Healthcare is a notoriously fluid industry, with operations depending upon socio-political climates, technological advances, and reimbursement models. With so many contingencies, administrators and providers alike may struggle to navigate perpetually elusive concepts such as revenue cycle management.
Throughout the years, we have witnessed a number of shifts in these models, many of which have decreased payer reimbursements and caused a domino-effect of issues for both individual profit margins, and healthcare as a whole. In order to effectively manage the revenue cycle, it must first be understood in its most recent incarnation. Revenue Cycle Management (RCM), can simply be defined as a series of transactions, both administrative and clinical, that occur in order to capture and collect patient service related revenue, and how they are executed and/or managed. This definition is great in theory, but what does that really mean in 2017?
RCM is on the rise, and it’s no surprise considering that nearly 70% of providers reported that it takes one month or longer to collect full payment from a patient . The life cycle of payment is a detriment to the care providers who must recognize they cannot simply rely upon prompt payments. This, in conjunction with claims denials and uncompensated care can propel practices into unsavory financial states. The passive approach of revenue cycle management (bill claims, hope for the best) is dangerous, and should be abolished completely. This is the first step in optimizing the revenue cycle.
The second, and perhaps most integral step of optimizing the revenue cycle involves the identification and subsequent prevention of claims denials. Claims can be denied for a myriad of reasons, but it often comes down to two simple, avoidable errors: claims defects, and insufficient documentation.
In the payment cycle, claims and medical records are simply data transportation devices identifying the who (patient), the when, the what (coded procedure), the why (coded diagnosis). If any of these elements are missing or poorly documented, the claim will more than likely be denied. This is a conceptually easy list of key components, but there is more to it. Some of the most popular claims data errors involve authorization forms, incorrect NPI numbers, misuse of modifiers, and missing referral documentation. It is imperative to recognize all facets of an admissible claim, and to consistently deliver the level of detail required. 65% of denied claims go un-appealed , which means that financially, an insufficient claim is costly in time and money whether it is appealed or left denied.
As a provider or practice leader, there will always be competing responsibilities. Claims documentation can be a time-consuming endeavor, and a daunting task to say the least. This is where we can turn to technology. Reluctant as some practices may be to adopt new technologies, they can deliver incredible ROI. Remember that RCM is dependent upon every phase of the care process, from appointment planning to claims submission. This means that even small steps, such as automating appointment reminders and electronic insurance verification can condense the payment cycle, accelerating patient processing and payment. The utilization of a quality EHR software can help practices effectively document the details of a visit, and facilitates proper use of diagnosis and procedural codes. These notes can be viewed by billers, while eliminating the problems presented by illegible paper records.
If your practice is doing well financially, but is looking into preventative technologies, there are also advanced practice management systems that have “smart” claims editing functions. These systems protect the integrity of claims data while ensuring the documentation is sufficient, prior to submission. Optimizing the revenue cycle is not a simple task, rather a series of tasks that must be considered and completed to maintain the financial health of your practice. Much like any lifestyle change, making small, progressive steps will create less upheaval, and deliver higher success rates.
Start small, and remember that a penny charged is not always a penny earned.
About the Author: Ms. Candia holds five national certifications in the field of medical coding, billing, auditing, and healthcare compliance from the American Academy of Professional Coders (AAPC). Her proficiency in evaluation and management, quality control, abstraction, and clinical documentation is met by a desire to improve the billing and coding techniques of coding professionals, physicians, and healthcare support staff.