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Before physicians buy a revenue cycle management system they should do more than listen to a vendor’s sales pitch.
Small physician practices can expect their IT vendors to add new revenue cycle management (RCM) tools that will improve patient billing processes. But physicians shouldn’t expect technology alone to solve all their problems.
In fact, physicians should be cautious when vetting RCM software, warns Mutaz Shegewi, research director covering provider IT transformation strategies at IDC Health Insights, a division of Framingham, Mass.-based IDC Research Inc.
At a time when many physicians struggle with inefficient billing processes that often contain errors and are labor intensive, Shegewi said doctors are increasingly looking for systems to simplify bridging the patient encounter with administrative data to streamline payment.
Implementing RCM systems are gaining a renewed sense of urgency as small physician practices enroll in programs like Medicare’s Quality Payment Program, including the Merit-based Incentive Payment System, as well as other pay-for-performance initiatives. In this environment, Shegewi said, physicians are demanding RCM tools to automate financial processes and medical billing tasks.
“Typically, vendors offer physician practices everything beyond the patient encounter, including scrubbing the codes, generating and submitting claims, and then posting the payment to the practice. In return, vendors ask for a percentage of the practice’s revenue and for some practices that’s a very appealing offer,” Shegewi said.
However, this arrangement comes with many challenges because oftentimes vendors and their clients don’t communicate effectively and set the right expectations, Shegewi said. He added that too often, practices think if they do nothing beyond the clinical aspect of the patient encounter and outsource RCM to the vendor, they have no role to play. This view, however, causes problems.
“There are best practices that need to be followed to facilitate the billing process. For example, there are coding processes and tasks that need to be streamlined to ensure practices properly code items prior to the end of the encounter, which with the aid of the vendor and their capabilities can be identified and continuously improved on,” Shegewi said.
Next: Four strategies to improve RCM operations
Four strategies to improve RCM operations
As small physician practices engage more deeply with vendors in an effort to improve efficiency, reduce costs and increase revenues, Shegewi recommends four key strategies that small practices can deploy that will help them improve their RCM operations.
1. Understand your goals and the IT solution. Physicians at small practices must understand their revenue targets, and vet technologies that help them meet their goals. The finances and overall health of a practice will be impacted by the performance of the solution. Therefore, it is important to ensure the solution is well-aligned with practice expectations.
2. Aggressively assess RCM tools. There’s a wide range of RCM systems on the market and some vendors are involved in mergers and acquisitions to enhance their RCM solutions. If a vendor touts themselves as having the ability to outsource a practice’s RCM system, physicians should find out exactly what processes the vendor or the solution will address and take an informed decision about it. Remember, the revenue cycle is a multifaceted and multi-step process that includes everything from pre-registration and registration to charge capture and claim submission, the remittance process, collections, as well as an evaluation of the utilization of a practice’s revenues.
3. Stay vigilant during an RCM implementation project. During the installment of RCM software there may be minor areas or issues that could lead to catastrophic results. For example, if you are missing certain information and codes in your claim submission that could result in errors and claim rejections. The front and back-end office operations of the practice still have a role to play alongside the vendor to identify and ensure proper information is captured, and that best practices are followed prior to and after the software is installed and being used.
4. Learn from, continually improve on and optimize your RCM solution. The solution should reduce the amount of time for receiving payments on the services rendered. Some examples of ways RCM solutions do so are through automating real-time tasks, sending reminders about appointments and balances, offering reports and dashboards for enhanced visibility, as well as rule engines that increase the likelihood for first pass claim acceptance.
“As physicians choose the right RCM system for their practice, it’s very important that they determine what they want in an RCM system,” Shegewi said. “There has to be a lot of transparency and visibility into the features of the software to understand how the technology works, what the technology will achieve and what business processes physicians want automated.”