Harnessing The Power of Your Physician Network Through Centralized Referral Management

Article Ecg Harnessing The Power March 2017 Web

Current processes for managing patient referrals are preventing health systems from providing coordinated care, which is a critical building block for value-based care. Weak coordi­nation of patient care transitions across providers and care settings drives up admin­istrative costs, compromises quality, and results in lost revenue as patients forgo recommended care or exit a health system’s network out of frustration. More often than not, providers are unable to effective­ly manage patient care transitions due to complexity arising from the fragmentation of care and health plan requirements. As health systems look for ways to improve care coordination, many are choosing to centralize the mechanism for managing referrals. This is a relatively low-cost, nonin­trusive undertaking and one that can reap real benefits—particularly when compared to other value-based initiatives. By employ­ing a centralized approach, a health system can maximize its investment in referral management, elevating care coordination to the level required by the ambitious new cost and quality goals that characterize today’s healthcare landscape.


Significant Patient Leakage

Patients often experience multiple barriers to following through with a referral, including cumbersome authorization processes, long wait times, and confusion about required testing or documentation; sometimes they may even have trouble getting a busy practice to just answer the phone. Some patients give up on receiving care altogether, while others seek care outside the network. Today this results in significant lost potential downstream revenue. In tomorrow’s value-based world, the ability to keep patients in network will have a larger-scale impact, with financial penalties attached to patients exiting the system.

Poor Clinical Outcomes

Each provider’s office has its own process, which may not include a set of standards to see referrals through to completion. This can result in “broken” handoffs, often shifting the burden of care coordination to the patient, which may result in the patient delaying or even forgoing the recommend-ed care. This also puts patients at risk for poor clinical outcomes during individual episodes of care—and over time, it can create a threat to overall patient health. Under value-based models that establish metrics for quality, health systems can expect to be penalized for these types of outcomes.

Inability to Compete With New Market Entrants

Higher premiums, deductibles, and co-pays have shifted greater responsibility for the cost of care to patients, causing many to adopt a more consumer-oriented mind-set. Patients have become far less tolerant of the challenges they face in navigating traditional healthcare settings and are increasingly willing to engage with new market entrants such as retail virtual care providers that promise more convenient care and better value for each healthcare dollar. Faced with this new competition, it is now more important than ever for health systems to work on improving the patient experience.


Successful centralization of referral coordination is about creating a patient-centered approach to patient care transitions that is operationally efficient and supported by technology. When done correctly, it solves the problems created by the weak referral processes in place today. Centralization also ensures that health systems can meet value-driven cost and quality goals by improving patient retention and thus increasing revenue, as well as decreasing clinical and administrative costs and supporting providers’ efforts to deliver patient-centered care.

Improving Patient Retention

With a centralized approach, patients are relieved of the administrative burden associated with a referral. This enhances their overall experience and helps ensure that a higher percentage of patients stay in network and receive recommended care. Referrals are routed from the provider’s office to a central repository, where a team of trained personnel handles all associated tasks for patients—verifying eligibility, obtaining insurance authorizations, managing prerequisite testing, coordinating appointment scheduling, and closing the loop by communicating the referral status back to the referring office. Referral staff use a technology platform that gives them visibility across the system, allowing them to adjust to changes in insurance and provider information in real time.

Lowering the Cost of Care

Under value-based reimbursement models, providers financially benefit when they keep their patients healthy at a lower cost. This is accomplished by ensuring that patients receive the appropriate care in the appropriate setting at the appropriate time. This provides more than a competitive advantage—it is an imperative for health systems today. Once a provider recommends a patient care plan, the system needs to be mechanized to ensure those needs are met. A referral center can engage with patients and direct them to the appropriate clinical and cost-effective setting.

Creating Process Efficiencies

Centralizing referral management brings order and efficiency to what has histori­cally been an unstructured and time-con­suming administrative function. Dedicated referral staff are trained on clinical documentation and insurance plan processing requirements, making them more effective at communicating with payers. Staff can also streamline and batch-process prior authorizations electronically, establish direct contacts with insurance companies to expedite authorizations, and work stag­gered shifts to ensure that patients can be reached later in the day. By creating a single point of contact for processing, tracking, and scheduling referrals, a central­ized approach also eliminates any overlap in efforts between referring and referred-to locations. These and other technology-enabled efficiencies cannot exist when referral processes are disparate.

