Applying analytics to revenue cycle management

In an increasingly complex healthcare environment, physicians must base financial strategies on more than assumptions and anecdotes. They need analytics.

Frank Cohen presents a solid case for analytics in a recent Physicians Practice webinar, entitled Analytics Do Nothing for Your Practice’s Health – True or False?.

People often use limited information – what they think is true – to make management decisions. This approach can lead to three pitfalls:

Failure to observe – assuming you know what the problem is without seeing what is really happening

Failure to plan – assuming you know how to fix a problem without first finding out what is causing it

Failure to validate – assuming the action you have taken to fix the problem has worked without measuring it

Diagnosing financial issues with evidence

When physicians first assess patients, they may have some intuitive ideas about what’s wrong. To be sure, they will likely conduct tests, review lab results and consult other resources before diagnosing and prescribing treatment. In other words, physicians provide evidence-based care.

Physicians should apply the same principles to their business practices. With a complex revenue cycle – involving patients, payers and an ever-changing array of code sets – it is critical to build processes that optimize profitability. In other words, physicians must use evidence-based management.

Problem-solving with analytics

As an example, let’s look at a practical problem:  We want to reduce days in accounts receivable. It’s tempting to just test practical solutions to this problem, based on what we think is going on. But we’ll increase our chances of a positive income if we apply analytics.

Now, let’s translate the practical problem into an analytical problem. To do that, we’ll need to address several questions, such as: How should we define accounts receivable? How do we calculate our receivables? Do we use rolling 12-month averages? How are we projecting future receivables?

We’ll need data for each individual step to develop an analytical solution. (In the webinar, Frank Cohen offers a workshop toolbox with data sets, articles and other resources to help with this process.)

If you have the right tools, getting this data is simple. To help illustrate the power of analytics solutions, Cornerstone Health Care shared its experiences as part of the webinar.

Cornerstone Health Care achieves better outcomes with business analytics

Located in North Carolina, Cornerstone Health Care is a multi-specialty 375-provider group that serves 800,000 patients annually. Using Allscripts Practice PerformanceTM, a business analytics and comparative benchmarking solution, Cornerstone applied analytics to several areas.

According to Penny Whitaker, business systems manager at Cornerstone, the solution provided insights in several key areas including reimbursements, accounts receivable, resource utilization, staff and physician coding, claim processing, payer performance and more.

Practice Performance also provides Cornerstone with new capabilities that have helped them improve their financial and operational performance such as:

Proactive email alerts that notify designated staff when key performance indicators fall outside an acceptable range;

Interactive dashboards that summarize key performance indicators, and enable staff to quickly drill down into the details with the click of a mouse; and

Comparative benchmarking charts that help the practice compare itself against peers by geography or specialty, and compare results within the different locations and departments at Cornerstone.

Cornerstone used these insights to make informed revenue cycle management decisions. For example, team members looked at claim denials by location, including registrations, pre-authorizations and referrals. They were able to see the data from different perspectives, including comparing results among different offices.

The result? Cornerstone identified new denial trends stemming from payer and regulatory changes. In one example, Cornerstone’s billing supervisor investigated denials from Medicare. Using analytics, she was able to quickly examine if the issue was affecting other payers and see the denial code volume. The team determined that a simple change to the claims format would address the problem. Cornerstone also identified new areas for training and improvements to the check-in and registration process.

Stop guessing, start knowing

As the webinar concluded, Frank Cohen observed that the healthcare industry is facing a monumental shift. If practices don’t handle data with analytics, they won’t be in business. If they’re not able to adapt, they won’t survive.

For more information, listen to the webinar or contact Allscripts Solutions Consultants at 1.800.334.8534.

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About the author

Edward (Ed) Wrzesinski, Jr., CMPE, is Director of Revenue Cycle Management Services for Allscripts. Prior to joining Allscripts, Wrzesinski spent 18 years in executive leadership roles with healthcare provider organizations including as Executive Director of Frederick Primary Care Associates, a 44-provider family practice group with nine locations operating in Frederick County, Maryland. Before that, Wrzesinski managed the Maryland staff practice for Green Spring Health Services, an 80-provider behavioral health practice. Wrzesinski also maintained an independent consulting practice, working with medical groups of various sizes on a variety of assignments. Wrzesinski is an honors graduate of The George Washington University, with a Bachelor of Business Administration degree. He has also completed numerous specialized training programs and is a graduate of the Center for Creative Leadership’s National Leadership Institute. Wrzesinski has been a Certified Medical Practice Executive and a member of the American College of Medical Practice Executives since 2001. He is active in a number of civic and service activities including the Rotary Club, the Boy Scouts of America, Little League, and the Jaycees.

2 COMMENTS on Applying analytics to revenue cycle management


deadra sault says:

07/16/2013 at 10:11 pm

Great post, Ed. It is indeed important to think analytically instead of making blind assumptions. That little bit of extra thought can solve a lot of problems.


EdgeMed says:

05/12/2014 at 12:44 pm

It is pretty obvious that just guessing at the problem is not the best way to go about things. However, people still guess! One hundred years ago I probably would have said that having a guess was ok, but now that we analytics available to us, I would give those people who think it is a good idea to guess a big shake to try to shake some sense into them!


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