Medical practices do an exceptional job taking care of their patients but often neglect their own finances. Yet, revenue cycle management is the single most important part of your practice except for your patients.
With the ACA pushing many patients into high deductible plans and insurance carriers reducing their reimbursements, you need to get it right all the time, every time from the start so that you get reimbursed for all services provided. It seems like an easy process, but practices all too often get it wrong. Revenue cycle from start to finish should be analyzed from the moment the patient makes an appointment and registers to the point in which you have a zero balance for services provided. Missing one step or making a mistake affects the entire revenue cycle.
Consistent analysis and training are the best ways to ensure you are reimbursed correctly. Every team member needs to know how important their piece truly is to the entire process, and they need to take ownership. As they say, it takes a village to raise a child ... well, it takes a team to ensure every step of the revenue cycle is efficient and complete. There are a number of areas where the revenue cycle can break down.
Many practices look to their data to make decisions and analyze their weaknesses. These reports often point to the account's receivables being outside the metrics set by the practice. When this happens, the billing team often feels the most heat, but practices need to look at the big picture of how receivables made it to that point. Oftentimes, the issue occurred much further back in the process ... long before reaching the billing team.
Was the wrong insurance information put in the system? Was an authorization or referral not received? Did we not collect a copayment at the time of service? Was the service coded incorrectly? These are all examples of a broken revenue cycle. Once a claim gets denied for the above reasons or a copayment has not been collected, the services are more likely to become bad debt. Practices need to foster a team environment between all clinical and business areas and encourage an open line of communication. Finger pointing and placing blame never is the solution. So how do you achieve this symbiotic relationship?
Data analysis is an important piece of this process. We all have copious amounts of data available to us, and we need to leverage it to find the root cause when an issue occurs. Reviewing reports from your practice management system can be your best defense against lost revenue. Often when I consult with practices about their broken revenue cycle, I find that not only are they not sure what reports to run, they in fact are not running any reports other than month-end reports. If that's the case, you'll find you are falling short with your revenue. Practices need to be running scheduling reports, missed payment reports, accounts receivables, fee comparison reports, adjustments, coding reports, as well as reviewing their denied claims. Any one of these important reports not analyzed on a routine basis could mean lost revenue.
Many times, running a report on a consistent basis ... such as an aging report ... can quickly identify an issue when it starts. Practices need to know what to look for and when. On an aging report, always look for large amounts that "pop" into a new bucket. If you have 25,000 for a certain carrier go from the 30-day bucket into the 60-day bucket, this could indicate you might have had a bad claim run that was missed during the routine review of daily processes. Catching this early is the difference between getting compensated and writing off the entire claim run for timely filing.
Daily processes are critical to the revenue cycle. Almost all billing department have become automated over the past 10 years, which is a double-edged sword. If you do not have clear checks and balances when sending claims, working claims, working denials, or posting payments, then claims will slip through the cracks. For example, a practice had one of their denial codes incorrectly created in their practice management system. It should have transferred the balance to the patient but instead was writing the balance off as contractual. It is vital that all auto-payment posting reports be reviewed for this type of mistake. Practices cannot afford for their billing teams to just 'post and go,' as it could cost the practice a great deal of money.
While due diligence with reports can assist with finding issues, nothing takes the place of good, old-fashioned communication. I recommend hosting meetings that included everyone who touches a patient account including the front desk, MA's, nurses, providers and billing. Take some real examples of denials that have happened and review them as a group to ensure everyone sees the results of not capturing the right ID number, not documenting an injection, or maybe even not collecting a copayment. Knowledge is power and team members cannot grow and flourish if they are not given the tools they need to improve.
By leveraging your data in combination with an open line of communication, a practice can easily fix a broken revenue cycle. If you are not sure where to start, best reports to run, or need an unbiased review of your revenue cycle, it is recommended to hire an outside consultant to assist with the process. Often an outside review will reveal the root cause of declining revenue and can get the practice back on track.
Kathi Carney, CPC, CPMA, CPC-I, is a Nashville-based industry consultant and principal at KCarney Healthcare Consulting. Carney, has nearly three decades of practice management, revenue management and coding compliance experience. She has been a speaker for NMGMA, SVMIC, and TMA and has provided education for many area practices for the past six years. For more information, contact email@example.com.