How to Increase Cash Flow Using Data and Analytics
This article is a summary of the webinar presentation, “Using Analytics to Increase Cash Flow,” by Greg Stock, MPA, President and CEO at Thibodaux Regional Medical Center, and Mikki Fazzio, RHIT, CCS, Director, HIM and Clinical Documentation Improvement, at Thibodaux Regional Medical Center.
In business, cash is king, and that’s true for healthcare organizations too. Financial challenges are the number one issue facing hospitals today, according to a 2018 survey of hospital CEOs by the American College of Healthcare Executives (ACHE). Among the financial challenges facing hospitals today are declining reimbursement, rising costs, changes in payer mix, declining inpatient volume, documentation and coding issues, increased payer denials, more regulatory requirements, and bad debt, to name a few. When hospitals face this many challenges at once, it can lead to a negative bottom line. Even if hospitals remain profitable, they need to uphold healthy margins in order to maintain and further the mission of helping patients live healthier lives.
Common Strategies to Improve Financial Performance
To maintain healthy margins, hospital leaders must seek opportunities to boost revenue through improved financial performance and reimbursement. Some common strategies include the following:
- Improving documentation and coding accuracy.
- Reducing the number of outstanding bill hold accounts.
- Reducing accounts receivable (A/R) days.
- Managing discharged not final billed (DNFB) cases.
Managing the DNFB Process
While many of these strategies have been around for a long time and are top-of-mind for healthcare leaders, many C-suites and department leaders are unfamiliar with managing DNFB cases, where bills remain incomplete due to gaps in coding or documentation. According to a 2019 poll of “Using Analytics to Increase Cash Flow” webinar attendees, 41 percent said they were “unfamiliar” with their facility’s DNFB process and an additional 19 percent said they were “somewhat familiar.” Only 16 percent of attendees categorized themselves as “very familiar” with the DNFB process at their facility.
Effective management of the DNFB process is one way hospitals can improve their financial performance and cash flow. However, without a robust data analytics program to support these efforts, meeting goals around DNFB improvement remains elusive for many hospitals.
According to Health Leaders Media, accounts may be unbilled for a variety of reasons:
- The account requires coding that is not yet complete.
- The account is coded but awaiting charges.
- The account is coded but lacks a corresponding charge, often identified during claim-editing.
- The account is coded but gets rejected during claim-editing because of an invalid revenue code, inaccurate payer designator, or other missing element.
Whether these accounts are waiting for a medical coder or physician documentation, they can account for millions of dollars just waiting to be processed. The implementation of ICD-10 in 2015 means an additional level of specificity and documentation is required, further compounding the problem for healthcare organizations that don’t get and keep their DNFB process in check.
Identifying Opportunities for Improvement
As hospital bottom-lines shrink, leadership may respond with belt-tightening tactics such as cutting staff or operating costs, which can appear effective initially. However, these cuts often lead to declining employee morale and can negatively impact the patient experience. Hospitals need to identify a sustainable approach by analyzing opportunities most likely to deliver the ROI they need, and then focus on those identified areas for improvement. However, without robust analytics to support these improvement efforts, targeted goals or benchmarks may not be realized unless healthcare organizations commit to built-in accountability and visibility to ensure sustained improvements.
A focus on improving coding and documentation processes, such as DNFB, can have big pay offs for healthcare organizations by alleviating cash flow problems and improving efficiency and accuracy in what is frequently a time-consuming manual process. Manual, inefficient processes can result in overburdened medical coders and physicians, contributing to burnout. And, if organizations don’t have an analytics platform in place, they may lack the data needed to carry out these processes, the data may be disorganized, or the process of reviewing the data may be overwhelming due to the lack of functionality.
The right analytics platform can also help automate these time-consuming processes, by organizing, sorting, and filtering data, and allowing the billing department to be proactive by putting processes in place to avoid delays in payment and spend less time organizing the data and more time putting the data to use. Once in place, the analytics platform can help identify the greatest areas of opportunity for further improvements.
Using Data Analytics and Process Improvement to Achieve Goals
The first step for many healthcare organizations embarking on a process improvement journey is investing in an open, scalable platform for analytics. While the impetus for process improvement is often financial concerns, making an investment in analytics may seem counterintuitive, but is a necessary step in finding and targeting the greatest opportunities for improvements. Although it may take time to get up and running with the analytics platform, organizations can quickly see improvements to their bottom line by automating manual processes and hastening cash-flow on accounts caught in limbo.
In the example of the DNFB process improvement, this might include the following steps:
- Invest in analytics.
- Fine-tune and verify analytic data.
- Communicate consistently with physicians and key departments.
- Educate key departments on data and analytics and give access when appropriate.
- Revamp time-consuming processes.
- Revise department structure and create new roles.
- Maintain and augment results through continuous improvement.
In the case of Thibodaux Regional Medical Center, these steps resulted in a $2.4 million increased cash flow, according to the results published in Health Leaders Media. The organization was able to achieve these results because its analytics platform offered fast and easy access to the information needed. The medical center was also able to improve physician documentation, reduce A/R days, and improve workflow.
Creating Lasting Change
Inaccurate analytic data has little value and can cause resistance to change. When embarking on the process improvement journey, it’s important for healthcare organizations to invest both the time and money that’s needed to provide access and clarity of data to drive change. Consistently sharing data with physicians can help promote engagement and keep them involved and committed to the process. Additionally, having a robust analytics platform, efficient processes, and accountability translates to sustained success.
With declining cash flows, increasing regulatory and reporting requirements, and tightening margins, healthcare organizations need to be mindful of their bottom lines and their cash flows. Improved reimbursement, efficient, automated processes, and proactive action are all needed for hospitals to stay afloat in today’s demanding environment. The right data analytics platform can help organizations identify opportunities, provide timely access to the right data, and monitor trends to maintain and expand their progress.
Would you like to learn more about this topic? Here are some articles we suggest:
- Healthcare Data Management: Three Principles of Using Data to Its Full Potential
- Why Clinical Quality Should Drive Healthcare Business Strategy
- Linking Clinical and Financial Data: The Key to Real Quality and Cost Outcomes
- Transforming Healthcare Analytics: Five Critical Steps
- Prioritizing Healthcare Projects to Optimize ROI