business intelligence

5 Revenue Cycle KPIs Every CFO Should Track Right Now
March 29, 2024

The shift to value-based care and patient financial responsibility is putting more pressure on providers to focus on the efficiency of their billing processes. Key Performance Indicators (KPIs) will help you both understand the strengths and weaknesses of your business and identify areas for improvement. Here are five KPIs every CFO should be tracking right now to efficiently allocate resources and improve revenue cycle workflows.

  cfo revenue cycle key performance indicators

Total Charge Lag

This KPI is calculated by subtracting the date of service by CPT code and total number of CPT unit of service codes billed from the total number of days from revenue recognition date. It measures your charge capture workflow efficiency and identifies cash delay. Seven days is typically the threshold for performance and anything past thirty days is a major red flag. Holding charges can delay payment and potentially be lost to capture. A high charge lag can be caused by unclear or missing documentation and coding inefficiency. In terms of process improvement, consider reporting your charges by both physician and service. This will give you the ability to identify and close gaps between services delivered and any corresponding backlogs. Also, consider your staff productivity. Regular training or even outsourced coding can improve coding efficiency.

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8 Key Medical Billing KPIs You Should Be Tracking
March 29, 2024

Originally published July 03, 2018

Managing the billing landscape can be challenging for medical practices and other healthcare providers. The transition to value-based care and rising patient responsibility make the management of day-to-day operations even more complex. However, providers that regularly measure the financial health of their practice and ensure their staff is performing at peak efficiency can achieve a wealth of advantages, both financial and operational.

One of the primary methods physician practices should employ to examine and identify the strengths and weaknesses of their revenue cycle is by tracking medical billing performance metrics. These revenue cycle key performance indicators (KPIs) can help providers prioritize resources, recognize drivers of success and guide future operational decisions.

medical billing key performance indicators

Important Revenue Cycle Key Performance Indicators

The HFMA describes revenue cycle KPIs as well-defined metrics that illustrate performance, KPIs aid in highlighting and comparing key quality improvement and value metrics through analysis of real-time data. They enable providers to boost staff productivity, eliminate root causes for poor performance, increase patient satisfaction and promote proactive decision-making.

Are you interested in your own medical practice or billing company’s analytics? Learn more in our ebook, “7 Benefits of Using Healthcare Analytics.”

KPIs utilized by physician practices include net days in account receivable (A/R), percentage of claims denied, insurance A/R over 90 days, denials by procedure code, accuracy of department charge capture, percent of A/R greater than 90 days, late charges as a percentage of total charges, cost to collect and preregistration, insurance verification and service authorization ratesAlthough some provider practices might be overwhelmed by this comprehensive endeavor, starting with a focus on quality and tracking medical billing KPIs that will heavily impact their financial performance is recommended.

To help you get started, we’ve compiled a list of eight medical billing KPIs you should track on a daily, weekly or monthly basis. We’ve also included guidance on how to turn those numbers into actionable insights. 

Daily and Weekly KPIs

  • Cash Receipts: Revenue is the driving force of your business, so money that's collected and deposited should be monitored daily. Cash can't be benchmarked, but you can compare it to a previous period to ensure that cash flow is steady or improving. Keep in mind that this KPI can fluctuate greatly depending on things like the addition of new employees, new services, cancelled appointments and procedures and how quickly patients pay for their medical bills.
  • Charges: This KPI should be monitoredclosely in conjunction with cash receipts. Because charges drive revenue, any fluctuation in charges will cause a fluctuation in cash. Divide total charges by 365 days to calculate your average daily charge amount.
  • Payables: Knowing when your unpaid invoices are due and whether or not your practice has the cash to cover them in a timely manner is critical. The more you can track and improve your payables, the more lenient your vendor credit terms may be, which can save your practice a lot of money. Also, by monitoring this KPI, you can increase accounts payable process transparency and accountability among A/P staff.

Monthly KPIs

Two important healthcare accounts receivable KPIs that track how efficiently you're collecting payments from payers include days in receivables outstanding and receivables outstanding over 120 days. As a best practice, monitor these performance metrics every month to analyze what sources might be slowing your ability to realize revenue.

