Did you know that an underperforming revenue cycle causes US doctors to leave around $125 billion per year on the table? Being successful in the healthcare industry requires not only outstanding patient care but also an efficient revenue cycle management process. While some practices excel at both, others are struggling to develop an RCM process that is efficient and profitable.
Naturally, you want your practice to have a successful billing and collections process, and often this requires being critical not only of your RCM performance but your own performance. Improving an underperforming revenue cycle will take some investigating into the hard questions you've been avoiding and prioritization on your part to find solutions.
Here are 7 revenue cycle management areas that practices should focus on to improve their bottom line.
1) Always Verify Insurance
The top reason why claims are denied is because insurance coverage for a patient was not verified. A patient who has had the same insurance for years may change insurers at any time, so it's essential that insurance verification takes place every time a patient receives medical services.
Preauthorization may be necessary in some cases, and in some instances, plan benefits do not cover the services rendered. Checking beforehand can save massive amounts of time.
2) Update Your Practice's Technology
Both financial services and healthcare are heavily regulated, and that can make creating an innovative medical billing process even more complicated. However, healthcare reimbursement is constantly changing. If your revenue cycle is stuck in the past and isn't able to handle modern day challenges like the increasing number of patients with high deductible health plans (HDHP), your revenue will drop.
Giving your patients the ability to pay their balance online can result in a significant increase in revenue, greater savings, and earlier payments. Online payment portals, balance notifications, and online easy-to-read statements might seem like small changes but they deliver big results to your revenue cycle.
And since there's no getting around the fact that many bankruptcies involve illness, injury, and medical bills, offering payment options and helping patients plan for costs can ultimately cut down on bad debt and keep days spent in accounts receivable under control.
If your revenue cycle isn't up-to-date with technology that can help your practice collect from patients with ease, you might also wonder what else you are missing out on. Your revenue cycle might be stuck in the past and causing you to lose money.
Is Your EHR Holding You Back?
Investing in a unified EHR rather than continuing to use an outdated or patched-together EMR and PM system, is an investment that pays off. With a unified EHR your problems can be addressed more quickly, and clinicians can answer questions and work out billing issues immediately.
The best medical billing software for your practice works with your established workflows and integrated with your EMR. It should accelerate the billing process while providing accurate information for insurance claims and patient out-of-pocket charges.
Even if your medical billing software is known for being easy to use, investing in training is still wise, so staff members can learn to use all the helpful features and make the most of the investment. Exceptional medical billing software, combined with training and a conscientious staff can go a long way to reducing the number of denied and rejected claims your practice deals with.
3) Communicate Copays
Increasing plan deductibles might be a sound solution to slowing health care cost growth, but these high deductible health plans pose a new array of challenges to healthcare revenue cycle management. The number of people covered by an employer-sponsored high-deductible health plan (HDHP) is growing while almost 90% of enrollees in Affordable Care Act (ACA) in Affordable Care Act (ACA) Marketplaces have a HDHP. Communicating financial responsibilities to your patients is no longer optional, it's essential.
Co-pays may seem like token amounts but in reality they are essential to revenue cycle management. Those unpaid $10 or $20 co-pays that your billing team doesn't follow up on can add up to significant money over the course of a year.
An increasing number of practices collect co-pays when the patient signs in for his or her appointment, which increases the co-pay collection rate while making patient out-processing simpler. Having a written financial policy, communicating it to patients, and following up to ensure co-pays don't go uncollected can have a measurable positive effect on your revenue cycle management.
4) Measure Key Performance Indicators
Are you (or your practice manager) regularly measuring key performance indicators (KPIs) that indicate the health of your revenue cycle management? If not, you should be. When you select and measure KPIs and monitor those measurements for trends, you can more easily see where improvements are necessary and will be of most benefit.
Some of the most common KPIs tracked include:
5) Stay Current on New Codes
What if we told you there was a way to potentially earn tens of thousands of dollars more from Medicare all while improving patient care? CMS has developed and implemented new payment strategies within the Fee-for-Service Medicare Physician Fee Schedule (MPFS) over the last decade that will help with the primary care business model and hopefully encourage more medical student to pursue primary care. Most importantly, the new payment strategies aim to encourage primary care services to the aging population and patients with chronic conditions.
Transitional care management services (99495 and 99496), advanced care planning (99497), chronic care management (99490), and an initial wellness exam (G0438) can increase your practice's revenue significantly.
While there are some obstacles in billing for these codes, they are minor compared to the significant amount of revenue that can be gained from using them. Practices that bill for all 6 of these new codes approved by Medicare can potentially increase their revenue by six figures, or more.
6) Check Your Fee Schedule
What if I told you that your practice is missing out on revenue because of an outdated fee schedule? Would you know how to fix it? Unfortunately, many practices are losing revenue because of their fee schedule and they don’t know that updating it would improve their bottom line.
Know, at minimum, what Medicare allowables are. If you’re charging less than what Medicare allows, you may develop a false sense of prosperity since you’re collecting 100% of what you’re billing commercial payers, many of whose allowables are higher than Medicare’s.
And, of course, if you’re charging a payer less than the allowable, you have no sure way of knowing how much you should have billed out. You should make revisiting your fee schedule a regular practice to make sure your billed charge is higher than the allowed amount. If your billed charge is equal to the allowed amount, you’ve billed too little and left money on the table.
[Also: Fee Schedule Dos and Don'ts]
7) Focus on Denial Management
According to CMS, a full 30 percent of claims are denied or ignored on first submission. 70% are payable if resubmitted correctly. However, 60% of claims denied on the first submission are never resubmitted.
Use data from your denials to improve your processes and redesign your revenue cycle management. Find out the source of the denial first. Claim denials are often caused from a registration error, lack of medical necessity, insurance verification not performed, charge entry error, documentation to support the claim is not there, etc.
Measure your practice’s denial data and find out the source of the denial. Identify the top three to five reasons for your practice’s denials and take action. Less than 5 percent of claims should be denied on the first submission and your practice can make the necessary changes internally if denials are being caused due to practice errors. If payer errors are causing a high denial rate, you will need to make sure that your staff understands the payer’s reimbursement policies.