Today’s healthcare reform policies have created tremendous financial analysis and productivity performance needs for healthcare organizations. Traditionally, business intelligence (BI) tools were developed to help organizations analyze and improve performance within their four walls. But changes in the healthcare industry have created an increasingly confusing marketplace that has shifted the demands toward peer-to-peer benchmarking.

Comparative analytics enables organizations to benchmark their reimbursement, utilization and productivity performance against their peers using real-time data rather than relying on older, published information that does not reflect current industry trends. Businesses can gain insight into a number of areas that impact their performance and identify potential problems, such as:

  • Am I an outlier for a RAC (recovery audit contactors) audit?
  • Why am I being denied more on my top 10 procedures?
  • Why is my staff processing time twice as high?
  • How does my code utilization in my specialty compare?
  • Why does my top payer reimburse me 10 days slower?

The value behind comparative analytics is simple: If you can’t measure it, you can’t manage it.

Perhaps the most significant change in the healthcare industry is reform legislation, which has significantly altered the healthcare landscape for service providers. Among the many changes it has sparked is a nationwide crackdown on Medicare fraud, making it a key priority for RAC auditors to analyze comparative billing data to identify physician outliers among their peer groups. The Centers for Medicare and Medicaid (CMS) is also initiating more extensive medical necessity reviews to ensure that providers are coding evaluations and management (E&M) services accurately.

Since 2011, more than $200 million in overpayments were recovered by RAC audits, a component of the Tax Relief and Healthcare Act that identifies improper Medicare payments, including overpayments and underpayments. As a result of this program, there has been a marked increase in the number of audits conducted among Medicare service providers, such as hospitals, medical equipment companies and physician practices.

With the extraordinary challenges brought about by healthcare reform, healthcare service providers must look beyond analyzing proprietary data in order to meet government mandates, minimize the risk of denials and avoid penalties. RAC audits can wreak havoc for providers and practitioners, most of whom don’t even realize they are labeled outliers. To a business that may be an outlier because of excessive claim utilization, the cost of an audit can mean considerable loss of time, money and resources in preparing for one. In worst cases, businesses have been forced to close because they have exhausted their resources as a result of the process.

The good news is peer-to-peer comparative analytics provides clarity, transparency and focus into claims data that until recently has been the sole purview of government agencies and RAC auditors. More and more, medical billing companies and physician practices are turning to comparative analytics to help prepare for government audits, provide real-time transparency into claims and billing processes, and benchmark their performance against their peers, either locally or across the country.

Business productivity is another key focus of comparative analytics. It helps businesses uncover internal areas of excellence as well as those that are problematic and may need to adopt more useful practices and procedures. For example, it provides insight into the time it takes a practice to submit a claim and the impact on cash flow, as well as claims denial rates, reasons for denials and how this compares to a peer group.

Comparative analytics continues to evolve through increasingly sophisticated analysis of claims data. Most importantly, it will continue to remain an integral tool for organizations to collect, measure and manage key internal business metrics, compare against peer data to gain meaningful performance insights and help healthcare providers focus more on their core responsibility of patient care.

About the Author

Michael Sanderson is president of RemitDATA.For more on RemitDATA:

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