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Top revenue cycle management tips for maximum success.
Healthcare providers are facing a perfect storm of clinical and financial challenges that have the potential to sink their practices in inefficiencies and lost revenue opportunities. The move from fee-for-service to value-based care, combined with other regulatory initiatives and demand for faster billing cycles and cost containment, are preventing most practices from performing at an optimal level.
But it doesn’t have to be this way. To overcome these challenges and get on the path to becoming a high-performing practice, providers must shift from traditional billing and collection practices to a more holistic approach. With a deliberate revenue cycle management (RCM) strategy, for example, healthcare organizations can work to ensure they are compensated for the full range of services they provide.
A complete RCM strategy has three main functions:
1. Revenue generation: Reducing gaps in scheduling and taking a proactive approach to capturing patient information and copays up front is critical for generating revenue.
2. Revenue capture: The activity that occurs between a patient being called from the waiting room until he leaves the appointment must be thoroughly recorded. Accurate and complete documentation of services rendered, and proper coding of those services are required for a practice to receive the highest level of payment.
3. Revenue collection: Back office billing functions enable a practice to collect revenue and round out the RCM cycle. This should be regarded as the last step of the RCM process.
While RCM sounds straight forward enough, implementing such as a strategy can be a challenge, especially since it requires breaking free from traditional – and often unprofitable – ways of running a practice.
To transform your business into a high performing practice and fully embrace RCM, here are a few tips to consider:
Tip #1 – Take a Team-Based Approach
In the fee-for-service model, the back office handles most of the billing and collections. But RCM requires shared responsibility among front office, back office and clinical staff. Team members must work together to ensure patient information is complete and accurate from the point of registration through clinical documentation. A single gap in data can delay payment or detract from revenue streams and negatively impact your practice's bottom line.
Remember, RCM begins with the first staff and patient encounter. The front office should collect demographic and medical information and verify eligibility before the patient arrives, making the process more efficient. At this time, they should make queries regarding primary and secondary coverage, since your practice may be leaving money on the table if it only files claims for primary insurance. Front office also should collect co-pays before the patient leaves the office and handle appointment reminders, since missed appointments equal lost revenue.
It's also incumbent on staff to follow payer-specific coding guidelines and modifier usage, and attach correct documentation to claims. Inability to do this can be costly. Our research shows that only 62% of practices review delinquent claims and only 59% of secondary claims are filed due to staff time constraints. Further, The U.S. Department of Health and Human Services estimates that more than $325 million is lost each year to down-coding established office visits. Don’t let your practice suffer from this influx of lost revenue.
Tip #2 – Improve Accounts Receivable Management
The measurement of days in accounts receivable (A/R) tells you, on average, how long it takes for a claim to be paid, based on average daily charge volume. Days in A/R should ideally be in the 30- to 40-day range, but a number of factors can delay payments, such as claim rejections and denials, incorrect coding, credentialing issues and incorrect posting and appeals processes.
The longer the money due is tied up with payers, the more cash flow problems you face, meaning you lose opportunities to invest and earn interest. Take steps to minimize claim errors and ensure your staff understands correct coding and the timeframe necessary to address appeals.
Another consideration is deadlines established by insurance companies, which require claims to be filed within a certain timeframe from the service date. While this timeframe – averaging 90 days – may seem ample, practices without an RCM strategy can often miss the deadlines and risk not being paid for services rendered.
Tip #3 – Expand Revenue Potential Overall
In a time of declining reimbursements, rising costs and increased regulatory requirements, it’s vital that physicians capture and are properly reimbursed for the full range of care and services they provide. These tasks include carefully documenting services rendered and capturing all details of care to ensure maximum reimbursement.
Practices also need to seek new revenue opportunities. For example, by looking carefully at key performance indicators, practices can identify where improvements can be made. Nearly one-third of all providers are unaware of how much in patient collections they write off each year. By making improvements – such as working denials daily and avoiding untimely appeals – practices can minimize write offs and increase their revenue.
Other strategies include working with an RCM vendor to determine if you are undercharging for services and considering different codes to maximize revenue. Analytics also can be used to identify patients who are due – or overdue – for services, encouraging them to make appointments that they may have neglected.
Linking clinical and financial processes is key to building a high-performing practice. By evaluating these tips and considering how you can apply them within your practice, you’ll have an opportunity to improve efficiencies, maximize collections and grow the new revenue necessary to navigate the stormy seas as the healthcare industry evolves.
David Wyatt is the vice president of revenue and clearinghouse at Greenway Health. Wyatt has more than 25 years of experience leading large operations and services organizations. Over the past 12 years, his focus has been in healthcare technology and services. His primary focus at Greenway is to fuel customers’ success through innovation and growth through Greenway service offerings.