Why physician billing holds the key to preventing hospital closures
Information technology can assist the revenue cycle process, aiding cash flow to reduce billing cycles.
According to the American Hospital Association, hospitals are closing at a rate of about 30 a year. A recent Bloomberg article predicts the pace of closures to accelerate over the next 18 months.
In August, Knoxville, Tenn.-based Curae Health and its three hospitals in Mississippi filed for Chapter 11 bankruptcy. In July Rockdale, Texas-based Little River Healthcare, its parent company and several of its affiliated entities entered Chapter 11 bankruptcy. In May, Arizona-based Gilbert and Florence Hospitals at Anthem entered Chapter 11 bankruptcy. The list goes on.
Bloomberg goes on to quote Morgan Stanley analysts who looked at data from roughly 6,000 U.S. private and public hospitals and concluded eight percent are at risk of closing; another 10 percent are considered “weak." The firm defined weak hospitals based on criteria for margins for earnings before interest and other items, occupancy and revenue. The “at risk” group was defined by capital expenditures and efficiency, among others.
This uncertainty within the healthcare industry has hospitals and health systems seeking new ways to generate revenue. For many, the answer is hiding in plain sight; their physicians and allied health providers.
Doctors are the lifeblood of a hospital. They directly impact patient outcomes and patient experiences. They are also the primary source of a hospital’s revenue – or they should be. On average, a physician or surgeon generates $1.56 million annually for their affiliated hospitals. If a physician isn’t billing to their fullest potential, serious revenue may be lost.
A hospital’s complex economic environment elevates the importance of getting—and keeping—physicians and surgeons billing to stabilize revenue. Here are four ways that physicians and surgeons can improve margins.
Don’t overlook the importance of contract management. Hospitals are contract heavy. In fact, it isn’t uncommon for a large hospital to have tens of thousands of contracts. Relying on manual methods to manage these contracts is time consuming and unreliable. Poorly managed contracts also have a trickle-down effect—when contracts sit in limbo credentialing and enrollment processes are delayed which means providers can’t bill.
Automated contract life cycle management technology greatly speeds contract creation and approvals by aggregating everyone involved in the process of reviewing, signing, extending and renewing contacts into one workflow. Using a contract life cycle management tool, physician contracts are completed at an average of 31 days faster than using a manual process.
Considering the average daily billing total of $5,500 for a family practice physician, those 31 days add up to $170,000 of cash flow. Furthermore, contract life cycle management technology provides direct visibility into expired or expiring contracts as well as duplicate contracts. Setting alerts in advance of an expiring contract ensures nothing is overlooked or missed. It also affords staff time to identify opportunities to renegotiate better deals.
Re-evaluate credentialing and provider enrollment processes. Managing the credentialing life cycle can be a long and tedious process. When not done correctly, providers are unable to bill for services rendered, which negatively impacts an organization’s revenue.
The primary source verification (PSV) process can take months and requires diligent follow-up to ensure that all verifications are complete and accurate. Next, there is the initial provider enrollment process, which leverages essentially the same data gathered during the credentialing process, to secure a provider’s participation in health plans and achieve approval to bill the plan for services rendered.
Tracking deadlines and ensuring that a provider remains properly enrolled at all times is another time-consuming process that requires meticulous attention. Managing each provider through the process of primary source verification, privileging, and provider enrollment, as well as maintaining PAR status after the provider is enrolled, is laborious. Integrating credentialing and provider enrollment data into a single system that automates the workflow of the entire credentialing life cycle offers greatly simplifies these processes. Proactive reminders along the way and significantly streamlines and speeds up these processes.
Don’t underestimate the value of integrating contract and credentialing life cycle data. The ability to integrate contract life cycle management with a credentialing software offers huge benefits. Significant time is saved when duplicate data entry is avoided. Cross-team access to provider data allows everyone involved in getting a payer ready to bill to track where a contract is each step of the way. Setting automated alerts when contracts are complete means the credentialing team can immediately begin working on privileging and then enrollment. Integration greatly reduces the timeframe it takes for all of this to happen in comparison to each process being separate and disconnected.
Take a look at skilled resources. For large hospitals and health systems with hundreds, sometimes thousands, of providers, managing these processes in-house is often not possible. Organizations that lack the necessary staff and processes to manage contracts, credentialing and provider enrollment can expect a negative impact to their bottom line. If the volume is too high, consider an outsourced partner.
Look for a vendor with proven automated workflow technology that integrates the contract and credentialing life cycles. In addition to demonstrating proven best-practices procedures, the vendor should serve as a partner. This means working directly with key stakeholders to map out the most effective and efficient process to address both immediate and long-term project objectives.
