Time is of the essence: Actionable analytics decrease denial rates, save time and money

Lisa Darsch, MSN, RN, Senior Clinical Advisor, EFFY, and Pedro Oliveira, Senior Architect, EFFY -

One key challenge that hospital leaders struggle to overcome is claim denials based on treatment authorizations.

These denials occur primarily when there is a deviation in the plan of care, and they burden clinical and operational teams to secure authorizations for treatment necessitated by a change in the patient's health status.

Too often, these approvals are not processed with the payer for a variety of reasons. While the screens on the existing overall management or operating system register the charges that would drop on the claim, the system fails to confirm payer authorization -- which is often not forthcoming.

Subsequently, the claims are denied, even though the care was rendered and the expense incurred -- which leads to a write-off for the hospital system. In the end, documenting medical necessity to ensure reimbursement lifts the burdens of claim denials that result from documentation failure.

The Struggle to Find a Solution
In an effort to resolve these issues, hospital leaders responsible for revenue cycle go through the arduous, sometimes confusing, process of evaluating several vendor solutions -- all of them making the same claims to deliver results. The financial downside of this process is that most hospitals have already invested significant funds in an overall management system and analytic tools, and executives do not want to risk discarding the OS and replacing it with a different and equally expensive transaction-based model.

While multiple vendors tout their product offerings, many on the market fall short of meeting needs and expectations. Ideally, hospital executives should seek a Revenue Cycle Management (RCM) optimization tool that can effectively address challenges specifically related to the struggles with denials management, appeals and Medicare local market rules. The goal, of course, is to ensure clinical and operational excellence while supporting the financial viability of the organization.

Adding to this complicated proposition, most hospitals systems today have undergone significant expansion over the past few years. This brings massive sets of disparate data to be reconciled and reviewed, and adds significant complexity to the RCM processes.

A Powerful, Cost-Effective Fix
One new platform fine-tunes an existing RCM transactional system, and eliminates the need to replace any existing system, even if that system is not ideal. Costs are reduced because RAID HEALTHCARE -- an end-to-end software platform used worldwide by leading healthcare systems, telecom companies, utilities, retail and other complex industries -- costs less than a replacement system, and is more powerful.

Furthermore, there are no disruption costs related to adapting to new processes, which can take months for a full system conversion. Even after completion, disruption is magnified by delays associated with playing “catch up” and making corrections. In fact, a new RCM system, including disruption challenges, can cost a large enterprise as much as $50 million.

By simply overlaying an actionable analytics system powered by RAID HEALTHCARE, managers can quickly gain control of aggregating data, and detecting/resolving issues that impact revenue integrity, as well as clinical and operational performance, in a way that is the most cost-effective.

Here’s a simple example of how actionable analytics work: If a drug treatment is changed to one that requires pre-authorization, an alarm is sounded, so the pre-authorization can be requested. The alarm is triggered by data originating from the pharmacy system (or module if incorporated across one large system) and matched to the third party payer’s requirements for pre-authorization. Without this capability, payment is denied. With it, a series of questions enables the organization to save millions of dollars.

Detect Issues As They Occur
Sophisticated actionable analytics systems allow a hospital to use any data from any transactional system to set up sophisticated alarms to detect issues immediately.

An analyst, using a RCM solution built upon RAID HEALTHCARE, has the reconciliation and analytical tools to rapidly respond to any alert. Instead of channeling the issue up through all of the relevant departments, which is time-consuming and demands the attention of a number of people, the analyst can simply offer an integrated workflow to guide a “fix,” resolving the problem quickly, and improving the bottom line.

In fact, healthcare leaders who have already adopted RAID Healthcare have found that the solution over-delivers. In one example, a large healthcare organization initially identified seven rules that governed authorizations, and tasked the RAID Healthcare tools to begin monitoring CPT charges. The resulting RAID Healthcare-generated alarms were so critical to diagnosing the problems with the authorization process, and the opportunity was so great to initiate corrective action, the hospital leaders quickly expanded the rule set to 10.

As a result, these powerful analytic tools led to savings related to denials and write-offs that accrued for this hospital organization at upwards of $800,000 in the first six months of operation in the clinical area of outpatient infusion therapy. Back-end processes were streamlined, relieving stress and time constraints imposed on the clinical staff, and inadequate or missing documentation of medical necessity was addressed, allowing the hospital to transition charges to patient self-pay or to initiating a change in the course of treatment.

With RAID Healthcare, the opportunity for better claim reimbursement, which is always a challenge with Medicare, is evident. Given the complexity of commercial claims and the daunting challenges, however, these processes are now under control for this particular hospital system.

Finding the Right Actionable Data Platform
Healthcare organizations should look for an efficiency platform that uses RAID Healthcare and overlays existing systems to help them compare massive amounts of data across their total enterprise, detect exceptions and problems, and guide interventions to improve efficiency that optimizes financial, clinical and operational performance.

The platform should also be powered with unique actionable analytics and function as a permanent, protective 24/7 auditing and reporting ‘umbrella’ that makes data comparable. By choosing the right actionable analytics platform, hospital leaders can rapidly take action.

The partner should be dedicated to healthcare efficiency and experienced in empowering hospitals, hospital systems and Integrated Delivery Networks to retrieve, review and compare massive amounts of operational, clinical and financial data across a total enterprise -- no matter its size, data incompatibility or platform complexity.

The RCM optimization platform should also provide customizable, exception-based triggers that identify deviations from norms, helping users reduce errors and denials, improve efficiency and productivity and meet compliance requirements. This kind of power is what healthcare leaders have been searching for: an RCM solution designed to make transactional systems smarter and cleaner, while generating significant ROI within months of implementation.

The views, opinions and positions expressed within these guest posts are those of the author alone and do not represent those of Becker's Hospital Review/Becker's Healthcare. The accuracy, completeness and validity of any statements made within this article are not guaranteed. We accept no liability for any errors, omissions or representations. The copyright of this content belongs to the author and any liability with regards to infringement of intellectual property rights remains with them.

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