Financial Sustainability

Physician-friendly web technology can help hospitals grow revenue from ambulatory referrals

April 26, 2021 9:16 pm


U.S. hospitals are experiencing growing financial pressure from the ongoing migration of patient care from inpatient to outpatient and home settings. In a trend that has been intensified by the COVID-19 pandemic, ambulatory referrals are becoming the lifeblood of facilities looking to increase revenue opportunities and maintain footing within their communities.

It is critical, therefore, for hospitals to ensure the integrity of ambulatory orders. They can do so by implementing web-based tools and workflows designed to optimize order processes, thereby enhancing referring provider relationships, promoting the highest quality of care and increasing revenue from ambulatory orders. (See the sidebar below for a discussion of how to assess the impact on your facility of lost revenue from ineffective ambulatory referral processes.)

3 reasons hospitals miss out on revenue from ambulatory orders

Many hospitals find that ambulatory orders, including those for diagnostic radiology services, often do not result in delivered services and associated revenue. There are three common reasons for this problem:

  • Orders are rejected by the insurance company for various reasons.
  • The patient fails to schedule or misses the appointment.
  • Patient was not properly prepared (fasting, medication conflict, medical history).

To effectively address these issues, the hospital should strive to make it easy for referring physicians and patients to do business with the facility. This effort should be informed by a clear understanding of what referring physicians want in the relationship with the hospital. Addressing three considerations is imperative.   

1. Easy referral process. Referring providers are looking for ease, speed, and accuracy. The more time and effort required for physicians or their staff to understand their options and place the appropriate order request, the less likely they are to continue doing business with the hospital.

2. Transparency and clear, two-way communication. When referring patients, physicians often are left wondering if a fax went through, if an appointment was made or if a patient showed up. Addressing this concern requires clear and consistent communication between the hospital and referring provider aimed at ensuring all stakeholders are fully informed throughout the treatment process.

3. Quick report turnaround. The significance of providing timely and prompt diagnostic reports cannot be overemphasized.

How hospitals can improve access, communication and transparency

Hospitals can address these concerns, and prevent revenue leakage associated with them, by creating a web portal that provides physicians with central and transparent access to orders. The web portal should include pre-certification workflows and scheduling functions that offer physicians end-to-end order support, from ensuring order appropriateness and accuracy to streamlining patient scheduling and throughput.

Success depends on setting up the portal to effectively receive order requests and communicate order results back to the ordering physician easily and comprehensively. To support ongoing collaboration between the hospital and referring provider, the hospital should use the portal to communicate regularly with ordering physicians about their patients, keeping them apprised of when the patient has been scheduled and the patient’s status through the order. Ordering physicians also should be thanked for their referrals, with an assurance that the hospital will continue to communicate with them throughout the process.

4 areas of focus for ambulatory order process improvement

The hospital should design the portal to reflect best practices in order management to help referring physicians reduce the risk of coding errors and unnecessary procedures. With this point in mind, hospitals should focus on four core areas to support ambulatory order processes improvements.

1. Clinical validation. Physicians want a system that offers intelligence-based questions that give immediate visual feedback on order approvals, order stoppages and elective pre-medications. Hospitals can offer this clinical guidance by using electronic health record (EHR) data to help referring physicians assess medical necessity prior to ambulatory procedures. EHR data can be used to pre-populate patient information where possible and alert the end-user if medical necessity is not met. Solutions may include showing only those ICD-10 codes that truly meet medical necessity for the CPT code being ordered. Intelligent intake questions based on data made available from the hospital patient record via the web portal can help ensure patient safety by alerting physicians to unique circumstances, such as the need to prescribe an alternative order if a patient is allergic to a contrast.

2. Financial validation. Hospitals should design outpatient testing workflows with embedded pre-authorization and appropriate-use-criteria (AUC) checks. These checks help inform the user if pre-authorization is required based on the insurance company and the CPT code. Providing a process for financial validation also helps standardize medical necessity and AUC practices, and supports next-step processes by making it possible to automate patient communication with electronic instructions based on CPT codes. 

3. Patient engagement. Hospitals should extend digital front door components to the physician network to allow patients to be electronically engaged at every touch point in their care journey. This approach bolsters patient satisfaction with the experience, so the patient will develop a loyalty to the hospital. The patient engagement strategy should involve the use of intelligent, personalized patient communications and automated alerts, including electronic appointment reminders, CPT-specific procedure instructions and directions to the facility integrated with Google Maps — all delivered to the patient’s digital device.

4. Compliance. Shared hospital resources should also reinforce value-based reporting compliance, including integrated AUC. Physicians ordering exams or studies for Medicare Part B Advanced Diagnostic Imaging Services are required to consult AUC through a qualified Clinical Decision Support Mechanism (qCDSM). As part of the Protecting Access to Medicare Act, the ordering professional’s consultation with a qCDSM must be appended to the claim in order for the claim to be paid. Beginning in 2022, claims will require CPT codes with appropriate HCPCS modifiers and G-Codes that indicate which qCDSM was consulted.a

Streamline the order process with easy-to-use tools and technology

The core objective of an ambulatory order integrity portal should be to create a confident and standardized order delivery mechanism. The focus should be on developing simple solutions that streamline the process and educate referring providers by walking them through the process of creating accurate orders that support patient safety. Decision support staff should be on-hand to facilitate real-time collaboration instead of one-way communication, avoiding the need for burdensome follow-up calls, emails and faxes.

