Health systems rely on effective revenue cycle management to follow the patient journey, navigate claims, and ensure the organization collects payment for its services. In today’s complex and fluid healthcare industry, in which revenue cycle management is about much more than billing and collecting payment, traditional revenue cycle approaches can’t meet escalating demands. Additionally, with lost volume due to COVID-19, organizations can’t afford to miss an opportunity for payment. The contemporary healthcare landscape requires a comprehensive, standardized, and data-driven revenue cycle process. Health systems that leverage data to support revenue cycle management improve their financial outcomes in three significant ways: 1. Reduce denials. 2. Increase collections with propensity-to-pay insight. 3. Improve discharged-not-final-billed efforts.

1. The Healthcare Revenue Cycle:
How to Optimize Performance

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The Healthcare Revenue Cycle
Patient care tends to get top billing in the
healthcare industry, but many behind-the-
scenes activities make each encounter,
procedure, and life saved possible.
Healthcare revenue cycle management,
for example, is a critical function within
an organization that keeps the business
operating and servings its community.

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The Healthcare Revenue Cycle
The revenue cycle encompasses processes
from creating a patient account to collecting
payment for healthcare services and each
step in between.
As such, health systems rely on effective
revenue cycle management to follow
the patient journey, navigate claims,
and ensure the organization collects
payment for its services.

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The Healthcare Revenue Cycle
Revenue cycle management today is about
much more than billing and collecting payment.
As the healthcare industry grows, traditional,
time-consuming (often manual) approaches
to managing the revenue cycle require too
many resources and leave unacceptably
broad margins for error.
Meanwhile, out-of-the-box revenue cycle
solutions don’t allow customization or
integrations with payer and EMR data.

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The Healthcare Revenue Cycle
The contemporary healthcare landscape
requires a comprehensive, standardized,
and data-driven revenue cycle process.
Additionally, lost volume due to COVID-19
has furthered the need to transform revenue
cycle management, as organizations can’t
afford to miss an opportunity for payment.

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Three Ways Data Improves Healthcare
Revenue Cycle Management
Health systems that leverage data to support
comprehensive and accurate revenue cycle
management improve their financial outcomes
in three significant ways:
1. Reduce Denials
2. Increase Collections with Propensity-to-Pay Insight
3. Improve Discharged-Not-Final-Billed Efforts

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Three Ways Data Improves Healthcare
Revenue Cycle Management
1: Reduce Denials
Within the revenue cycle process, claim
denials cost each healthcare provider an
average of $5 million every year.
Organizations can recover some of this
loss by using an analytics solution to
integrate data from multiple sources to
understand the denials’ causes.
With such insight, health systems can
implement denial prevention plans and
procedures for recovering the denials.

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Three Ways Data Improves Healthcare
Revenue Cycle Management
1: Reduce Denials
Billings Clinic, for example, found
opportunities to reduce its denials when it
pinpointed the sources of the denials.
The organization leveraged the Health
Catalyst Data Operating System (DOS™)
platform and a robust suite of analytics
applications to implement a revenue
cycle analytics application.

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Three Ways Data Improves Healthcare
Revenue Cycle Management
1: Reduce Denials
The resulting insights informed data-
driven improvement efforts that have
yielded positive outcomes, including a
$4.5 million reduction in denials in just 12
months, resulting from an 8 percent
relative reduction in overall denial dollars.

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Three Ways Data Improves Healthcare
Revenue Cycle Management
2: Increase Collections with Propensity-to-Pay Insight
With patients responsible for an increasing
amount of their healthcare costs, self-pay
accounts are now the top contributor to bad
debt for hospitals and health systems.
Bad debt accounts for more than $55 billion
in healthcare revenue loss annually.
Health systems need strategy-driven
processes for patient collections—in other
words, a reliable propensity-to-pay
predictive model—to get ahead of bad debt.

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Three Ways Data Improves Healthcare
Revenue Cycle Management
2: Increase Collections with Propensity-to-Pay Insight
Allina Health leveraged DOS to navigate its
bad-debt challenges by creating a predictive
model to support a propensity-to-pay strategy.
The resulting propensity-to-pay machine
learning model uses artificial intelligence to
predict the probability that the patient will pay
their bill during the month in question.

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Three Ways Data Improves Healthcare
Revenue Cycle Management
2: Increase Collections with Propensity-to-Pay Insight
Propensity-to-pay predictions have helped
Allina increase overall collections by $2 million
in just one year, including collecting more than
$660,000 in additional patient payments during
the strategy’s first two months.

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Three Ways Data Improves Healthcare
Revenue Cycle Management
3: Improve Discharged-Not-Final-Billed Efforts
Managing discharged not final billed (DNFB)
cases, where bills remain incomplete due to
coding or documentation gaps, is one
important way hospitals can improve
revenue cycle performance.
However, without analytics to support
efforts, meeting a target for DNFB
improvement remains a serious challenge.

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Three Ways Data Improves Healthcare
Revenue Cycle Management
3: Improve Discharged-Not-Final-Billed Efforts
Thibodaux Regional Medical Center
invested in analytics and resources targeted
at improving its DNFB rates.
The health system deployed a DNFB
analytics application on top of the analytics
platform (DOS) to leverage the clinical,
financial, operation, claims, and other
data aggregated in the analytics platform.

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Three Ways Data Improves Healthcare
Revenue Cycle Management
3: Improve Discharged-Not-Final-Billed Efforts
The analytics applications enabled quick and
easy access to the information Thibodaux
Regional needed to effectively manage its
DNFB efforts and create a more efficient
workflow process for coders and physicians.
Two years after the organization launched its
initial DNFB improvement effort, it has achieved
$1 million in additional annual reimbursement
and a 66.7 percent relative reduction in DNFB
dollars, significantly improving cash flow.

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Data and Analytics Reveal Critical Revenue
Cycle Management Opportunities
Revenue cycle management today must navigate
mounting organizational complexity while
maintaining financial health through emergency
situations, such as COVID-19.
Health systems can meet these demands with
robust analytics that help them identify
opportunities to improve the revue stream and
data-informed strategies to sustain improvements
as organizations grow and challenges emerge.

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For more information:
“This book is a fantastic piece of work”
– Robert Lindeman MD, FAAP, Chief Physician Quality Officer

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More about this topic
Link to original article for a more in-depth discussion.
The Healthcare Revenue Cycle: How to Optimize Performance
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Other Clinical Quality Improvement Resources
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