Physician Advisor ROI Tool


Physician Advisor programs have a track record in revenue retention, improvement, and billing compliance that allows organizations to quantify the positive financial impact of the program.

It is critical that physician advisor programs and finance have a strong working relationship because they intersect finance, utilization, and clinical practice. Physician advisor programs with employed physician advisors is a typical structure that may include supplemental contract physician advisor coverage, especially in early years of program growth. Early program growth can coexist and benefit from external contract group coverage from a manpower and expertise standpoint. Physician advisor programs may also consist of a contract physician advisor service that can be evaluated by this tool for financial viability.

As internal programs grow in FTEs and expertise, the cost of using external vendors should be evaluated on an ongoing basis. This analysis is broken into three physician advisor program levels with the assumption Level I is the starting point for most new physician advisor programs. A Level 1 physician advisor program (internal or external) will significantly improve reimbursement retention and compliant revenue cycle performance that will than pay for a physician advisor program. Level 2 & 3 physician advisor programs are more mature programs with even greater positive impact on revenues that should involve multi-disciplinary root cause improvements for sustainable revenue integrity and compliance systems. In addition to financial improvements, there are many "value adds" to a high performing physician advisor program that are worth noting but hard to quantify in financial terms. This list of operational areas for physician advisor programs tiered 1, 2, and 3 are meant as general guides. This analysis tool is meant to assist organizations in measuring margin improvement as success metric of the physician advisor program with some extrapolation to the overall utilization management program. We use overall margin improvement because physician advisor programs impact both cost and reimbursement in positive ways.

This tool is able to be modified if the organization wishes to change metrics or build in additional metrics. If available, the actual per unit revenue capture will provide accurate financial tracking, however, average revenue per case or unit will still provide valid information. For example, the difference between an inpatient admission reimbursement verses observation stay reimbursement may be measured by the facility average. All physician advisor programs should cover 7 days a week for approximately 9 hours per day to provide second level reviews, and 5 days / week for authorization peer to peers if needed. In the case of locations with payer availability greater than 5 business days consider coverage to match payer coverage such as weekends.

Use this analysis to compare the revenue improvement achieved by the physician advisor program less the costs of a physician advisor program to obtain net benefit. The Level 1 physician advisor functions are usually done by either internal physicians or an external vendor. If external program, capture cost of current functions at the expense level of the entity providing the physician advisor service.

Instructions: All cells are currently placeholders, update the cells for cost and revenue improvement based upon organization actuals from the finance department:

  • Actual expected incremental costs for the physician advisor program
  • Expected year over year (YOY) growth in SWB, expenses and revenue improvement