Providing Patient-Centered Care

To meet value-based care goals, providers need to reimagine the way they practice, as well as reevaluate the time spent on care coordination activities. In addition to diagnosing and treating patients, they must also treat them through new avenues of care (e.g., telehealth visits via phone or video); ensure their medications are filled on time; educate and engage them, as well as their families, about their health; and follow up with them to encourage compliance with care plans. The only way that providers will have adequate time to meet these new clinical demands for patient-centered care is if administrative processes become less taxing. Referral coordination is a natural place to start making operational improvements, because the associated processes can be changed without hindering a provider’s ability to track and care for patients.


In assisting our clients across the country with implementing referral management centers, we have identified the following as key success factors in making this cultural, operational, and technological transformation:

Referral Standards

Every organization approaches centralized referral management a bit differently. But one rule of thumb applies across the board—the more standardized the processes in the referring and referred-to clinics are, the more efficient and effective referral processing becomes. In fact, the success of centralization efforts really hinges on the development of standard clinic operations for documenting and scheduling referrals—and equally as important, providers’ adherence to these standards.

At a minimum, referral standards must establish baseline criteria for the following:

  • Entering referral orders or requests accurately and completely
  • Identifying and prioritizing urgent referrals
  • Managing prerequisite testing and information requests across a specialty
  • Defining appointment types used to schedule referrals
  • Communicating results/following up with the referring provider
Physician Champions

Identifying physician leaders to participate in the design of the referral management process is critical, both in developing work flows that support the link between the patient care transition and the ongoing care of the patient and in ensuring provider adherence to these work flows. Health systems will be most successful when they employ a collaborative approach to referral management design, recruiting physician champions who can engage their peers across the network and advocate the benefits associated with standardization.

Technology-Enabled Routing, Sorting, and Tracking

Utilizing an EHR or technology platform specifically designed for referral management is a requisite element of effective centralization. To process referrals efficiently, dedicated referral staff need real-time access to frequently changing insurance and provider information. While they will vary by organization, all platforms should ideally meet these core requirements:

  • Provide support for the efficient identification, rout­ing, and processing of a referral
  • Incorporate financial clearance rules that enable staff to process insurance requests in a timely manner
  • Function as a central repository for provider and insurer requirements for efficiently tracking, updat­ing, and modifying referral processes

By themselves, referral standards and technology are not sufficient to ensure a seamless patient care experience. A key factor in the success of any centralization effort is the level of communication between referring and referred-to physicians. It is important that both parties agree on the appropriate workup for a patient and understand which diagnoses the referred-to specialist sees. This communication serves as the foundation for algorithms that pair patients with specialists. Referring physicians also need confirmation that their patients receive recommended care, and referred-to physicians need to know that the appropriate follow-up care is in place once they have treated patients. Referral management centers can generate status reports to keep clinicians up to date on their patients. At a minimum, these reports should include the referring physician, the referred-to physician or specialist, the referral status, and the processing time. Health systems can generate additional reports based on the requirements of their clinics and providers.


It is also critically important for referral management centers to track process and performance metrics. Metrics such as referral turnaround time provide insight into staff efficiency and cost savings gained, while performance metrics like the referral conversion rate can be used to identify downstream revenue. Health systems should identify the metrics they wish to track before they begin building their referral management center infrastructure, as the metrics often need to be built into the technology platforms.


Centralized referral management is a win for both physicians and patients—and a cost-effective, manageable first step toward meeting new value-based goals for health systems. Efficient care coordination helps attract and retain patients. In many instances, health systems already have front-office staff performing many of the tasks associated with coordinating referrals and using their EHR for tracking them. Therefore, it entails a relatively minimal investment to build upon the existing infrastructure by centralizing and designing the necessary standards, processes, and technology platform. Centralizing referral management provides a way for health systems to improve patient satisfaction without significant capital investment and disruption to physician practices.