The system chosen to support these efforts should be capable of accepting many different types of information, including referral orders sent from unsecure faxing or fax servers. The best order management system will act as a data gateway for various types of information sources including patient submitted photos of prescriptions, scanned or faxed documents and direct connection to the referring physician’s EHR with print-to-HL7 technology. Enterprise-wide solutions should support pre-encounter, encounter and post-encounter processes of the hospital’s revenue cycle.

The technology solutions also should give the referring physician real-time insight into scheduling progress with a call management queue to reduce burdens on schedulers. It should allow for shared notes and documentation to further support care collaboration between the physician practice and the hospital.

In short, the platform should provide end-to-end order transparency, making it possible for both the hospital and the referring provider to gain insight into:

  • Average turnaround time from order submission to results
  • Order volumes month to month and year over year
  • All cancelled orders and reasons
  • Updates on order changes
  • Notifications that are also deliverable via email, text or inside the portal

Hospitals can further benefit from dashboards that give leadership the ability to monitor hospital ambulatory order performance, including centralized visibility into:

  • Order volume trends by physician, by group practice and collectively
  • Rejection trends by physician, by group practice and collectively
  • Room revenue analysis
  • Pre-authorization tracking
  • Priority patient tracking
  • Modality stats
  • Scheduler productivity

Benefits of ambulatory order integrity

Today’s healthcare organization requires constant planning and evaluation to successfully capture revenue and ensure profitability. Given the competitive nature of healthcare, no one in hospital administration can afford to overlook the power of something as essential as order management. By addressing gaps in ambulatory order visibility, healthcare systems can guard against unnecessary revenue loss, gain operational efficiency, protect patient safety and improve patient and provider experience.

Simply put, trust and ease of access are cornerstones in effectively marketing the healthcare
organization to the community. In the long run, if a hospital hopes to use new patient care technology to attract business to its facility and does not address physician frustration with ordering services, its will likely yield disappointing results.

By implementing steps to ensure orders are managed effectively, however, a hospital can not only secure a more reliable source of revenue but also ensure referring providers and patients perceive their organization as being distinctive, creditable and trustworthy. Such a hospital will stand out from the competition.

Understanding the financial impact of ineffective ambulatory order processes

To improve ambulatory order processes, a hospital needs first to understand the extent of the challenge it faces in addressing such orders. An important step, therefore, is to quantify the impact that ambulatory orders have on the hospital’s bottom line.

By looking at the average payment rate for different ambulatory order types, compounded by the percentage of orders or studies that are missed or rejected every month, hospitals can identify the amount of revenue being left on the table. An analysis of 2018 hospital claims data averages from Definitive Healthcare found that, on average, ambulatory orders make up 50% to 70% of all orders performed at a hospital.a The number of patients referred for ambulatory testing who are rejected, missed or improperly billed each month is significant, resulting in considerable revenue loss for hospitals and a negative impact on patient satisfaction.

Assuming an average missed or rejected order rate of just 7%, a 250-bed hospital ordering roughly 120,000 ambulatory diagnostic radiology studies annually can lose almost $90,000 a month in radiology revenue alone. All told, potential ambulatory revenue losses across various order types such as CTs, MRIs, PET scans and ultrasounds can tally more than $1 million annually.

Example of ambulatory cash-flow analysis

Total radiology studies per year: percentage of ambulatory business (outpatient) 120,732   Net ambulatory business: percentage of rejected and missed studies per month 57,951
48% 7%
Order type Average reimbursed rate Ambulatory studies/year Percentage of yearly Rejected or missed/year Dollars rejected or missed/year Dollars/month Total studies/year
Computed tomography $162                8,064 14%                      564 -$91,446 -$7,620                  16,800
Magnetic resonance imaging $332                2,880 5%                      202 -$66,931 -$5,578                     6,000
Ultrasound $112                7,488 13%                      524 -$58,706 -$4,892                  15,600
Diagnostic radiology $165              29,493 51%                   2,065 -$340,644 -$28,387                  61,444
Positron emission tomography $1,414                3,456 6%                      242 -$342,075 -$28,506                     7,200
Interventional radiology $2,185                    234 0%                        16 -$35,790 -$2,983                        488
Nuclear medicine $510                1,728 3%                      121 -$61,690 -$5,141                     3,600
Mammography $235                4,698 8%                      323 -$75,802 -$6,317                     9,600
  100% 4,057 -$1,073,083 -$89,424 120,732

Source: 2018 hospital claims data averages from Definitive Healthcare, as reported to CMS.

Common problems that plague ambulatory order integrity include:

  • Poorly documented or lost test results
  • Gaps in communication during transitions of care
  • Orders coming in without medical necessity being checked to ensure the diagnosis code aligns with the correct exam
  • The lack of a trigger to let referring providers know a pre-authorization is needed

In the case of a missing pre-authorization, if the facility performs the exam, it will receive no payment for it, and neither will the referring provider or the radiologist who reads the exam.

Limited connectivity and order visibility are at the crux of these problems, particularly among referrals from non-hospital-owned practices. An ambulatory physician’s practice usually cannot access a hospital’s patient records and information systems and therefore is forced to use antiquated technologies like faxes to schedule order requests, which inevitably leads to lost orders within the often-overtaxed hospital scheduling department. Physicians also often have decision-support systems that are inconsistent with the hospital’s protocols and preferences, creating a significant potential for miscommunication and poor information flow.



a Centers for Medicare & Medicaid Services, Appropriate Use Criteria Program, Aug. 12, 2020.


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