Revenue Cycle Optimization: Tools and Strategies for Success

The transformation has started from fee for service into value-based care models driven by the Value-Based Purchasing (VBP) program and the Quality Payment Program (QPP) which includes Merit-based Incentive Payment System (MIPS) and Alternative Payment Models (APM).

Healthcare organizations will no longer be motivated by implementing and meeting program requirements like Meaningful Use, but instead will be driven by value-based care and risk-based payment models that focus on quality, outcomes and wellness for reimbursements.  Providers must find ways to improve the value of care they provide in a meaningful, measurable way. Providers are becoming increasingly responsible for their patient's cost and quality of care throughout the continuum, regardless of where and by whom services are provided.

As we travel down the path to value, navigating healthcare payment reform requires a significant transformation in many areas including the reimbursement model. If left unchanged, CBO's Long-Term Budget Outlook projects healthcare will make up over 20 percent of the Gross Domestic Product (GDP) and is projected to account for 30 percent of the US federal budget by 2025.

We are in the midst of this reimbursement transformation now. The VBP and QPP programs mark the beginning of a “new normal” characterized by fundamental changes to the reimbursement system. Reimbursement tied to quality performance has become a reality for hospitals and physicians. CMS’ aggressive goals aimed at increasing the percentage of Medicare payments associated with quality outcomes versus quantity of service create operational, procedural, and fiscal challenges. Financial as well as clinical strategies must be redesigned and executed in this new value-based care environment.

With this new payment model, organizations that create strong regional clinical teams with a keen focus on efficiencies, standards of care, and outcomes will be better positioned for success. They will share up side savings and risk down side loss given their ability to achieve high outcomes within fixed payments.  This is a significant shift from the fee-for-service, claims based denial management model. It requires a new level of alignment between Quality, IT and Finance.  Preparation for transition to value based reimbursement is essential but challenging as fee for service has not yet been eliminated - many organizations are juggling multiple payment models at once.  Understanding the nature of each and having a strategy that forecasts to complete value based reimbursement is critical for long term sustainability.

Part of this strategy includes tightening up revenue cycle processes; rethinking EHR build and workflow design in the areas of registration, medical necessity, clinical documentation improvement, supply chain and denials management.  Maintaining a high-functioning revenue cycle will also require special focus on tools and resources for reporting, tracking progress, and understanding the revenue at risk.

Medical Necessity as a service line may actually go away over time because organizations assume all the risk within bundled and capitated payment models.

Clinical Documentation Improvement is critical to identify pain points and documenting specificity and appropriateness. For example, complications and comorbidities (CCs and MCCs) can impact the total reimbursements but can also impact readmission adjustment scoring, reducing your Readmission Rate Reduction program scores. Organizations that can identify opportunities for improvement using real-time alerts within targeted areas will be better positioned for the transition.

Revenue Cycle in this era of health care reform is challenging. We all seek success under this new normal in health care. Optimizing revenue capture in a quality reimbursement model requires acquisition of new knowledge and the use of new tools and strategies.

For anyone interested in more detail on this subject, Jodi Frei and I are presenting Revenue Cycle Optimization: Tools and Strategies for Successfully understanding your revenue at risk in your organization at the Becker's Hospital Review Annual IT and Revenue Cycle Conference at the Hyatt Regency, Chicago on Friday, September 22, 2017, from 2:30 pm to 3:10 pm.

We will discuss strategies to improve efficiencies in registration, insurance authorization, clinical documentation improvement, supply chain and denials management.

Jodi will share financial lessons learned from Northwestern Medical Center having recently completed a 12-month system upgrade and rebuild to MEDITECH's 6.1 platform. Metrics that matter, strategies to best prevent revenue loss in times of transition, and optimization of quality based reimbursement are among the topics to be covered.

Come and be a part of the discussion!