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Perfect the revenue cycle to supercharge practice income

Medical Economics JournalMedical Economics June 2023
Volume 100
Issue 6

The revenue cycle management (RCM) process is critical for the financial performance of a medical practice. But what is the best way for a practice to handle the RCM process?

The revenue cycle management (RCM) process is critical for the financial performance of a medical practice. But what is the best way for a practice to handle the RCM process? Should you keep it in-house or partner with a third party to manage it for you? Medical Economics sat down with Tiffany Wells, CRCP-I, Senior Director of RCM EverHealth, a medical technology company, to discuss these questions. The following transcript was edited for length and clarity.

Revenue cycle management: ©Kiattisak - stock.adobe.com

Revenue cycle management: ©Kiattisak - stock.adobe.com

Medical Economics: What are the essential components of a successful RCM process in a medical practice?

Tiffany Wells: Start with having a clearly defined workflow. One of the common (questions) I hear a lot is, “When does the revenue cycle management process begin?” And for most people, it starts later than it should. So look at your processes, from patient registration through every time that appointment or claim is touched and until that claim is paid in full. Make sure you have a clear process that everyone understands and knows how to follow.

I would say the second part of RCM is tracking your key performance indicators (KPIs). Your KPIs are intended to measure each of those processes and tell you how well (you’re) doing in them. So there are some KPIs that indicate the front-end process, and there are some KPIs that measure our back-end processes and how effective we are in collecting. If you have those two pieces in place, then you’re setting yourself up for success.

Medical Economics: What KPIs are the most important to track?

Tiffany Wells: The ones that we track are the Medical Group Management Association standards. Those are clean claim rate; we want to make sure we’re submitting and getting claims approved by our clearinghouse before they reach our payer. Denial rate, that’s where analytical skills come in, and you want to find gaps in your process so that you can decrease the avoidable denials as much as possible. Are you paid in 30 days? That’s a good one that I think a lot of people miss. If I’m getting paid on most of my claims in 30 days, then most of my processes are working well. Finally, your net collection rate. That is super important, because you want to make sure you’re not leaving money on the table. It could be that your claims are paying, but what are they paying you? Is it the correct amount? If not, that will indicate a different problem within your workflow. So those are the KPIs that we use to assess our practice performance.

Medical Economics: How can a practice ensure timely and accurate billing to prevent revenue leakage?

Tiffany Wells: We have KPIs that track provider lag. We really want to make sure our providers are signing off on our notes and submitting them to the billing team. So we want to make sure that we are paying attention to that process. We also have a lot of technology that helps us. So in our practice management system, we have tools that track the number of claims that are not submitted and are pending to be billed. Technology will be your best friend as you’re going through your revenue cycle process.

Medical Economics: What factors should a practice consider when deciding whether to manage the RCM process internally or outsource to a vendor?

Tiffany Wells: I would say everyone can benefit from outsourcing. Though what is your model? Some practices outsource their entire revenue cycle process. For some practices, it’s just one part of the process. You want to constantly be evaluating what is a really good use of your team’s time and what are the processes that we can outsource. For instance, some practices only outsource the payment posting portion of the process, and they utilize their in-house team to focus on analyzing the accounts receivable work and how to improve it. I think outsourcing is beneficial for every practice. It’s whether it’s a full model or just certain processes.

The other question is, “Do they match what your expectations are?” There are some partners that provide RCM but only until that claim hits a certain age bucket. Is that something your practice can handle after that age bucket to make sure that you’re able to collect those dollars? Or do you want to completely turn that over to someone (who’s) going to advocate for you and fight for every dollar until it is paid to you? Sit down and map out what is important to you. Then find a partner that you think has the best qualifications to fit that need.

Medical Economics: What steps can practices take to ensure a successful partnership with a third-party RCM vendor?

Tiffany Wells: The first is going to be the interview process. You want to make sure you have the right partner and they follow all your processes. You are physically in the office and your third-party biller is not, so you want to make sure that the communication works as if they were physically sitting in your office. You want to figure out what’s the best way to communicate. Is that within your practice management system? Is that through email? Weekly meetings?

Medical Economics: What strategies can practices use to minimize denials and payer appeals?

Tiffany Wells: Really take a step back and analyze what caused the denial to begin with. There’s always a root cause. It’s usually process driven. So if you’re getting a lot of denials due to patient registration, eligibility or missing referrals, you want to take a step back and figure out what didn’t happen correctly in the processes. Then you want to constantly be evolving and making that better. Next, is the denial something related to coding? Is your provider doing the coding? That is a very hard job for our providers to do — to keep up with all the payer rules and regulations. That is one of the benefits of outsourcing that function; you have an entire team that is dedicated to just that.

Medical Economics: How do you balance the patient satisfaction and care part of the practice against the financial performance?

Tiffany Wells: To your second question, that is a challenge. It’s really about the timing in which you communicate with your patients that there’s an outstanding balance. We find that the faster we’re able to communicate with them that they do have an outstanding balance that wasn’t paid at the time of service, the better the relationship that we have. The longer that you wait — six months, a year later — you’re now going to find there could be a bit of conflict with your patients not remembering that they were at the office, maybe not being able to financially afford it at that time. So the sooner we’re able to communicate to our patients, (the) better that relationship will be.

Medical Economics: What roles do artificial intelligence (AI) and technology play in the RCM process?

Tiffany Wells: AI is the way of today and the way of the future. As I mentioned earlier, having technology really does help you find the gaps in your processes. Being able to have a tool that will tell you how many claims are not submitted, it takes the guesswork out. It takes the manual reporting out, and it’s right in front of your face. So you’ll have some technology that gives you claim statuses back. You’ll have some technology that helps you appeal faster, some technology that converts your paper explanation of benefits into an 835 file, which makes posting a lot easier, smoother and faster. So technology is evolving every day. Our world is evolving, and you want to make sure that your practice is as well. But we want to make sure that each partner we decide to bring into our practice meets our needs. So I want to make sure if there (are) five different technologies for patient outreach, which one is going to be the best for my patient demographic? So do your research. Technology is coming, but it’s about what the best fit is for you and your practice.

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