How to Break Even on Medicare Reimbursements

Karen Minich-Pourshadi, for HealthLeaders Media , February 28, 2011

There isn’t a quick fix on this, you’ll need to do a process evaluation, and that can take four to six months to gather all the data, Gift says.

If you’re not sure where to begin your full-scale roll-out of Lean or Six Sigma, consider looking at your imaging and testing levels, since reimbursement cuts are already in place for these services. And you may be surprised to learn how many of these tests are duplicated.

“Often tests are orders and the lab, or whoever, doesn’t get the results on the chart quickly enough. So another lab is ordered by the physician. Or a test only needs to be performed only once but it is not noted on the record and so it’s ordered and performed every day,” Gift explains. “It’s a system [communication] breakdown.”

2. Instruct on Decreased Utilization. Along the lines of out-with-the-old philosophy, and in with the new, you must train your staff to understand why they must decrease their utilization across the board.

“You have to change the mindset of the physician,” says Gift. “You can have all the data, but what you find is that physicians have been trained to practice a certain way and that’s the way they continue to practice.”

It’s unfortunate, but most people resist change and the hospital employee is no different. However, the time for hesitation has passed and your staff must embrace the new. Reform means healthcare professionals must innovate and improve processes or watch your bottom line get worse with every passing day.

“You have to do a solid analysis of your utilization, because inevitably when you start to present data to nurses and physicians, [they] will challenge it,” he says. “You have to engage these people and get them to understand what’s happening and how they can impact the process.”

Though we all wish that Medicare reimbursements would go up instead of down in the coming years, the fact is, it’s highly unlikely. So, your best efforts will be needed in the coming years to try to at least get your Medicare to a breakeven point. 

Karen Minich-Pourshadi is a Senior Editor with HealthLeaders Media.
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3 comments on "How to Break Even on Medicare Reimbursements"

Tim McVey (3/1/2011 at 10:40 PM)
For those of us whose Medicare DRG Reimbursement includes a significant DSH add-on, we'll be challenged to break even in 2014 and beyond, after the Health Care Reform cut-backs to DSH reimbursement begin. Theoretically, the DSH reimbursement shortfalls should be offset by the revenues from the newly-insured, but in certain markets that won't always be true [INVALID] particularly in markets along the Border where undocumented individuals won't be eligible for the new low-cost insurance coverage.

Scott (2/28/2011 at 3:15 PM)
I saw the headline of this article and thought that there would be some unique insight or ideas mentioned. This article said nothing that wasn't already known. The end result is that I will never be able to reclaim the 5 minutes that I wasted in reading this!

John Stanton (2/28/2011 at 2:35 PM)
Part of the analysis process must involve the FTE's involved in the revenue collection cycle. As painful as it might be, adopting [INVALID]d technology can reduce staffing costs while improving the quality of daily posting files. If you currently employ data entry staff that key from paper EOB's or images, you are way behind the curve. Likewise, if you have one FTE sitting in front of 2 computer screens for data entry, you are wasting time and money. If you know you need to improve your revenue collection process, but don't want to go through the RFP process, email me at and we'll get you started in the right direction.




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