Sports (specifically football) and healthcare seem to be on opposite ends of the spectrum, but there are more correlations than you think. Not to say the healthcare industry involves running full speed and attempting to tackle someone who is twice your size, but they both require a system where you need to surround yourself with the right mix of roles and talent.
But how do they do that?
Successful professional and collegiate football teams are consistently great because they’ve established a system where everyone knows their job – players, coaches, upper-level management, and even the equipment crew. Likewise, success with efficient and profitable healthcare providers begins with everyone having a clear understanding of their role, the team’s goals and specific individual performance measures.
A successful revenue cycle team is not reliant on a single individual or a single payer. The right combination ranges from payer contract negotiations, to registration, to billing, to appealing and collecting underpayments and denials. Similarly, the financial success of your revenue cycle also depends on having the right payer mix, the right reimbursement methodologies and the right staff to manage it.
Here’s a look at the starting lineup of the payers by position and how their roles contribute to driving the bottom line:
The Linemen: Government Payers – Medicare and Medicaid
The two governmental payer programs and the staff that manages these programs are the foundation. Just as the linemen are nearly half of the players on the field, Medicare and Medicaid typically represent 50% of an organization’s revenue. There is a level of consistency and expectations with linemen. They are easy to overlook in that they just block and tackle, but having the right chemistry and orchestration often determines the success of the play and the overall game.
It is often said “games are won and lost in the trenches.” Whether the play calls for run-blocking or pass-blocking, controlling the line of scrimmage is a critical component to a successful outcome. Because these two payer groups control such a large portion of the provider’s revenue, it’s crucial their regulations are followed to receive the correct and full amount of reimbursement.
Tight Ends: Bundled Payment Programs
Tight Ends operate in a dual role. They line up on the field as a part of the foundational group of players but have the flexibility to make the big play. Similarly, value-based reimbursement and alternative payment models (in which a portion of the healthcare provider’s payment is tied to performance and based on cost and quality measures) are increasingly becoming part of the hospital’s reimbursement mix. This is due in part because the Centers for Medicare and Medicaid Services (CMS) plan to move 50 percent of payments away from traditional fee-for-service to alternative models by the end of 2018.
Because of the financial incentive tied to quality, they can help drive the bottom line. Just like Tight Ends are required to block, many hospitals are already required to participate in these bundled payment programs. However, Tight Ends can serve a dual-purpose because of their ability to score. For example, some hospitals scored a touchdown in their first year of the Comprehensive Care for Joint Replacement (CJR) program by receiving a bonus payment from CMS for beating the spending target through better management of the post-acute care (PAC) process. As bundled payment programs become more commonplace in healthcare, hospitals need to recognize this and prepare accordingly.
The Playmakers: Commercial Payers
Next, there are the commercial payers and the staff that manages them. Let’s call these guys the Wide Receivers and Running Backs. They have the power and versatility to make the big plays and provide increased reimbursement for the provider – if coached properly.
Blue Cross Blue Shield/Anthem plans are the Running Backs. They get the ball more than the Wide Receivers based on their size and field presence. As a result, these plans often have the largest market share and volume. In turn, they often leverage this in payer contractual rates, terms and methodologies.
United Healthcare, Cigna, Aetna, Humana, and Kaiser Permanente are also key players on the field of revenue cycle success. They provide critical volume to drive the bottom line and make a difference in the hospital’s net revenue.
Providers want to get the ball in the hands of the playmakers. Having the right reimbursement mix and the right play calling with the playmakers will determine how many points are scored and how profitable your revenue cycle department will be.
Quarterback: Revenue Cycle Leaders
Lastly, but most importantly, are the revenue cycle leadership roles (i.e. the Quarterback) that are responsible for managing all of the on-field players and making sure the offense is operating smoothly. They know every play and every team member’s role. In a revenue cycle, they actively participate in negotiating the payer contracts to make sure both the provider and the payer are in agreement with the reimbursement terms. Just like a Quarterback, if the hospital executive doesn’t believe the contract terms are in the best interest of the team, the quarterback needs to call an audible and make the necessary change.
The Quarterback also must also evaluate each play just the revenue cycle leadership must audit and evaluate the reimbursement with each claim.
At the end of the day, it is the responsibility of the hospital executives to assess the actual reimbursement and make on-field decisions and alterations that might affect the hospital’s bottom line.
Integrated reimbursement management software (hospital contract management and denial management) is the part of the Quarterback’s playbook. Prospective contract modeling should be used to predict the new outcome of net revenue. Every account should be calculated and audited against actual payments to identify and recover underpayments. Payer scorecards should be used to understand overall performance and win/loss success with service lines and appeals.
Player (Payer) Performance
Just as professional teams evaluate and compare its players through performance and statistics, the revenue cycle, along with its payers, should be evaluated the same way.
Some statistics to evaluate include:
- Year over year collections
- Collections by payer
- Collections by month
- Collections by service code
Sample Payer Scorcard
Keeping Score with Metrics
Keeping score in a football game is pretty straightforward, but it can be unclear in the game of the healthcare revenue cycle. How do you even know what to measure?
These are the four metrics used to measure your organization’s success with managing payer contracts:
1. Are all contracts up-to-date?
This can help your organization increase annual profits by 2-3% by spotting any significant underpayments. Integrating hospital contract management and denial management provides a known value for each underpayment and/or denial. It decreases the chances of missing a large number of smaller balances when staff is too heavily focused on the small amount of larger balances.
2. Are account errors resolved in a timely manner?
This performance metric allows for more potential revenue recovery, leading to an appropriate cash flow. Unresolved errors are classified as defective accounts because they lack sufficient data to be processed in the hospital contract management system. This metric should be monitored and reported weekly.
3. Does your system calculate accurately? How can you be sure?
The third performance metric is determined by looking at two things:
- the payer’s calculation of the allowed amount
- the hospital contract management system’s calculation
This metric should be monitored continuously and reported on a monthly basis.
4. Are the payments accurate?
This final performance metric is designed to prevent inaccurate payments from occurring and should be reported monthly.
By implementing these metrics into your day-to-day operations, your organization can truly measure its payer contract management performance and focus more on the immediate needs of the patient.
At the end of the day, the main goal is to manage the right payer mix for maximizing your reimbursement, and ultimately, your bottom line. Whether you’re managing a football team or a hospital, it means taking the time to assess what your needs are and putting the right players in the system.
By understanding payer roles and how they impact the final score (i.e. your bottom line), healthcare organizations will put themselves in a better position to win the reimbursement game.