and pre-authorizations).
- Validating and submitting claims information.
- Collecting payments from both payers and patients.
There are many individual processes within each of those steps, creating a complex, interconnected system that involves clinical staff, as well as administrators in coding, patient engagement, billing, claims, collections, and more.
How can RCM leaders get to the bottom of the issues they are seeing to maximize payment? The answer is to use one of their most valuable assets — data — in more meaningful ways to drive performance improvement initiatives. Smart data analytics can accomplish this by efficiently monitoring key performance indicators and giving insight into trends and changes.
Collecting and Analyzing Data
Data-driven decision-making is at the core of staying on top of macro and micro trends in the emergency medicine space. Emergency department (ED) decision-makers must know in real time if their payer mix is changing, why revenues may be trending down, if denials are going up, and what is driving these outliers.
d2i’s Revenue Cycle Management Performance Analytics (RCMPA) software solution is taking the guesswork out of identifying root causes. Using a balanced scorecard methodology to organize performance metrics, the system employs the “5 Why” process to drill down to causal factors.
Hospitals should establish which KPIs they want to monitor, as well as individual departmental benchmarks and. Without understanding how the health care ecosystem interacts within itself and with the external environment, it is unlikely that stakeholders can effectively course-correct. Analyzing these KPIs — plus many more questions — on a weekly, monthly, or annual basis is crucial to understanding how a business is changing.
Continuous Documentation Improvement
After big changes to E/M coding in 2021, and more on the horizon for 2023, organizations should be auditing and confirming that they are capturing all required documentation. Quality programs, as well as E/M billing, rely on complete and accurate documentation. If there are performance or EHR-driven gaps, these need to be corrected sooner, rather than later.
Are the right levels of service being billed, and is medical decision-making (MDM) documentation sufficiently describing the complexity of MDM needed for E/M coding?
Have physicians and staff received education about changes to E/M coding that started January 1, 2023? Many codes have been added, deleted, and changed, which can result in denials and delayed payments if billing and coding staff aren’t ready.
Maximizing Quality Program Payments.
In 2023, the Merit-based Incentive Payment System (MIPS) quality payment program (QPP) will be a more significant portion of ED payment. On November 1, the 2023 QPP final rule was released: Maximum payment adjustments for 2024 reporting (2023 performance) will be +/- 9%, and the number of points required to avoid penalty is increasing every year.
Opportunities within pay-for-performance programs not only promote quality patient outcomes, but also make good financial sense. For organizations to be ready with the correct data to support their MIPS efforts, they need a solid methodology and data strategy in place.
With a solid data strategy, organizations can be poised to maximize revenue in 2023. In today’s high-pressure environment, there is less room than ever for missteps. Avoid those by partnering with the company that understands health care data and industry trends.
Contact d2i to learn more about our RCMPA solution and how you can use a dashboard of actionable data to speed cash flow, improve payer contracting, and reduce denials as you maximize your resources in 2023.