Summary: Have you read about the sequestration? Do you know that Medicare cutbacks reduce reimbursement by 2% as of healthcare financial analysisApril 2013? Are you ready? Have you made adjustments to cover these reductions? Have you had your annual financial analysis?

Americans are coming around in their thinking and starting to buy-in to the notion of preventative healthcare. We are getting better about our routine visits to our primary care physician. We are exercising more. We are eating foods higher in nutrition and lower in fat and cholesterol.  Shouldn’t we do the same for our “financial healthcare”?

What can you do to try to compensate for the Medicare cutbacks, especially the 2% reduction in Medicare reimbursement?

  1. Perform a checkup on your data and reporting system. Is your data easily accessible? Is the data meaningful? Is the data accurate? Is the data valid? Is the data current? Can you obtain the data in ways that can most easily be analyzed? Is the data easily refreshed?
  2. Perform a checkup on your denied claims. How many claims are being submitted? How many are being denied? Why are they being denied? Are there trends? Are claims being submitted which are missing information or all of the information isn’t correct? Are there ways to reduce the number of denied claims? Can you identify training issues? Can you identify changes needed in policies and procedures? Are there issues in the timing of submissions? Are there issues in coordination efforts between primary and secondary providers?
  3. Perform a checkup on your revenue cycle and accounts receivable. What is the length of your revenue cycle? How many days are there between billing date and date received? What processes can be made more efficient? Are your billing processes standardized throughout your organization? Are you using online billing? Are you manually entering and submitting data? Are there data errors? Is your software up to date? Are there training opportunities? Is the data entered and submitted timey? Are you tracking and trending on a regular basis? Are there key performance indicators that are evaluated throughout the organization and not just by the finance department? Are there designated resources when billing questions arise?
  4. Perform a checkup on your scheduling process. How many appointments are scheduled each day? How many are “missed” or healthcare financial analysis“no-shows”? How much downtime is there during the day between appointments? Do you have an online appointment scheduling system? Do you have a mechanism for following up prior to the appointments to ensure the appointment won’t be missed or forgotten? Are the reminders by phone, text, email? Do you have a means of setting up appointments to allow those with more complex issues more or do you allot the same amount of time for each appointment? Have you considered such options as wave scheduling in which you schedule for example 3 appointments at the top of the hour and see them on a first come first served basis or do you schedule an appointment every 20 minutes? Have you reviewed your scheduling policies and procedures to ensure efficiency?
  5. Perform a checkup on your payer mix/contracting. Are you contracted with the right providers? Have you tried to negotiate your reimbursement rates recently? Do you know what provider options are available? Have you reviewed your provider contracts? Do you know when your contracts are up for renewal? Do you have a tracking mechanism to be able to view the major components of your contracts among your different providers in order to compare and contrast?
  6. Perform a checkup on your coding procedures. Are you using the correct codes to maximize reimbursement? Are you current on the ICD-10 codes? Are you transitioning from ICD-9 to ICD-10? Do you have coding experts that are constantly researching any new coding issues? Do you have review processes in place before submitting for reimbursement? Have you reviewed your policies and procedures to make sure you are keeping up with the ever-changing codes? Are you coding accurately? Are you coding timely? If claims are being denied, have you isolated coding issues and addressed?
  7. Perform a checkup on staffing ratios. Have you reviewed your staffing ratios by unit/department? Have you reviewed your payroll by unit/department? Are there areas in which there is a significant amount of overtime? Have you performed a cost analysis to see if it would be less expensive to hire another part or full time employee rather than pay overtime? Is your staff working efficiently? Is there downtime in certain units? Can staff be cross-trained? Can job functions be combined?
  8. Perform a checkup on cost/service. Have you performed an analysis to breakdown the true cost per service? Are you able to look athealthcare financial analysis, Medicare Cutbacks all of your services in tandem and determine which are the most costly on a net basis? Are you charging appropriately for services given their cost? Have you determined your return on investment? Do you know how many of each service need to be performed to break even?  Are you able to ascertain inefficiencies in service lines when analyzing the cost per service?
  9. Perform a checkup on insourcing versus outsourcing. Do you have the right mix of insourcing and outsourcing? Is it time to send out RFPs to determine if certain services might be more cost effective if provided by an outside source? Conversely, are some of the services you are outsourcing more cost effective to perform internally?
  10. Perform a checkup on your metrics. The key is to gather data and analytics, review the data, analyze for inconsistencies and inefficiencies, trend to determine common and significant issues, and correct any issues which are identified. Once this process is complete, start the process again. Reviewing, analyzing, trending, and correcting issue should be a continuous process. It is also important that analytics are reviewed on a global basis throughout the organization. It shouldn’t be the sole responsibility of, for example, the finance department. It takes collaboration from all areas to be successful and, in the end, increase profitability.

If you need additional assistance in performing a healthcare financial analysis, please contact our healthcare financial consultants today.

BHM Healthcare Solutions, a healthcare management consulting firm

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