  • Days in Receivables Outstanding (DRO): This is the average number of days it takes you to collect payments due to your practice. The calculation for DRO is:

DRO

You can certainly determine the average daily charge based on 365 days, but 90 days takes seasonality into account, as well as various fluctuations in business growth. So, how do you know if you're doing well? Here are the industry benchmarks for medical billing DRO:

High Performing Billing Department - 30 days or less

Average Performing Billing Department - 40-50 days

Below Average Performing Billing Department - 60 days or more

If your practice is hitting the below average mark or even the average performing, there are a lot of things you can do to improve your number. Analyze your back-end processes to ensure that you're avoiding duplicate billing, incorrect CPT modifiers, and inaccurate patient information that lead to more claim denials. Consider your patient payment process as well. Are you making it convenient for patients to pay their bills? Tools like an online patient payment portal and payment plans give patients the ability to pay for their medical expenses in a way that works for their budget. And bonus, they improve patient retention too!

  • Receivables Outstanding Over 120 Days: This is a great indicator of whether your patients and insurers are paying you in a timely manner. This KPI will also pinpoint claim denial timeliness issues and effectiveness of follow up on no-response claims. The calculation is:

  receivables outstanding over 120

A realistic number for which to aim is less than 12 percentChoose a category, and stick to it for consistency. You can track this KPI in two ways. The first is by patients who are the new payers in healthcare. This calculation can be affected by eligibility verification, ways patients are paying for their bills and whether or not they have a clear understanding of how their insurance works. As with DRO, you can improve this number by analyzing and improving your patient payment process. The second way to track this medical billing performance metric is by insurer, which allows you to find out if your in-house billing staff or outsourced staff is tracking reimbursement and denials effectively.

  • Denial Rate: Claims denials cost healthcare organizations approximately five percent of their net revenue stream, which doesn’t include the $25 average for managing a denialThe Denial rate KPI tracks the percentage of denied claims and provides insight into how efficiently your claims process is operating. You can calculate your denial rate with the following:

  denial rate

The industry average denial rate is 5-10 percentalthough under five is ideal. To improve your practice’s number, consider how much of your claims management process is manual. You can accelerate your collections performance with claims scrubbing, electronic remittance and auto coding/charge posting.

  • Resolve Rate: This number is a great reflection of the overall effectiveness of your revenue cycle management (RCM) processfrom eligibility to coding and billing. The calculation for resolve rate is:

resolve rate

The higher the percentage, the better. If your rate is high, it means your staff and the processes they follow are working effectively. Conversely, if your rate is low, examine your practice’s eligibility verification, coding, authorizations and credentialing. Providers spend about 71 minutes to rework a claimso low rate impacts both cash flow and staffing costs.

  • Cash Collection as a Percentage of Net Patient Services Revenue: This medical billing performance metric is designed to evaluate a provider’s ability to transfer net patient services revenue to cash. You can develop this KPI with this calculation:

cash collection as percent of net patient services rev

The collection goal should be, at a minimum, 100 percent of the provider’s monthly average net revenue for the preceding three months. When making this calculation, be sure to exclude patient-related settlements and payments, Medicare pass-through and Medicaid Disproportionate Share Hospital (DSH) payments. Also, avoid collecting patient service cash from ambulance services, post-acute services and physician practices and clinics unless they're recognized as a provider-based clinic by Medicare.

A Key Resource for Analyzing KPIs

By tracking KPIs, you have the capability to procure improved reimbursement, faster payment, less time spent on denials and appeals and an overall optimized revenue cycle. In order to be effective, they must be specific, achievable, measurable, actionable and relevant.

Even with guidance on how to improve these KPIs, it’s essential that you have the tools and resources to analyze them. The key is organizing your KPIs into dashboards through a business intelligence reporting and analytics tool. This will not only improve your ability to identify trends and patterns but also increase awareness around what variables impact your practice and enable you to easily share those findings with staff and management.

Receiving medical billing reports on a daily, weekly and monthly basis will enhance your ability to monitor financial performance by leaps and bounds. Keep in mind that these are only outcomes - a report won't improve them for you. Analyze your reports, ask questions, work closely with your billing department and help steer them in the right direction to improve KPIs and the practice as a whole.

