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Controlling Patient Referral Leakage

ReportingMD works with their clients to Control Patient Referral Leakage

By Michele Caravan

Patient Referral Leakage (also referred to as network leakage or referral leakage) happens when a patient leaves a hospital’s network in favor of out-of-pocket network providers. This tends to happen for a few reasons, including lack of provider expertise and ineffective retention initiatives. 

Referrals are made to provide better care to patients while avoiding medical complications. Physicians (or PCPs) won’t make a referral to an outside specialist unless it’s necessary. Sometimes referral leakage is unavoidable. For example, when a patient needs medical care that is unavailable in their network, a healthcare provider needs to understand what the patient needs in order to have the best health care. Generally, these outside referrals are due to a lack of equipment or they don’t have the right facility to perform a certain procedure or test and sometimes it’s at the request of the patient to go outside of the network.

When it comes to referrals, 55-65% are being sent to out-of-network providers. This occurs because typically, providers, referring physicians and call centers lack information about the specialists to which they are referring patients to. This lack of information can add up, costing upwards of $821,000-$971,000 per physician.  However, one in four healthcare systems don’t know or even track how much revenue they are losing on referral leakage.  It is estimated that the average hospital loses 10-30% of their revenue to patient leakage. These costs can skyrocket over time as physicians lose chances to coordinate care for patients within their network.


When trying to identify ways to reduce referral leakage the following can help… 

  1. Communication
    1. Making sure you have clear communication between physicians, patients, and hospitals. This will help to ensure a seamless and overall better care experience for the patient
  2. Provider and Specialist Information and Trackable Referrals
    1. Having a physician collaboration that allows the providers to stay up to date on what specialists and treatments are available in their network
    2. Being able to track the referral from start to finish will also help to lower the number of out-of-network referrals
  3. Provide ongoing quality care
    1. If a patient feels that another healthcare system provides better care for their condition, then they are more likely to go out-of-network. Employing expert physicians with a wide range of specialties will reduce the number of out-of-network referrals.
    2. Allowing patients to review quality metrics when it comes to patient outcomes, patient satisfaction scores and providers reviews
  4. Transparency
    1. Be transparent in all aspects. More patients are shopping around for healthcare and looking at cost metrics when making decisions about their health. Provide patients with upfront estimates of costs and detailed end of care financial statements.
  5. Timely Access
    1. Ease of use and timely access are pivotal to a patient’s care. It’s important for a patient to receive medical care easily and in a timely manner. Having large wait times for appointments or procedures within a network is an inevitable reason for patients to seek care from an out-of-network facility.


Value-based care analytics extends far beyond data aggregation and reporting. Success in value-based healthcare depends on strong clinical data expertise, deep programmatic knowledge and performance analytic solutions that are flexible and transparent. We partner within each level of an organization to help you make the transition to value-based risk smoothly, with less administrative burden and no disruption to the delivery of care.

ReportingMD has more then 18-years’ experience in this category and is uniquely positioned to create a value-based care analytic management program that allows:

  • Optimized quality scores
  • Reduced physician, IT and administrative burden
  • Enhanced performance incentives and reimbursement
  • Improved patient outcomes through care-gap management

Think of our team as your “plug-and-play” quality analytics department.