Report: Midcycle revenue loss linked to inadequate documentation

The largest source of estimated revenue loss in the healthcare midcycle 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 midcycle functions. The revenue loss reported for an average 250-bed hospital was $2–$5.5 million.

The midcycle, 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 midcycle 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.

To maximize your midcycle, the report recommends monitoring midcycle performance by finding the weakness areas, considering the big picture, and understanding the relationship between quality and reimbursement. 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.