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Underutilized Strategy: How Data-Driven Referrals Increase Positive Outcomes

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The transition to two-sided risk agreements is only more prevalent in the healthcare industry, and fee-for-service models are increasingly becoming a thing of the past. Employers, payers, health systems, and providers alike are convinced that increasing the quality of care for patients and managing high costs is the most sustainable way to approach alternative payment models. As value-based care organizations prepare their population health strategies, one opportunity has historically been overlooked—referral management.

The last time we spoke on the blog about referrals, we discussed the importance of analyzing, building, and deploying preferred networks across care locations, a critical first step when beginning to manage and measure specialist referrals effectively. Whether an organization feels that referral management is too complicated or does not know the first step to take, they sit on incredible revenue and savings potential.

The average out-of-network referral equates to $5,000 in lost downstream revenue, and the patient pays higher out-of-pocket rates. According to a 2015 infographic by America’s Health Insurance Plans (AHIP), Medicare patients can pay between 118% to over 1000% more for care from out-of-network specialists.

Selection, Automation, and Management

Lightbeam’s referral management approach consists of three primary steps: referral selection, automating prior authorizations and appointment scheduling, and managing referrals with technology solutions that fit into provider workflows. After building a network and referring patients to the appropriate specialist based on their unique needs, there must be a way to close the loop to know if they went to an appointment and what their results were.

According to an article by RevCycleIntelligence, 87% of executives say that leakage, or when a patient continues their care outside of their provider’s network, is a high priority for referral selection but unsure where to start. Nearly half of all health systems lose more than 10% of revenue from out-of-network referrals.

One burden that can halt the referral process is prior authorizations. Prior authorizations are assessments of patients required by their insurance providers to determine if they truly need a given procedure or if it can be performed in outpatient facilities at a lower cost. The solution to solving the prior authorization barrier is automating them at the time of referral as effectively as possible and scheduling the procedure, either with the patient or guiding them.

A Lack of Communication

Consistent communication is a significant blocker to effective referral management. Approximately 65% of the time, primary care providers (PCPs) do not know if their patients visited specialists, and 40% of referred patients are no-shows, or they miss appointments and reschedule. On average, these cost specialists $500 per appointment.

The ultimate solution to facilitating expert referrals is leveraging data to build high-performance networks, ensuring patients stay in those networks, and placing an automated referral system into the referring provider’s workflow. Without a data-driven approach to analyzing and ranking specialists and building high-performance networks, patients may seek care elsewhere, ultimately impacting their long-term outcomes in more ways than one.

Matt Cheatham
Operations Director, ReferralPoint

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