From a transitioning coding system to new regulations in value-based care and rising costs, the changing landscape of the U.S. healthcare industry is facing pressure to lower healthcare costs, while also improving the patient experience.
These conditions impact hospitals and small practices alike, and the shift from full insurance reimbursement to high deductible plans and increased patient responsibility has only highlighted the need for an effective revenue cycle. More than 95 percent of healthcare providers reported inefficient billing processes, which causes them to implement backend efforts to reconcile their bills at the end of the year.
With all these changes, every healthcare provider, from an extensive hospital network to a small private practice, benefits from improving their revenue cycle management to reduce inefficiency.
Understanding the Role of Revenue Cycle Management
In the healthcare industry, revenue cycle management is a business process that manages claims processing, payment, and revenue generation, as well as using specific technologies to track the claims process at each point in the cycle.
The revenue cycle involves numerous steps in the billing and collection processes, all of which need a methodical approach to confirm eligibility, account balances, scheduling, deferred services, and cost transparency to eliminate inefficiencies in the system.
Time management and efficiency play a vital role in revenue cycle management as well, and streamlining these processes is the best way a practice can improve the delivery of healthcare in their organization and maintain a successful practice with satisfied patients.
To help with this process, we’ve identified the most problematic revenue cycle management issues for medical practices, as well as some ways to fix them.
Inaccurate coding and inefficient billing processes can amount to tens of thousands of dollars in lost revenue, and this is partly due to the large staff that’s involved in the process.
Revenue cycle management works like an assembly line. Every staff member does part of the work, then it is moved forward to the next part of the cycle. Each member of your staff needs to be educated on the specifics of their role in this process and understand their responsibilities fully, as well as the overall impact on the bottom line.
Revenue cycle management tools, such as billing automation and card scanners, can significantly reduce human error, assuming that the staff is educated in their functions. Furthermore, advanced revenue cycle management systems, which are designed to optimize the cycle, are only as good as their operators.
Ultimately, these issues and inaccuracies come down to effective communication, which is another vital component of a smooth revenue cycle.
In a perfect world, physicians would be able to focus on the clinical aspects of their practice and leave the financial aspect to their budgetary team, but that’s rarely the case.
A private practice physician needs to be every bit a businessman as a medical professional, which means that they need to stay involved in their own revenue cycle process. Small issues can quickly result in lost revenue, so effective communication between the physician and his financial staff is a crucial part of streamlining this process.
Fortunately, there are simple ways to solve this problem. Regularly scheduled meetings between the physician and financial staff to review billing, collections, practice revenue, and any other concerns in the revenue cycle are an excellent start, and remotely-accessed periodic reports further enhance the awareness and transparency of the system.
By keeping a steady flow of communication among the staff, it becomes much easier to identify inefficiencies in the revenue cycle and make necessary changes.
Consistent Workflow Processes
Consistency is important in all aspects of business, but a consistent workflow process is essential to efficient revenue cycle management.
Your front desk is the first phase of this workflow process and leaves a considerable margin for error. Efficient practice management software should collect patient data and insurance information, track and balance appointments, and provide automatic insurance eligibility verification to ensure that no financial issues arise with patients, there are no appointments unaccounted for, and there is no revenue lost.
Your electronic health records system is another area that can disrupt the workflow. Electronic health records improve patient care by enabling sharing among clinical workers. When this data can’t be easily shared, it directly impacts patient care, undermines efficiency, and ultimately affects the revenue cycle.
Within a revenue cycle management system, electronic health records allow a physician to determine if a procedure will be covered. If it appears that the claim will be rejected or the patient is unable to pay, it will explore alternative options. This system also reduces inaccuracies or errors that could affect care, delay payment, or result in non-payment, as well as providing revenue projections for financial professionals to analyze in real time, as opposed to estimations.
Inefficient accounts receivable follow-up can also be a detriment to the workflow process. This is an area that can be bogged down by outdated patient information, old billing, outstanding balances, and failed follow-up.
Be sure to have your front desk staff update information for existing patients, find and remove data from deceased patients, or patients that left your practice long ago, and record small balances from deceased patients or defunct payers as losses.
This is also a good time to check for outstanding balances and run reports on collections trends. Train your staff to collect payment on the day of the appointment, whenever possible, notify patients of their outstanding balances prior to their appointment, and transfer patients with a delinquent payment to the billing department if they fail to pay, while you run reports on collection performance to identify and correct any weak points in the system.
Continue to Learn and Adapt
Each step in the revenue cycle management process has the potential for errors, inaccuracies, administrative waste, excess paperwork, and lost revenue. With the healthcare industry undergoing so many drastic changes that impact the revenue cycle, physicians, and their staff need to be prepared to learn and adapt to these conditions, even if it means a major overhaul of the existing workflow, in favor of something new.
Managing healthcare as a business, through improvements in the revenue cycle management process, allows healthcare providers to reduce costs and recover lost revenue for a more efficient and profitable practice.
The National Physicians Conference recognizes these challenges and offers specialized tracks in improving physician office efficiency. By providing you with insight from successful strategists and the latest technological advancements, NPC equips you with the necessary tools to optimize your practice. Learn more at www.npcmd.org.