Recently I got a call from a customer who was trying to explain a drop in revenue for one of his sites. Pharmacy production, patient census and even the payer mix seemed to stay fairly constant. Yet, the billed revenue for the month was lower than expected. After reviewing all of the normal areas (did we confirm all of our tickets, what was the change in the unbilled, number of billable days in the month, etc.), it was determined that they needed to dig a little deeper and they needed Rock-Pond to help them pull the information out of their system.
Let me tell you what we found and then I’ll tell you what we learned. We found that the payer mix and the specific drugs dispensed within a therapy and payer type caused a significant, unexpected drop in the revenue. The therapy was IVIG and the payor type was Blue Cross. Although the number of IVIG patients and the number of days on service did not change significantly, a couple of patients with higher priced drugs who had better paying Blue Cross plans were discharged and replaced with a couple of other patients, also Blue Cross, but with very poor reimbursement and with physician orders for drugs that had a much lower AWP.
When we were able to finally see the patient data side by side grouped by billing month within payer within payer type, it was clear that not only do some of our Blue Cross Payers pay better than others, but the variations at the drug level were very significant. Put those together where both the drug and the payer reimbursement go down at the same time and it’s the perfect storm.
The lesson here is that you need to be able to look at your business from many different directions in order to truly see what is going on. Just being able to analyze revenue by payer type or therapy type isn’t good enough. If you can’t go to the drug level and the individual plan within payer, you are not going to be able to fully understand your business. Finally, analyzing “what happenned” is not good enough either. Once you learn what payer plans and drugs are going to be losers you must turn that into proactive policy at the time the patient is accepted. Often a call to a physician indicating that you are not going to be able to accept the patient with their insurance plan / drug order will end up with a therapeutically equivalent order that you can afford to accept. Let’s face it, if the health care providers go out of business, nobody wins.
Find out what Rock-Pond Solutions can do for your organization. Click on the link below, or call 501-450-6446, and one of our representatives will follow up with you to schedule a demo of our reporting solutions.