4 Ways to Improve Your Game Plan for Revenue Cycle Management
Medical practices are facing increasing financial challenges and revenue cycle management is a key performance parameter. According to recent reports, the five major national payers differ greatly in the average time they take for payments and in their denial rates. This means medical practices are at their mercy when it comes to collecting revenue. Interestingly, less than 15 percent of providers use advanced predictive tools to assess patients’ payment ability. Engagement about billing is highest at the front desk, and without these predictive tools, the staff is limited in their ability to have meaningful financial discussions with patients. Here are 4 key strategies to take your revenue cycle performance to the next level.
- Identify Inefficiencies
Missing documentation and errors in prior authorization are some of the most common culprits that slow down the workflow at a medical practice. It is important to examine the revenue cycle workflow to determine the weak links. Automated tools help physicians and staff by prompting them regarding documentation for prior authorizations. This makes the workload lighter and speeds up the approval process.
Payer contracts should be updated regularly, ideally every two years. This ensures that reimbursement rates are in line with current trends. During the negotiation process, do not simply look at rates, but consider the points of inefficiency and explore ways to address them.
- Tighten Accounts Receivable
A recent study by the Advisory Board indicated that even the best-performing medical practices have shown a trend of worsening accounts receivable (A/R) since 2011. Accounts receivable has a direct impact on cash-in-hand and cash flow. These two entities directly influence the financial health of a hospital or medical practice.
One method to lower the number of days in A/R is to perform daily denials work. This means diligently sending appeals for denials, identifying patterns, and providing billers with ongoing education. The most common reasons for a claim to be denied include lack of coverage, an inadequate verification process, registration errors, and lapsed deadlines.
- Clinical Documentation
In the absence of complete clinical documentation, the chance of assigning an inaccurate code is high. This staggers the revenue cycle due to the need to resubmit the claim with the correct code. Clinical documentation improvement (CDI) tools are a wise investment because they ensure proper documentation, accurate code captures, and compliance with rules and regulations. Studies have shown that while inpatient CDI tools are universally accepted, only a third of practices employ outpatient CDI tools.
Certified coders are critical for accurate documentation. Specialties such as family practice, neurosurgery, and orthopedics have frequent coding updates and can especially benefit from such tools. Pain management practices are subject to intensive scrutiny due to the need to manage opioid medications, and such clinics can also improve revenue cycle management with accurate coding.
- Collection Policies
If you have not reviewed your patient collection policy in the last couple of years, consider a reassessment. High-deductible plans have had a significant influence on the ability of patients to meet their financial obligations for medical care. In fact, a survey found that more than 80 percent of small practices (with fewer than five physicians) have experienced delays in collections from patients who are insured under high deductibles.
Updated financial policies place medical clinics in a better position to communicate and financial information to patients in a meaningful manner. When patients understand payment plans and financial options in advance, they are more likely to pay their outstanding bills on time. Advance modeling tools predict patient’s ability to meet their financial obligations. This gives staff the opportunity to tailor payment plans to their specific patient population.
In this day and age, when medical practices face a challenging financial management scenario, it takes a little creativity and a lot of determination to improve the game plan for revenue cycle management. Ultimately, this allows organizations to improve outcomes and quality of care, which are key parameters for success.