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Ready to make the next step in your journey? Join the 400+ financial professionals of the revenue integrity movement.

Craneware invites you to join the movement to prevent revenue leakage. Problems with pricing, charging, coding and other business processes can result in loss of legitimate reimbursement. By joining the movement, you’ll have opportunities to learn about solutions to these challenges and to share thoughts with your peers.

Movement members can also elect to receive a free welcome packet with desktop Revenue Leakage sign and an exclusive paper, The Top 5 Sources of Hospital Revenue Leakage. So why not join the movement today?

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Welcome to the Journey to Revenue Integrity blog.

The Revenue Integrity blog is the place to go for discussions related to the many facets of preventing revenue leakage. Here, Craneware experts share their thoughts and report on industry trends… and encourage you join the conversation with your own unique experiences and opinions. Craneware client or not, there's something for everyone to learn and discuss.

Pharmacy’s Contribution to the Bottom Line

by Craneware20. November 2014 14:02

Some interesting new developments are happening in the pharmacy space. If you need a fresh reason to dialog with your pharmacy department, read on.

It has long been true that constant regulatory changes and rising drug costs make it difficult for hospitals to receive a proper margin and reimbursement for the pharmaceuticals purchased and administered.

Yet pharmacy accounts for as much as 10 percent of an average hospital’s total budget, making it vital for hospitals to proactively reconcile purchasing and charge data.

Starting October 1, 2014, Genentech changed its distribution model for the drugs Avastin (Bevacizumab), Herceptin (Trastuzumab), and Rituxan (Rituximab). Now these drugs are available only through authorized specialty distributors for hospitals and clinics and not through the traditional wholesalers, which are commonly used, and that have either GPO discounts applied or 340B pricing. There are only 6 specialty distributors authorized by Genentech. This is a trend to watch as other manufacturers may follow this action.

It is important to reach out to your Pharmacy team to understand the impacts to drug procurement, pricing and chargemaster maintenance, as well as the impacts to the formulary from changing distribution models that require purchasing only from authorized distributors without the traditional wholesaler or GPO relationships.

Ensure that rising drug acquisition costs and subsequent pricing policies are reviewed frequently to remain price-defensible. Budget reviews and pricing strategies should take into consideration the future effect of changes if this distribution model should become the norm rather than an outlier. It is also important to recognize that the delivery frequency from these distributors is likely more challenging than the regular deliveries from the wholesalers, so stock levels and scheduling may be impacted.

Craneware’s client, Effingham Hospital, was featured in Healthcare Finance News to discuss the increasing role of pharmacy in the revenue cycle and how decisions taking place in pharmacy can have a significant impact on the financial health of the entire hospital. In the article, “Hospital Pharmacies Aid Revenue Cycle,” Effingham Manager of Pharmacy Operations, Dustin Logan, shared how the hospital achieved $194,000 in savings by leveraging a greater awareness of pharmacy.

“We can also save the hospital money by looking at revenue generated relative to the cost of medications,” said Logan. “Streamlining the formulary by cost and income brings it into better focus. Managing the formulary efficiently, along with billing help, means the pharmacy makes a contribution to the hospital’s bottom line.”

What best practices does your organization have in place to ensure that administered medications are accurately coded, billed and reimbursed at an optimal level? 


Without Margin, How Sustainable is Mission?

by Craneware12. November 2014 10:32

To serve communities with emergency and service lines is only sustainable with profitable care. Margin provides for maintaining quality health systems, providers and staff. So, margin must be managed and defended. To do this requires looking at the right information, at the right time.

What is the logical control point for gaining clarity and accountability across clinical and financial aspects of care?

Hint: This vantage point for clarity is found in the point where clinical and financial data merge.

Remember, the charge shows clinical information that spans diagnosis to procedure, inpatient or outpatient, and whether drugs, tests, surgery or other interventions were required. This makes the chargemaster the logical control point for gaining clarity and actionable information to manage across the clinical and financial aspects of care.

The viewpoint from the chargemaster is the key to accountability for effective, profitable strategic management. Every hospital has a chargemaster (CDM) – whether it is actively managed or not.

