THE 10 STEP APPROACH TO OPTIMIZING YOUR 2014 REVENUE
A post by Leslie Gold, Director Revenue Optimization Solutions at iVantage Health Analytics
This time of year, no doubt, you’ve made a few resolutions, such as “Be more organized” or “Do a better job of planning ahead”. How about applying those resolutions to the way you manage your revenue? It takes just a few hours early in the year and you’ll prepare your organization to bring in the additional revenue you need to continue serving your community.
As more Medicare patients switch to Medicare Advantage plans, and non-Medicare patients gain coverage through managed Medicaid and Exchange products for the first time, much more of your revenue will be a function of how effectively you can negotiate the best contracts. Now is the time to take control!
I can’t tell you how many times I’ve heard those responsible for contract negotiations make statements like, “We haven’t renegotiated that contract in years”; “We don’t even try to negotiate”; “I’m not sure where the actual contract is or what it says”. Every time I hear those comments, I cringe. As costs rise, government reimbursement shrinks, and more care moves to the lower priced outpatient setting, these statements all represent lost opportunities at a time when hospitals can no longer afford to leave money on the table.
But not anymore. If you get organized and plan ahead, you will be well positioned to optimize the outcome of your contract negotiations.
Below is a 10 step approach that will help you get things started:
- Find every one of your managed care contracts.
- Note the date you last negotiated each contract.
- Quantify the revenue associated with each contract.
- Determine the total revenue and the inpatient, Emergency Room, and outpatient volume for 2013.
- Calculate the average payment per inpatient, Emergency Room, and outpatient case.
- Compare the totals and averages across each contract.
- Expect a few surprises.
- Note the date each contract comes up for renewal; or if that conversation is long overdue, note the date you will reach out to the payer and begin the discussion.
- Look more closely at your rates and terms to understand the reasons for the surprises.
- Set a new revenue goal for each contract, and for the major service lines within that contract. Use both your other contracts and market data as the benchmarks.
- Develop a plan for how to achieve your goals.
- Gain support for your plan from all the affected parties ” your medical staff, the major employers, your Board, and senior leadership.
Get your year off on the right foot. Take charge of your 2014 negotiated revenue and those resolutions will have a lasting impact on your organization.