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Top 5 Ways to Supercharge Your Claims Analysis Capabilities

by Amanda Brown, MHA

Supercharging claims analysis capabilities empowers healthcare organizations to zero in on opportunities to improve care and reduce costs. The most successful organizations typically elevate their performance under value-based contracts by using claims analysis to drive engagement and improvement. Achieving next-level claims analysis status requires a multifaceted approach.

To gain the most value from claims analysis, hospitals and physician practices need the tools and skillsets to spot both high-level trends and specific details, identifying cost drivers, top performers, and opportunities for improvement. They also require the ability to track performance against payer-specific metrics, to benchmark their performance on metrics against similar organizations, and to create customized and actionable reports for individual service lines, practices, and physicians.

There are five ways hospitals and physician practices can supercharge their claims analysis capabilities to elevate performance under value-based contracts.

  1. Focus on uncovering top cost drivers. Identifying areas for cost reduction was one of the top two business objectives for healthcare leaders in 2018, eclipsed only by the need to more effectively measure improvement in care quality, according to a recent survey of healthcare professionals, 30 percent of whom were C-suite leaders. Use claims analysis to uncover top drivers of cost for specific populations, homing in on costs of care by type of service, place of service, DRG/CPT, and attending/operating physician as well as readmissions by hospital, provider, and type. Comparing the results to both internal (peers) and external (industry) benchmarks also can help create the burning platform for change and establish a basis for engaging physicians in improvement.
  2. Improve the ability to reconcile back to payer reports for value-based payment contracts. One reason providers struggle under value-based contracts is because they lack the ability to integrate payer reconciliation summaries into their systems so they can drill down into performance in meaningful ways. The key is to integrate the data in a way that can be scrubbed, standardized, and extracted into organization-specific reports and dashboards. This enables the organization to engage physicians in value-based initiatives by linking incentive payments to metrics used in pay-for-performance contracts.
  3. Use the data to produce risk-adjusted performance reports. Using claims analysis to segment populations by risk category enables hospitals and physician practices to measure performance by adjusting for risk. It also provides the ability to identify high-cost and high-risk beneficiaries for care management initiatives. Performance reports should be created by practice, provider, patient, setting, and—if applicable—episode of care. When organizations create physician-specific risk-adjusted performance reports, they are better positioned to effectively engage physicians around performance improvement because risk has already been taken into account.

Claims analysis can also give organizations a better understanding of the level of risk they face. Consider that Medicare Advantage uses hierarchical condition category (HCC) scores to determine reimbursement, with payments linked to the individual risk profiles for members in the plan. A closer look at HCC scores could help identify where to focus care management efforts for improved health and health outcomes. Such an analysis also enables organizations to compare costs within their population more fairly.

  1. Know when a value-based opportunity isn’t the right opportunity for your organization. Discussions around population health typically center on the need to increase in-network utilization, develop a preferred skilled nursing facility network, reduce emergency department utilization, and more. While all of these goals have the potential to increase value, claims analysis will help your organization identify the right areas of focus for your organization. With this analysis in hand, healthcare leaders should then go beyond the data to consider:
  • Does the opportunity align with the organization’s strategic goals?
  • Is the level of physician engagement in this area strong enough to support an initiative in this area?
  • Does your organization have a physician champion who can help lead efforts to standardize care processes, if needed?
  1. Ensure opportunities are acted upon quickly. It’s one thing to disseminate customized reports. It’s another to make sure rapid action is taken. Consider appointing a physician champion or other clinical leader to both talk with physicians and service line leaders about the need for change and provide the follow-up needed to ensure action. Use of a clinically-oriented champion to explain the analysis and drive the message home creates the level of credibility needed to have meaningful discussions with key stakeholders around performance. It also sets the expectation for behavior change from a respected peer.

Gaining Greater Value from Claims Analysis

When it comes to claims analysis, a provider must be nimble at drilling down into the data and disseminating it to key stakeholders. The reports generated should be highly customizable to drive the greatest impact. Taking the time to evaluate and shore up your claims analysis capabilities in an era of value is critical to making a difference in health outcomes, operational efficiency and costs of care.