Knowledge is power when it comes to effectively operating an anesthesiology group in today’s healthcare environment. Overcoming the challenges of new competition and reimbursement complexities while meeting the demands of evolving hospital relationships requires insight that only strong practice management reporting can provide.

McKesson Business Performance Service’s practice management reporting system extracts information from billing data to equip anesthesia groups with actionable, up-to-date practice information, measures and trends can that impact the group’s revenue cycle. Monthly reports, daily dashboards and deep-dive, real-time analysis help practices identify and respond quickly to revenue cycle problems. Reporting also illuminates long-term trends and enables performance benchmarking against peer organizations.

Practice management reporting has become particularly useful for accomplishing tasks in three important operational areas as value-based reimbursement gains traction. These areas include accounts receivable management (AR), hospital subsidy validation, and quality and process performance.

1. Watching the cash

In simplest terms, AR reports help practice leaders understand how efficiently the organization is converting clinical services to cash. AR reporting can reveal a wealth of details about past and present financial performance and thus bring future trends into focus.

An excellent starting point for tracking AR performance is a monthly executive summary report. Core elements of an AR executive summary typically include the following data points for each of the most recent 12 months:

  • Volume (in both cases and units)
  • Charges (including contractual adjustments)
  • Collection Rates (both gross and net)
  • AR Metrics (Total AR, Days in AR, % AR>90 or 120 days)
  • Credit Balances
  • Bad Debt Percentage

Not unlike the vital signs of the human body, these indicators create a snapshot of the overall financial health of the organization. By monitoring month-over-month numbers and moving averages, both positive and negative trends can be quickly identified.

Additional metrics allow for deeper analysis if significant anomalies or variances crop up in any financial category. Other measures that may be used to isolate AR performance issues include:

  • Payer Mix Trends by Quarter (charges, cases and/or units)
  • Payer Mix Statistics (provides payer-specific executive summary metrics)
  • Accounts Receivable Aging by Payer
  • Monthly Collection Statistics (payments linked to originating charges)
  • Denial Management Reports (including denial cause and disposition)
  • Clean Claims Reports
  • Charge Lag (days from date-of-service to billing staff and claims submission)
  • Pending Case Reports (aging with cause of pending status)
  • Benchmarking (quick comparisons of group performance against industry norms or other defined objectives)
2. Securing the subsidy

Over the past 20-plus years, declining anesthesia reimbursements (with RBRVS at the root), competitive pressure from ambulatory surgery centers (ASCs) that has pulled cases from hospital ORs, and the anesthesia manpower shortage of the early 2000s resulted in the majority of hospitals paying annual subsidies to their affiliated anesthesia groups. Typically, the hospital’s objective is to ensure consistent operating room coverage by helping practices offer compensation levels that will attract and retain qualified anesthesia providers.

Growing consolidation and the emergence of national anesthesia management companies, however, have heightened competition for hospitals’ anesthesiology contracts. As a result, highly subsidized groups are increasingly seen as vulnerable to lower-cost providers. A recent survey of hospital C-suite executives conducted by Enhance Healthcare Consulting, LLC, found that 49% of respondents have actively sought an alternative to their current anesthesia provider in the last three years, and 25% have changed anesthesia providers. Notably, 40% of those surveyed listed subsidy levels as the reason for seeking a new provider.1

In the face of these mounting competitive threats, it is important for practices to demonstrate to hospital partners that they’re performing at an optimal financial level. Establishing appropriate subsidies and justifying them over time requires groups to share detailed financial and operational information. Below are some of the key questions hospitals may have regarding subsidy validation that effective reporting can answer:

  • Is the billing operation optimizing collections for services rendered?
  • Are collections-per-unit and units-per-case on par with the market?
  • Are contracted managed care rates at market levels?
  • Are payer reimbursements in accordance with managed care contract terms?
  • What is the payer mix and average reimbursement per unit?
  • Does the practice have an effective denial management and remediation process?

Proactively addressing these questions to demonstrate capable revenue cycle management helps practices alleviate hospital concerns surrounding subsidies and strengthens ongoing working relationships.

3. Quality control and process improvement

Beyond offering new insight into financial issues, practice management reporting also provides the ideal platform for tracking quality performance, a cornerstone of value-based reimbursement. Consistent monitoring of clinical measurements, such as reintubation, mean temperature, PONV and unplanned ICU admission, allows groups to demonstrate qualitative superiority to their hospital partners.

Additionally, careful analysis of anesthesia services and related operating room performance puts groups in a position to play a more active role in care management. For example, illuminating issues beyond the practice’s control, such as OR utilization or payer mix by volume, provides opportunities for process improvement to enhance scheduling, boost OR throughput and reduce anesthesia provider downtime.

More broadly, effective data analysis allows anesthesiology groups to expand their clinical and administrative roles within the hospital setting and strengthen hospital partnerships. From managing perioperative care to assessing the utilization of medical equipment, supplies and medications, groups equipped with strong data are well-equipped to make themselves virtually indispensable along the care continuum.

Today’s complex, interconnected healthcare environment demands unprecedented engagement and cooperation between and among provider entities. By using practice management reporting to develop operational and clinical insight, anesthesia practices can adapt to sustain their organization through uncertain and changing times.

McKesson Business Performance Services for Anesthesia provides comprehensive revenue cycle management, including customized business intelligence reporting, to help anesthesiology groups optimize financial performance, reduce operational costs, mitigate risk of non-compliance, and transition to value-based care To learn more about this powerful tool via webex or for an onsite demonstration, please contact David Platt.

1“Going Under: An Inside Look Into How & Why Hospitals Seek New Anesthesia Providers,” Survey conducted by Enhance Healthcare Consulting LLC,  http://enhancehc.com/wp-content/uploads/2016/04/SurveyResults-FINAL-04122016.pdf

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Dave Platt

About the author

Dave Platt
Specialty Vice President, Anesthesia
McKesson Business Performance Service