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Better Data, Better Decisions. Improving Healthcare with Business Intelligence
March 29, 2024

There’s a ridiculous amount of data flowing through medical practices and billing companies every single day. EMR/EHR data, billing data, cost data, patient data… It’s enough to make your head spin. With the push to value-based care, every health organization is finding the need to transform that data into something that will improve outcomes – from both a patient and organizational level. It’s not just about capturing and managing data anymore, it’s about interpretation. How can you transform data – from management to analysis – into insightful information that will drive process improvement initiatives?

hospital business intelligence software


Business Analytics in Healthcare

Because of the heightened demand for value and transparency, one tool many organizations are beginning to embrace is healthcare analytics, particularly through business and clinical intelligence software. When you give analysts the means to capture and analyze data, you empower them to transform your practice into one with a data-driven, value-based culture. You initiate a chain reaction: Empowering the users, making better decisions as a provider, and improving both business operations and patient outcomes.

Medical billing is hard, that's where we come in.

A little background knowledge is required to fully understand the power of this tool. All data must go through a particular set of stages before an analyst can achieve meaningful analytics:

  1. Data capture – It all begins with the way people and devices produce and capture data, which must be done efficiently (is the data collected in a timely manner?) and accurately (is the data relevant to the analytical needs of the organization?).
  2. Data acquisition – Analysts must collect data from multiple sources throughout the organization to produce meaningful insights. Let’s use the example of an analyst assisting a radiology practice with a quality improvement issue. The analyst will pull information from a number of sources including:
  • RIS – For radiologist interpretations
  • PACS – All picture archives
  • EMR – For clinical notes
  • Clinical Decision Support Systems

As a manual process, it's nearly impossible to pull data into a single location and format while ensuring that all data points are speaking each other (that they’re linked by a common identifier, either patient or provider) without creating errors. As a result, analysts may spend more time collecting data as opposed to transforming data into meaningful analytics. That’s where business intelligence comes in. Tools like ImagineIntelligenceTM allow users to integrate multiple data sources right into the software and under one platform.

3. Data analysis – Once the data is captured and tied together, the analysis process can finally begin. Three important steps in data analysis include:

  • Evaluation – If analysts don’t understand the data they’ve collected, they can’t effectively communicate their findings with their audience (executives, staff, etc.) Analysts should take the time to explore the oddities and trends that could be essential to understanding process improvement or care coordination. If you don’t understand the data, how can you effectively solve problems with it?
  • Interpretation – How will you interpret this information in such a way that all levels of the organization will understand?
  • Presentation – The analyst should tell a story with the data presented. Tying into the interpretation step – how will you organize and present the information in a way that’s engaging and identifies the problem you're solving for?

 

Benefits of Business Intelligence in Healthcare

1. Reduce hospital readmissions – Business Intelligence tools allow you to compare patients who did not need readmission against those who did. Things like age, gender, ethnicity, and follow-up care are all factors taken into consideration by the software. Once the data is collected and organized, you can identify patterns of readmission. Perhaps those patients come from lower social economic groups or live alone.

2. Financial performance improvement – Imagine having the power to track exactly how much your practice is reimbursed for services over time, coupled with the ability to improve that level of reimbursement within the same interoperable software. Business Intelligence systems that integrate with practice and revenue cycle management software and automatically extract and analyze data housed in the platform allow you to predict future trends based on factors like revenue and billing costs.

3. Improve and develop treatment programs – This falls under both care and process improvement. When more information on health and disease is readily available, that insight will allow for both treatment programs to be more quickly adjusted, as well as earlier identification of appropriate treatment. Those benefits trickle down: increased improvement on preventative treatment programs can reduce total cost of care, prevent medical episodes, and increase patient satisfaction.

4. Define major KPIs – Consistent and repeated use of analytics allow you to identify significant areas to business goals. Whether you’re aiming to increase collections, improve readmission rate, or reduce total days in A/R, business intelligence enables you to monitor fluctuations and major changes in your key performance indicators and distinguish areas for improvement.

Utilizing analytics allows you to discover insights that can drive care, process improvement initiatives, and financial stability of your organization. The reality of business intelligence in healthcare is that we’re just beginning to scratch the surface of its capabilities and the possibility behind data-driven, organization-wide improvement. Business analytics in healthcare is an enormously positive step to understanding and improving all facets of your practice.

