Enhancing the Revenue Cycle Through Streamlined Physician Advisor Programs

Developing an internal physician advisor program enhances healthcare mission and clarifies financial stewardship.

Editor’s note: The following authors contributed to this article: Siddharth Raghavan, MD, FACP, CHCQM-PHYADV, System Director, Physician Advisor Service at Sutter Health and Ronald L. Fong, MD, MPH, MBA, Physician Advisor at Mercy General Hospital. Contact them at Siddharth.Raghavan2@sutterhealth.org and Ron.Fong@commonspirit.org.

A surefire way to enhance your revenue cycle operations is through developing an internal physician advisor program. Doing so enhances an organization’s healthcare mission and clarifies financial stewardship. There are compelling cases for healthcare systems to invest in an internal physician advisor. For example, a previous study calculated physician advisor interactions approached $2 million in annual savings from audit reductions, decreased billing errors, and reimbursement loss in reviewing chronic obstructive pulmonary disease MS-DRGs for a 250-bed hospital.  Accurate capture of patient placement has also shown a 50% reduction of commercial insurance denials.

Physician advisors can also reduce costs associated with compliance and regulations. In 2017, the AHA reported $39 billion per year cost for quality reporting requirements with an average-sized community hospital cost of $7.6 million per year to support compliance efforts with federal regulations. The physician advisor mediates the balance between revenue integrity and audit risk through patient placement reviews and analysis of quarterly CMS PEPPER findings to determine risk for improper payments based on practice patterns.  

The decision to hire a physician advisor yields benefits beyond financial ones. Outsourcing physician advisor work to external entities may limit the potential value of this integral role. In the care continuum, internal physician advisors work with clinicians, care coordinators, and social workers to achieve successful outcomes through the alignment of working relationships with the execution of vision.

Departmental structure and role development

Internal physician advisor structuring needs to align with organizational needs. The hiring of a physician advisor onto the medical or administrative staff is preferred for single hospital institutions for several reasons. First, the formal recognition of the physician advisor as a physician colleague and integral component of the care team is critical to their future success. Second, electing the physician advisor as a voting member of the utilization review committee promotes adherence to CMS’ Conditions of Participation. Finally, a direct line to the CMO will increase visibility and support the physician advisor as a valued physician leader in delivering patient centric, cost-effective care.

Multi-hospital organizations seeking to centralize and standardize clinical operations may elect for an enterprise level physician advisor program. This can be accomplished by partnering with key stakeholders, including utilization management, CDI, and physician leadership to determine the appropriate model for implementation. Scope of the anticipated physician advisor role should also be clearly delineated to assure commensurate influence and authority, as opportunities abound for physician advisors to scale up valuable skills over time. A robust physician advisor training program and sound on-boarding process will yield returns beyond expected for the role. 

Creating a staffing model

The staffing of an internal physician advisor program may depend on the existence of external vendors to perform daily physician advisor functions. Annual costs to outsource this work run into millions; most efficient internal physician advisor programs can operate at a fraction of this, based exclusively on cost savings per review performed. Without existing physician advisor resources, decision-makers should attend to budgetary constraints and opportunity costs as a basis for physician advisor staffing. There is no standard methodology to determine physician advisor staffing; however, commonly used methodologies include: FTEs per hospital bed, anticipated scope, or expected number of secondary reviews.

While staffing based on hospital bed count is straightforward, defining physician advisor job duties that guide a balanced workload can be challenging prior to formal role development. If the latter is the preferred method of hiring, it is important to include a significant “non-productivity factor” (30%­–50%) for the staffing of on-site physician advisor positions involved in physician education, complex care rounds, and patient throughput activities. In contrast, remote physician advisors generally require a lower “non-productivity factor” (10%), being heavily weighted toward review-based work. A hybrid team of on-site and remote physician advisors interspersed throughout all operating units will be well positioned to take on a host of revenue cycle responsibilities.

Measuring effectiveness

Upon establishing the basic tenets of an internal physician advisor program, standard workflows should be aligned around operational KPIs. This will facilitate physician advisor performance accountability and ensure proper patient placement status critical to hospital billing outcomes. Key elements to consider are: existing platform capabilities, ease of physician advisor interactions, extraction of data, and ability to interface with payers. Concurrent utilization review, peer-to-peer discussions, MS-DRG validation reviews, and clinical appeals workflows can be standardized with far-reaching impacts on hospital reimbursement even in year-one of implementation.

Equally important is the objective value by which internal physician advisor programs are measured–revenue recovery and cost savings–to support an adequate ROI in relation to the cost to deploy or insource such a program. While there may be areas of uncertainty in quantifying this work, it is a crucial step in justifying the existence or expansion of an internal physician advisor service. Direct savings or hard revenue may be attributed to the physician advisor based on reduced labor expenses, inpatient authorization, Code 44 claims, Medicare part A billing, and overturned payer denials. While difficult to measure, indirect savings or “soft revenue” may also be realized through CDI efforts, excess or avoidable day reduction, decreased observation hours, and efficient bed utilization. Altogether, the potential outcomes are improved incremental revenue capture, lower avoidable write-offs, and reduced dollars at-risk. 

Summary

Well executed internal physician advisor programs can yield a significant ROI and offer a layer of regulatory oversight that is often overlooked by external vendors. The roadmap to implementation may vary yet it is vital to consider the potential physician advisor impact on multiple lines of business and revenue streams. Just as importantly, internal physician advisors can seamlessly integrate into existing cross-functional care teams by serving as an unbiased sounding board for physicians and case managers alike. Instilling this spirit of collaboration early in the inception of an internal physician advisor program will assist in breaking down departmental silos and magnify desired outcomes–appropriate resource utilization, revenue integrity, and recoupment of denied or at-risk dollars–in pursuit of effective, efficient patient care practices. 

Care to share your view? HealthLeaders accepts original thought leadership articles from healthcare industry leaders in active executive roles at payer and provider organizations. These may include case studies, research, and guest editorials. We neither accept payment nor offer compensation for contributed content. Send questions and submissions to Erika Randall, content manager, erandall@healthleadersmedia.com.