A well-managed chargemaster enables validation of clinical and financial information to ensure that it is current, correct and complete. This validation is important since an error submitted in a claim to a payer causes all kinds of additional headaches. These added burdens range from costly denials, to audit management and even legal battles about payment and compliance.

Also, even across silos, collaboration and communication can happen readily around the process of ensuring that bills are correct by way of validating that information is current via the chargemaster.

Why would a hospital not want to validate that their information is current, complete and accurate?

Ensuring accuracy in procedural data is vital to both the quality drive and to correct billing for all services provided. The charge is central to this, and with bundled payment the charges become the basis for measuring cost-per-patient and cost-per-patient-type. To disperse payments to the range of providers in a risk-sharing organization, accurate charging is vital to be able to pinpoint each party’s portion of care.

As the main source for the valuable procedural data with the checks and balances that an affordable healthcare system requires, the charge-level of procedural data is the best vantage point.  From this viewpoint, managers can ensure accuracy is maintained, understood, and analyzed – across the health system, and its disparate systems that include the electronic health record. This is vital in order that clinicians can make real improvements to quality of care and that healthcare may be sustainable in the highest and best form.

What are your views on ensuring accuracy across diverse departments and in electronic records? We’d love to hear more from you.

Read more in Brian Workinger’s article Front-Line Perspectives on Price Transparency and Estimationin the September issue of hfm. And, on the HFMA blog. Follow Brian on Twitter @RIJourney.

Does this Charge Make My Price Look Big? Check Your Reflection in Public Views of Your Data. See What Your Patients, Markets, Payors & Auditors View Today.

by Craneware6. November 2014 11:40

Read on for the latest reflections on pricing…

Pricing directly affects your bottom line. Yet shockingly, many hospitals only manage pricing annually. 

You may ask, “How is it possible that pricing, which is obviously a public priority, can remain neglected as a priority within healthcare organizations?” “Especially in today’s market,” you might add. 

Do hospitals realize that consumers in their own neighborhood are now looking at their raw charge data exposed on the web?

2014 Medicare charge data by specific inpatient and outpatient hospitals is publicly available on the CMS website here:

Have you peeked at your organization’s data? It is the same raw data that consumers are searching to determine who will perform their pending hip replacements, usually without the benefit of much knowledge on how healthcare actually gets paid or your quality factors.

How effective do you think consumers’ choices will be in making life-changing surgery decisions based on this raw charge data out on the Internet? Do you want to help them to make their best choice? Who do you think they’ll blame for the raw data they see and related surgery choices they make?

One thing is certain; it won’t be CMS or any other insurance payor answering your hospital’s phone to discuss a patient’s confusion about raw data they saw on the web. Even if a patient has had a resounding surgery success in every other way, when they get their bill, their financial experience of healthcare is often the aspect that leaves the final and lasting impression of their surgery experience.

If prices are not managed in a defensible manner, or if charges are not even being properly maintained for accuracy, do you think there will be dissatisfaction with the financial aspect of your patient care? How will this impact the long term financial welfare of your hospital?

Consider this example of the confusion being caused by raw charge data now published on the web:

  • Suppose two different hospitals both charge $5,000. for a certain DRG.
  • A consumer may think $5,000. is their cost. Yet, in fact it is the various health plans’ unique contractual agreements with the separate hospitals that define what each hospital’s actual payment will be & whether a patient will pay more or less at each hospital.
  • Plus, today, hospitals are contractually disallowed from sharing their payor contracts’ negotiated rates with the public.

Can you see how there is definite value available from looking into how your organization’s pricing and charging measure up as well as how your payer contracts impact pricing?

What does bundling payment mean to your bottom line? It definitely adds another layer of complexity into how often hospitals need to calculate reimbursement so that they can price competitively.

Staying fiscally fit with ongoing alignment of pricing for defensibility & transparency is emerging as a top priority for hospitals. Pricing strategy and charge controls are needed to compete in your markets & avoid misinterpretations of publicly available charge data that can cause big issues for healthcare organizations’ relationships & financial results.

Have you seen your organization’s pricing published on the web? What are your feelings about the experience? How often do you think your organization updates its pricing and checks its reflection with its key external audiences? We’d love to hear from you.



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