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Business Intelligence & Analytics
March 29, 2024
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How Medical Billing Companies Use Data Discovery in Business Intelligence (BI)
March 29, 2024

In medical billing, we often talk about the importance of reporting and business intelligence for finding opportunities to reduce cost and increase revenue. Whether you’re a medical billing manager or the owner of a billing company, everyone employed by your company benefits when given access to data and reports related to their job performance. With that in mind, I’d like to take a step back and talk about the process that goes into creating those reports, called data discovery.

medical billing companies business intelligence

What is Data Discovery?

Data discovery is the process of collecting raw data from various sources, consolidating it into a single source, and converting it into useful information in the form of reports and visualizations. The usefulness of information is identified through recurring trends, anomalies, or predictive analytics broken down by factors like region, office, or procedure.

Data discovery can be demanding for medical billing managers when you’re accountable to both your management team and clients. Fortunately, client needs are like management needs in many ways. At a high level, clients want to see a lot of productivity reports and net gross collections, and so do billing companies. They need to know what you’re working on, changes in their revenue, and reassurance that your work is having a positive impact on their ROI.

Why is Data Discovery Important?

Data discovery is the first step into a more data-driven approach for monitoring your company’s and clients’ performance. Instead of reacting to the needs of your manager or client after the fact, a data discovery approach considers the goals and challenges of a company before building out a system for collecting and delivering the most useful information. This approach utilizes the full value of structured data to improve decision-making, optimize operational processes, and fuel new business.

Business analytics to drive growth and show value to your clients

Data discovery helps remove some of the biases and assumptions built into reports people create, helping them focus more on the things that practice owners and medical billing managers can control. Steps in data discovery include:

  • Collecting and preparing data -- This step can take a lot of time because of all the different business applications used by multi-specialty medical practices. Collection and preparation is traditionally a manual process that begins with extracting data every month, structuring it into a common format, and aggregating it into a central database. Today, the best business intelligence software largely automates this process.
  • Visualization -- Using visuals like graphs and dashboards to remove noise from data and highlight what’s useful information; visualizing data helps billing managers identify areas that need improvement, helps business owners understand which procedures to focus their attention, and can predict changes in the resulting revenue.
  • Advanced analysis -- Manipulating data in ways to uncover relationships between two or more data points at any given point in time; tasks include segmentation, correlations, and forecasting future value.

 

What Are the Best Uses for Data Discovery?

Here’s a look into some of the ways medical billing companies are using the data discovery process in business intelligence solutions to drive profitability, reduce waste, and create competitive advantage for themselves:

  • Improved operational efficiencies -- Billing companies and healthcare organizations need to be as lean as possible. Data discovery can be used to analyze a company’s operations for ways to reduce ongoing costs and maximize existing resources. For example, comparing your payer mix with the number of similar claims being processed by a certain payer as well as the amount of revenue you stand to receive will let you know where to prioritize your resources. Over time, you may notice a trend of similar claims being processed across multiple practices and can use that information to negotiate better payer rates.
  • Improved services and patient procedures -- Data discovery can track individual revenue streams to determine which services and patient procedures drive revenue and which are not. For example, a monthly report of collection trends may show a spike in certain laboratory tests being performed by pathology groups at certain times of the year. This information could be used to attract patients who typically receive the test the same time each year.
  • Transparency with clients and team members -- Medical billing companies should be able to supply practices with comprehensive performance reports at the click of a button. Provide customized reports to every client based on their unique challenges and performance focus.
  • Expertise -- Medical billing managers should be knowledgeable in how to approach troublesome denials. For example, denial rate gives billing companies data between all public and private payers and compares which provide the highest or lowest rate of denials for certain procedures. Once a procedure has been successfully adjudicated, the same process can be applied to the same procedure and payer in the future.
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March 29, 2024

Uncover barriers in your profitability

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March 29, 2024

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Meeting Dr. Homer, Pathology Billing, and Medical Business Intelligence
March 29, 2024

As Imagine’s Online Marketing Strategist, I typically communicate with a client by keyboard or phone, so having the opportunity to get to know them face-to-face is really refreshing. A few weeks ago, Dr. Kevin Homer from Texas Health Huguley Hospital visited our team at Charlotte Headquarters and gave us a lot of insight into his experience working with the team, why he chose ImagineSoftware for Huguley Pathology, and how powerful a medical Business Intelligence (BI) tool can be for pathology billing.

