Factors affecting your practice revenue -- payor policies, new legislation and patient-care codes -- are changing dramatically. By using this S.M.A.R.T. revenue-management system, you can set internal benchmarks and target areas that need to be improved.
The way in which practices are paid is constantly changing.
The whole process of maximizing practice revenues from patient care is known as “revenue cycle management,” or RCM. This includes checking patient eligibility, managing accounts receivable and everything in between. By implementing a revenue management system I call the S.M.A.R.T. system -- Systems, Management outsourcing, Accounts receivable, Revenue, Targeting -- you can increase cash flow and improve efficiencies.
Systems. Practice-management systems have been used exclusively as the core systems to manage the RCM cycle in a practice. The processes, procedures and technology that are the building blocks of the practice-management system must be evaluated to assess functionality and shortfalls. During the evaluation, consider products that can enhance and assist the practice in the focus on key areas, such as high outstanding patient balances. Practices should also assess which revenue-generating activities are not being done due to lack of in-house resources.
Management Outsourcing. Every practice has been approached to consider outsourcing key components of revenue management. Outsourcing isn't just about billing anymore -- it goes far beyond. With advances in information-technology, outsourcing has expanded into patient-arrival solutions, electronic medical recorda and online financial accounting. Outsourcing also adds a layer of controls that help to prevent fraud in many areas of practices and can bring in new, innovative ways to save your practice time and money. Practices need to determine their service needs, assess in-house capabilities and evaluate the value of utilizing an outside provider. Often, practices realize a great return on investment.
Accounts Receivable. What numbers can proactively indicate financial problems? What benchmarks does each practice need to evaluate, assess and control on a daily, monthly, quarterly and yearly basis? Who in the organization needs to receive this information and who is responsible for follow up on a timely basis? Each practice must identify the key indicators for their accounts receivable process that will serve as critical internal benchmarks. Once key indicators are identified, custom dashboards can assist in enhancing the management of these key indicators.
The following are some benchmarks to watch:
Revenue Cycle. Odds are that you are missing out on revenue in your practice in some way. Changes are that there are ways to improve your existing revenue cycle as well. The No. 1 reason for revenue loss is the inability of an organization to consistently meet complex and ever-changing payer requirements for pre-authorization, medical necessity and timely filing. And the No. 1 way to resolve this issue is to be proactive -- train your staff to probe for and collect this information before the patient leaves from their visit.
Targeting. Primary opportunities for enhancement may be found in changes to baseline functions -- registration, coding, billing, compliance and real-time reporting. How can errors be minimized in the registration process and coding, especially with the new Medicare consult services to be billed as Evaluation and Management Codes in 2010? Other areas traditionally overlooked are updating charge tickets (CPT & ICD-9 updates), compliance monitoring and utilization of tools, such as claim scrubbers and coding tools.
Factors affecting your revenue cycle -- payor policies, new legislation and patient-care codes -- are constantly changing, which means practices must evolve their processes as well. Periodically checking in on your revenue cycle management with the S.M.A.R.T. system will help you keep tabs on efficiencies within your practice and target areas that need to be updated or improved.
Suzanne Denzine, CPA, CHCC (Certified Health Care Compliance Consultant),CHBME (Certified Healthcare Billing & Management Executive) is a shareholder of Kolb+Co. SC, a CPA and business-advisory firm, and managing director of Kolb+Co. Medical Software Solutions. She works extensively in medical-practice management and her areas of expertise include: EMR analysis and implementation; personnel management; OSHA regulations; fee analysis, compliance programs; physician network development; physician/hospital relationships; third-party payor contracts and negotiations; and practice start-ups. She can be reached at (800) 461-8843, or visit www.KolbCo.com.
Ms. Denzine is a proud member of The National CPA Health Care Advisors Association. The HCAA is a nationwide network of CPA firms devoted to serving the healthcare industry. Members provide proactive solutions to the accounting needs of physicians and physician groups. For more information contact us at firstname.lastname@example.org.