News: Largest mid-cycle revenue loss linked to inadequate documentation, according to new report

The largest source of estimated revenue loss in the healthcare mid-cycle in 2016 was attributed to inadequate documentation, according to a report by the Advisory Board. The report analyzed a range of hospitals in varying size, from 0–500 beds, to determine the impact of mid-cycle functions, Revenue Cycle Advisor reported.

The revenue loss reported for an average 250-bed hospital was $2–$5.5 million.

The mid-cycle, which is the middle of the revenue cycle, encompasses functions from patient access to the business office. This includes documentation, coding, clinical documentation improvement, and compliance.

Factors contributing to revenue loss in the mid-cycle included the expansion of audits ($1.7—$3.3 million) and coding inefficiencies ($1–$2.5 million). That’s an average of $4.7–$11.3 million in estimated 2016 revenue loss for the average 250-bed hospital.

The report recommends monitoring mid-cycle performance by finding the weakness areas, considering the big picture, and understanding the relationship between quality and reimbursement, Revenue Cycle Advisor reported.

The percentage of Medicare payments tied to quality is steadily increasing, with 80% in 2015, 85% in 2016, and an estimated 90% by 2018, according to the report. 

Editor’s note: This article originally appeared in Revenue Cycle Advisor. To read the entire report from the Advisory Board, click here.