Dr. Kevin Homer is a Pathologist in Burleson, Texas and is affiliated with Texas Health Huguley Hospital. He received his medical degree from The University of Texas Southwestern Medical School and has been in practice for more than 20 years. Dr. Homer has used Imagine’s Business Intelligence Software since 2015.

Pathology Billing is Unique

When compared with other industries in that performing multi-specimen testing on a patient can generate an abundance of claims involving multiple payors. When Huguley made the decision to look for a new practice management and RCM software solution, Dr. Homer had specific criteria that had to be met: 

  • The software had to be powerful enough to handle both anatomic and clinical pathology billing
  • The company had to provide a hosted solution, enabling Huguley to remove hardware from their office. 
  • A strong implementation and support process with limited downtime. 

 

Real-time Medical Business Intelligence

Dr. Homer also provided insight on his favorite things about ImagineIntelligenceTM, which Huguley uses on a monthly basis to report on things like payer mix, collection rate and surgical complexity levels.

The find out more about Dr. Homer, Huguley Pathology, and his experience using the medical business intelligence tool, watch the video!

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Pathology Billing KPIs: 3 Metrics for Tracking Your Performance
March 29, 2024

Definition

Key performance indicators in pathology billing are a measure of pathology billing performance in select areas like clinical and anatomical pathology billing using criteria such as time and money that are important to the operations of a laboratory or physician billing practices.

KPIs are the things that management is happy to see. If you ask your average CFO about their biggest concerns, most will tell you that increasing cash flow is a high priority. In order to succeed in this, you must know which key performance indicators to track that have a direct impact of cash flow, identify the mistakes or bottlenecks preventing you from improving your performance, and have a means for collecting and disseminating that information to the people responsible for making those improvements.

pathology billing key performance indicators

Key Performance Indicators for Pathology

The best way to know if you’re making progress on the things that fuel your business is by monitoring them. It will help you stay the course and help build confidence as you see the process you’re making in real time. Start by identifying key performance indicators (KPIs) with the highest potential for improvement, followed by having reports set up specific to those KPIs.

  • Net Collection Rate (%): Net Charges ÷ Net Collections. The national average is between 88-92%. Below average might mean your staff isn’t following up as quickly as they should.
  • Bad Debt (%): Total Amount Written off ÷ Total amount that was eligible to collect. 10-12% is considered good to great in pathology. A great bad debt percentage is the product of higher collections due to better propensity to pay.
  • Denial Rate (%): Total number of claims denied ÷ Total number of claims remitted. You can also take the total dollar amount in denied claims divided by total dollar amount in claims submitted for remittance. This KPI tracks the percentage of denied claims and provides insight into how efficiently your claims process is operating.
ImagineIntelligenceTM provides custom reports and intelligence at scale to help you make data-driven decisions.

Reimbursement Challenges in Pathology Billing

In a 2019 survey conducted by independent research firm Laboratory Economics, 82.4% of laboratories and pathologists cited declining reimbursement as one of their biggest challenges. Pathology billing is comprised of several interconnected functions between multiple parties inside and outside a medical practice. Medical groups and large practices do close to 350,000 annually. Errors to watch for that slow down or reduce revenue growth include:

  • Missing billable tests- high volume testing leads to some billable tests being missed. Electronic interface between LIS systems and your billing platform reduces the number of tests being lost between front-end and back-end processes. This still requires careful due diligence. Patient insurance, demographics, and charge information between systems need to align or else may result in a higher denial rate.
  • Issues in eligibility - Eligibility errors comprise of 35-40% of denials even among the most well-run medical groups and practices. Online eligibility checks, insurance verification are effective methods for reducing these errors. Eligibility information being readily available within your billing system means that co-pay and deductibles can be collected prior or immediately following a test. In cases where insurance does not cover a test, patients can be given options for coverage or offered a discount depending on their propensity to pay. All this information can and should be available within the system.
  • Documentation errors- ICD-10 adds complexity since the lab and pathologist are now dependent on the referring provider for the actual ICD-10 code. There is also a need to make sure documentation captures all work done accurately and in a way that minimizes downstream denials. Pathology groups and practices should receive feedback through regular reporting.

