The DFW Hospital Council is posting blogs submitted by our Associate Members. The following was provided by KPN Health. For guidelines, please contact Chris Wilson at chrisw@dfwhc.org.

By Brandy Killion, SVP, Clinical Performance, KPN Health, Inc.

Healthcare in the U.S. is plunging toward another year of uncertainty, revenue compression and ever-increasing mandates for quality measurement. Hospitals have become increasingly focused on striking the balance between maximizing revenue streams and maximizing the quality of care as they continue on the path from Fee-for-Service to Value-Based payments.

Healthcare organizations operating in risk-adjusted environments must ensure they are properly compensated for the appropriate care of their patients. Incomplete, inaccurate and missing codes from patient encounters have long been a focus in revenue cycle management.

What about the negative revenue impact from missing and undiscovered diagnoses? These are areas that directly affect risk scores and risk score improvement is quickly becoming a key component of revenue optimization.

Revenue optimization in hospitals can be driven through many initiatives such as using a defined set of precise analytics, using disciplined standards and optimizing risk. Maximizing revenue streams is only done in a scalable way by applying standardization and focusing on appropriate clinical and financial quality measures that improve risk and subsequently improve reimbursement from relevant payers.

Specifically, the hospital must understand the potential risk score gain available, beginning at the patient level, that can be achieved in order to negotiate increased reimbursements. At the patient level, this begins by identifying missing conditions and erroneous coding which contribute to the current score and which, if properly addressed, will improve the patient’s risk adjusted score.

Every organization will be at different stages (listed below) in their journey; Risk Factor adjustment starts to have significant impact in stages 5, 6 and 7. Volume is impacted by becoming the preferred provider for various procedures. As the organization proves its ability to affect risk adjusted factors, it may begin to leverage that ability in its reimbursement rates. Stage 7 shows the organization maximizing all the pieces affecting the Risk Factors and capitalizing on that capability.

1. Standardize Clinical Quality Metrics across the organization to align with Payers;

2. Measure and Evaluate Population to properly identify clinical and non-clinical factors affecting measure compliance and adherence;

3. Refine and Expand the program in a continuous improvement process;

4. Incentivize all influencers to ensure program adherence;

5. Drive Volume through improved Quality and Ranking vs other providers;

6. Leverage Risk —ultimate goal— allows for negotiation with payers on bundled payments, increased reimbursement rates, and other full risk revenue models such as Oncology Medical Home, PMPM capitated payments, lump sum payments, etc.);

7. Maximize Risk … RAF score improvement process to maximize reimbursements.

A combination of technologies must be applied to: (i) aggregate patient data across the system; (ii) continually update the analysis of conditions at the patient, provider, location and plan level to identify and quantify opportunities for risk score improvement; and (iii) provide information at the point of care so providers can act on the findings.

Subsequent enhanced reimbursements follow as the organization leverages its ability to quantify and achieve the improvements in risk scores. Provider level, actionable information regarding patient conditions and recommendations for improvement are then required to achieve results.

For more information, please contact Jennifer Johnston, communications specialist, at 214-593-6990 or jennifer.johnston@kpnmp.com.