Ensuring 100 percent participation status with every payer for each provider at every location they practice should be a standard goal for every hospital. An integrated approach for managing the physician contract and credentialing life cycle will play a key role in eliminating bottlenecks and oversights so physicians can get—and stay—billing.
In August, Knoxville, Tenn.-based Curae Health and its three hospitals in Mississippi filed for Chapter 11 bankruptcy. In July Rockdale, Texas-based Little River Healthcare, its parent company and several of its affiliated entities entered Chapter 11 bankruptcy. In May, Arizona-based Gilbert and Florence Hospitals at Anthem entered Chapter 11 bankruptcy. The list goes on.
Bloomberg goes on to quote Morgan Stanley analysts who looked at data from roughly 6,000 U.S. private and public hospitals and concluded eight percent are at risk of closing; another 10 percent are considered “weak." The firm defined weak hospitals based on criteria for margins for earnings before interest and other items, occupancy and revenue. The “at risk” group was defined by capital expenditures and efficiency, among others.
This uncertainty within the healthcare industry has hospitals and health systems seeking new ways to generate revenue. For many, the answer is hiding in plain sight; their physicians and allied health providers.Doctors are the lifeblood of a hospital. They directly impact patient outcomes and patient experiences. They are also the primary source of a hospital’s revenue – or they should be. On average, a physician or surgeon generates $1.56 million annually for their affiliated hospitals. If a physician isn’t billing to their fullest potential, serious revenue may be lost.
A hospital’s complex economic environment elevates the importance of getting—and keeping—physicians and surgeons billing to stabilize revenue. Here are four ways that physicians and surgeons can improve margins.
Don’t overlook the importance of contract management. Hospitals are contract heavy. In fact, it isn’t uncommon for a large hospital to have tens of thousands of contracts. Relying on manual methods to manage these contracts is time consuming and unreliable. Poorly managed contracts also have a trickle-down effect—when contracts sit in limbo credentialing and enrollment processes are delayed which means providers can’t bill.
Automated contract life cycle management technology greatly speeds contract creation and approvals by aggregating everyone involved in the process of reviewing, signing, extending and renewing contacts into one workflow. Using a contract life cycle management tool, physician contracts are completed at an average of 31 days faster than using a manual process.
Considering the average daily billing total of $5,500 for a family practice physician, those 31 days add up to $170,000 of cash flow. Furthermore, contract life cycle management technology provides direct visibility into expired or expiring contracts as well as duplicate contracts. Setting alerts in advance of an expiring contract ensures nothing is overlooked or missed. It also affords staff time to identify opportunities to renegotiate better deals.
Re-evaluate credentialing and provider enrollment processes. Managing the credentialing life cycle can be a long and tedious process. When not done correctly, providers are unable to bill for services rendered, which negatively impacts an organization’s revenue.
The primary source verification (PSV) process can take months and requires diligent follow-up to ensure that all verifications are complete and accurate. Next, there is the initial provider enrollment process, which leverages essentially the same data gathered during the credentialing process, to secure a provider’s participation in health plans and achieve approval to bill the plan for services rendered.
Tracking deadlines and ensuring that a provider remains properly enrolled at all times is another time-consuming process that requires meticulous attention. Managing each provider through the process of primary source verification, privileging, and provider enrollment, as well as maintaining PAR status after the provider is enrolled, is laborious. Integrating credentialing and provider enrollment data into a single system that automates the workflow of the entire credentialing life cycle offers greatly simplifies these processes. Proactive reminders along the way and significantly streamlines and speeds up these processes.
Don’t underestimate the value of integrating contract and credentialing life cycle data. The ability to integrate contract life cycle management with a credentialing software offers huge benefits. Significant time is saved when duplicate data entry is avoided. Cross-team access to provider data allows everyone involved in getting a payer ready to bill to track where a contract is each step of the way. Setting automated alerts when contracts are complete means the credentialing team can immediately begin working on privileging and then enrollment. Integration greatly reduces the timeframe it takes for all of this to happen in comparison to each process being separate and disconnected.
Take a look at skilled resources. For large hospitals and health systems with hundreds, sometimes thousands, of providers, managing these processes in-house is often not possible. Organizations that lack the necessary staff and processes to manage contracts, credentialing and provider enrollment can expect a negative impact to their bottom line. If the volume is too high, consider an outsourced partner.
Look for a vendor with proven automated workflow technology that integrates the contract and credentialing life cycles. In addition to demonstrating proven best-practices procedures, the vendor should serve as a partner. This means working directly with key stakeholders to map out the most effective and efficient process to address both immediate and long-term project objectives.
Ensuring 100 percent participation status with every payer for each provider at every location they practice should be a standard goal for every hospital. An integrated approach for managing the physician contract and credentialing life cycle will play a key role in eliminating bottlenecks and oversights so physicians can get—and stay—billing.
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