 

Pathology Billing KPI Dashboard

A pathology billing KPI dashboard gives billing staff, managers, and executives immediate access to both basic and advanced data to help them better understand the current state of their billing. Even if your billing is running smoothly, you still need a dashboard to let you know in what direction your pathology billing KPIs are trending. When searching for a pathology billing dashboard, it should have the following capabilities:

  • The ability to drill into key performance areas including all KPIs and challenge spots. Separate and list denials by insurance plan according to which ones need to be worked.
  • Enough flexibility to accommodate different needs. Not every practice will have the same set of priorities. Dashboard that accommodates an assortment of filters and measures (ex. total claims, average reimbursement, days in A/R) and dimensions (ex. service date, payers, locations). Saving to a private folder or shared folder for everyone. Schedule to refresh data every day, week or month. Finance cube (denials by carrier, refunds, charge payments) Employee Productivity (ex. What they’re currently working on. “Show Me The Money” answers what is currently outstanding in your system (ex. Charges and claims on hold, statements being reviewed).
  • Accessible feedback mechanisms like email notifications and scheduled reports for communicating up and down the chain of command. No one should be in the dark on how your practice is performing ever again.
Get in touch with one of our Revenue Success Managers to learn how practices have grown by rethinking the way they report on performance.
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Using Analytic Solutions to Fix Revenue Cycle Weakness
March 29, 2024

Originally published October 13, 2019

Revenue cycle analytics is an approach to value analysis that includes all aspects of patient care, from supplies and equipment to services, care and outcomes. By implementing revenue cycle analytics along with population health management techniques, healthcare providers can avoid losing revenue in the midst of a value-based care reimbursement model.

healthcare revenue cycle analytics

What is Healthcare Revenue Cycle Analytics?

Healthcare revenue cycle analytics is a holistic way to view total spend across all categories, healthcare revenue cycle analytics improves visibility over compartmentalized spending that affects one or two areas of a provider’s operations. This is important because teams need access to all spend data to have a full picture of cost and to develop strategies to contain clinical and non-clinical expenses.

Despite their stated need for revenue cycle analytics, 7% of the CFO’s surveyed stated they still had no plans to use predictive revenue cycle analytics in the future.

A previous study found that 76 percent of hospital and health system executives expected to dedicate at least ten percent or more of their 2020 IT budgets to revenue cycle management analytics. Only seven percent of CFOs didn’t report having a plan to use predictive analytics for revenue cycle management in the near future.

How Data Analytics Can Aid the Revenue Cycle Process

Many healthcare organizations are unable to track where every dollar of their services is going. Revenue cycle analytics can help providers reclaim profits, drive down costs and view the initiatives that work together to give them true cost analysis of their practice.

For more information on how to identify weaknesses in your analytics, download the ebook, "7 Benefits of Using Healthcare Data Analytics."

Although a plethora of healthcare chief financial officers (CFOs) dedicated at least part of their technology budget to predictive revenue cycle management analytics by 2020, many provider system staff lack the appropriate skills to analyze large data sets or use sophisticated, predictive modeling solutions.

As Doug Brown, president of Black Book™ noted, "As fiscal pressures continue to build across the health care industry and as value-based care payment initiatives slowly simmer, healthcare organizations are recognizing the need for employing a robust data analytics program to pinpoint revenue cycle inefficiencies."

“With patient liability increasing five times faster than overall reimbursement, some health systems are not equipped to adapt to this trend and disparate data sources and the lack of internal analytics skills are immobilizing some providers,” added Brown. "Predictive analytics is a game changer in healthcare revenue cycle performance because it can be used to forecast revenue and correct issues that impact revenue before they occur.”

At ImagineSoftware, we understand many health systems are not equipped to adapt to the new landscape of value-based care. As a result, healthcare providers spend significant resources trying to collect payments using outdated and manual processes. They don’t take advantage of revenue cycle analytics software and other resources that can streamline their operations.

Our approach includes integrated teams, comprehensive scope and strategic planning framework to best optimize your business to care for your patients in a cost-effective manner. Our ImagineIntelligenceTM solution offers real-time analytics that can help healthcare organizations make more informed decisions regarding business models and monitor the strength of the organization – all under one dashboard. Contact us today to learn more!

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