Hitting plan: Target revenue reconciliation to plan and meet metrics

When actual revenue doesn’t match up with planned revenue, an organization can have a major problem on its hands if it’s not able to spring into action to solve it. Regular revenue reconciliation is key to ensuring revenue is on track and is one of the foundational functions of revenue integrity. Using revenue reports to create tailored metrics and then monitoring with revenue reconciliation will keep an organization on track and ensure that it’s able to plan for the correct amount of revenue.

Each organization needs to tweak the process to suit its operations. At Lexington Medical Center in West Columbia, South Carolina, revenue integrity has tackled revenue reconciliation several different ways, Jennifer Hayes, MHA, CHFP, director of revenue cycle integrity, says.

When Lexington Medical Center went live with EPIC inpatient/hospital-based in 2013, it implemented a daily revenue tracker. This was a retrospective process that involved analyzing reports to calculate and review daily revenue and set metrics.

As the Epic go-live process wound down, Lexington Medical Center opted to run the reports on the hospital side on a weekly basis. “From a hospital-based perspective, it allows you to know where your big dips are,” Hayes says. “It’s really just trying to figure out what the average revenue targets should be in departments or locations, and then trying to troubleshoot and resolve the issue around over- or understated revenue.”

From a revenue integrity standpoint, dips in expected revenue can be caused by a myriad of issues. In some cases, revenue might rise above the baseline. An investigation by revenue integrity might tie that bump to the expansion of a service line. Alternatively, a plunge in revenue could be related to errors entering manual charges or a system issue that causes claims to get unexpectedly backed up in work queues.

Hayes and her team are also responsible for overseeing revenue metrics for the physician-based revenue cycle. Lexington Medical Center went live with EPIC ambulatory/physician-based in 2017. When looking at physician revenue reconciliation, account for those factors specific to physician settings. That might mean continuing to run daily reports for a longer period of time to catch all the variables. An example of this is seasonal changes. “Maybe spring break is a time when your revenue is going to be down,” Hayes says. “It is important to understand when a decrease in revenue is expected. Another example is if a practice has acquired a new physician. This could mean an influx of revenue which again is important to understand why revenue would be seen as an increase.”  

For both the hospital and physician settings, revenue reconciliation is about setting baselines. At the beginning of the project, revenue reconciliation will help revenue integrity nail down a facility’s specific charge scenarios and work out system bugs. Specific problem areas can be monitored more frequently until kinks in the process are ironed out.

Surgery is an area that’s put under the microscope at many organizations, Hayes says. While reviewing revenue reports for surgery, revenue integrity might notice a drop with actual revenue not meeting the baseline for that area. In that situation, one of the first steps is to review the surgery logs. At Lexington Medical Center, quality assurance (QA) staff are assigned to review the surgery charts or accounts to ensure that all required clinical data and documentation is included before the charts are released.

“If they’re behind, then that skews the data which then skews the revenue because they have to release their portion for it to pass through to the next step,” Hayes says. “If we research and find that this process is behind then we know this has to be resolved to report an accurate trend for the revenue.”  

However, if QA is caught up on the surgery logs, Hayes will consult with information systems analysts to see if there are any issues in EPIC. Sometimes, an item might be held up and not driven to a work queue which can impact revenue targets. 

“You have to start root cause analysis and figure out where your breakdown could be in your workflow,” Hayes says. “Once we go that fixed things started flowing appropriately.”

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