Billing workflows: 5 practical tips to reduce denials, improve cash flow

Time is money, and many physician practices today are short on both. Which is why optimizing billing workflows to accelerate claims submission and improve accuracy should be an administrative priority to turn things around on both fronts.

Technology is often the go-to solution for healthcare administrative workflow woes, including billing. Still, it’s just one of several practical steps that can deliver tangible impact, many of which require little to no capital investment.

Here are five of the most effective.

• 1 - Monitor KPIs

Implement a mechanism to monitor key performance indicators (KPIs) to track the practice’s revenue cycle management (RCM) effectiveness and efficiency and identify bottlenecks that hinder cash flow. Financial KPIs show how well the practice is converting services into income. They include Net Collection Rate, which should run 95–100%; Gross Collection Rate, which is helpful for spotting capture issues; Average Reimbursement per Claim, indicating payer performance and coding accuracy; and Bad Debt Rate, which signals poor collections or communications when write-off rates are too high.

Operational KPIs reflect workflow efficiency by highlighting how smoothly the billing process runs. The Clean Claim Rate should ideally stay above 90%, while Days in Accounts Receivable (A/R) should be under 45. Also good are a short Claim Lag Time, low Denial Rate, and high First Pass Resolution rate.

Volume and activity KPIs reflect billing throughput and help practices track overall billing activity and trends. Total charges and payments reflect revenue flow and growth, while the number of claims submitted indicates billing volume and practice productivity. A/R aging, which breaks down unpaid claims by the number of days they sit in A/R, suggests a problem with collections if the number gets too high, particularly when it slips over 90 days. In what is a sign of the times, however, few healthcare providers are performing at the once-industry standard of maintaining less than 20% of A/R at 90 days or higher. Instead, the average now is 35% or higher.

• 2 - Use Trained and Credentialed Coders

Slow, inaccurate, or incomplete coding contributes to delayed and denied claims. It’s a wrench in billing workflows that the practice may not even be aware of, particularly when physicians are tasked with self-managing their coding or the practice lumps coding responsibilities in with other adjacent areas, such as registration.

Placing coding responsibilities in the hands of non-coders can quietly drain revenue from the practices in several ways:

• Denials and Underpayments: Coding errors are responsible for up to 22% of claim denials in private practices, frequently due to mismatched codes, lack of medical necessity, or payer-specific requirements.
• Delayed Reimbursements: Incorrect coding leads to delayed payments, which increases days in A/R—contributing to the creeping percentage of aged receivables over 90 days—disrupting cash flow and forcing staff time to be diverted from core responsibilities to reworking claims and managing denials.
• Lost Revenue: Industry estimates suggest that 10–20% of claims are denied on first submission, many of which could be avoided with proper coding.
• Compliance Risks: Mistakes like upcoding or unbundling can trigger audits, fines, and even fraud allegations. Penalties under the False Claims Act can reach $27,000 per claim, plus triple damages.

Investing in credentialed coders, whether as direct hires or through an outsourcing partnership, who are experienced in the practice’s specialty or mix of specialties, can quickly pay for itself.

• 3 - Improve Patient Registration Accuracy

Front-end patient registration errors are a significant source of lost revenue for physician practices. Incorrect patient demographics or insurance details can result in denials and payment delays. At the same time, failure to properly verify eligibility can cause services to be rendered without coverage, leading to write-offs. Additionally:

• Duplicate or mismatched patient records can trigger compliance issues and billing confusion.
• Coordination of benefits errors can cause denials due to incorrect payer sequencing.
• Outdated or missing authorization or referral data results in non-covered services and denials.

To avoid these costly mistakes, ensure registration staff verify and update patient information at every visit. Also, properly educate the registration team on the proper questions to ask patients, on identifying common patient employment status and age errors, and on managing unique circumstances that may arise.

• 4 - Optimize Prior Authorization

Unsurprisingly, prior authorization is a common source of physician practice revenue issues. Today’s prior authorization process is more complex than ever due to the industry’s transition to value-based care and the growing number of services subject to advanced medical necessity and appropriateness verification. Additionally, the process itself is time-consuming and often involves dealing with denials and appeals, contributing to a heavy administrative burden and new challenges for staff who must understand the clinical documentation and office notes necessary to support the request.

To avoid the revenue cycle impacts of prior authorization issues:

• Standardize processes by working closely with payers to understand their requirements.
• Implement status tracking to ensure timely approvals and identify patterns that can be addressed internally.
• Ensure the right resources are in place to create a high-performing prior authorization team capable of efficiently managing the prior authorization process.

Finally, utilize predictive analytics to identify trends and patterns in denials and rejections. Doing so informs and enables process adjustments to help improve decision times and success rates.

• 5 - Implement Practice-Appropriate Technology

Leveraging technology can significantly improve the efficiency and accuracy of the overall billing process, including prior authorization. Automating aspects of RCM using AI agents or intelligent automation tools can reduce workloads, allowing staff to focus on more critical tasks while minimizing the risk of errors. It can also reduce manual touches and increase staff efficiency.

While leveraging the latest technological innovations can come with a hefty price tag and necessitate IT support that can be out of reach for many practices, some “basic” solutions leverage advanced tools and deliver an ROI rapidly enough to justify the initial investment. One such solution is claim scrubber technology that corrects mistakes before a bill goes out the door. For those practices that utilize a clearinghouse for claims submission, scrubbing is often included. If it’s not, a claim scrubber solution is a non-negotiable for even sole practitioners to avoid leaving critical revenues on the table.

Also, consider implementing an AI-powered computer-assisted professional coding (CAPC) solution. Unlike their traditional computer-assisted coding (CAC) counterparts, these tools are designed specifically to support professional-fee coding. They ensure precise coding across specialties, encompassing ICD-10-CM, CPT, HCPCS, modifiers, and professional E&M levels, and feature integrated workflows to simplify coding tasks, facilitate the efficient abstraction of multiple parameters, and eliminate the coding-related errors that drive billing errors and lead to payment delays and denials.

Ending Billing-Related Revenue Leakage

Physician practices are operating in a harsh denial landscape where nearly 15% of medical claims submitted to private payers for reimbursement are initially denied, including 3.2% for which prior authorization was received. What’s more, each rejected claim costs an average of $25–$30 to rework, resources few practices can spare as the number of denied claims climbs. 

Billing workflows are a significant source of revenue leakage that physician practices can no longer ignore. By taking proactive action to implement a few key changes, these leaks can be plugged and the revenue cycle restored to optimal levels.

Debra Stall is the senior vice president of transitions with AGS Health.