Revenue cycle management in your specialty-specific practice covers a broad range of administrative activities from scheduling an appointment to clearing the balance on the medical treatment rendered. More specifically, revenue cycle management encompasses the following:
- Appointment schedules
- Verification of insurance coverage, benefits, and eligibility
- Clinical documentation of all information needed for an insurance claim
- Medical coding
- Claims submission
- Payment posting
- Addressing insurance denials
Your revenue cycle is subject to internal factors (i.e. the number of physicians and nurses who are able to treat x number of patients, patient volume, and your own fee schedule) that are in your control (more or less) as a medical practice owner. External revenue factors in your revenue cycle include insurance reimbursements, patient co-pays, and out-of-pocket payments from patients.
The Glaring Downside of Revenue Cycle Management
Unfortunately, the medical billing procedures in our current healthcare system are rigged to work against the best interests of a medical practice. Insurance claim submission often results in delays and lengthy back-and-forths between the physician and payer over several months before the claim finally gets approved. Further, physicians don’t always collect deductibles and co-pays at the moment of service with patients – instead opting to bill and attempt to collect payment after the scheduled visit. Several weeks or months might go by before a healthcare professional is completely reimbursed for a particular clinical treatment.
Out of the three primary components that comprise your revenue stream (claims remittance, patient co-pays and deductibles, and patient out-of-pocket payments), compensation from insurance claims takes up most of the revenue “pie.” On average, specialty practices with established, efficient medical billing systems experience at least a 10% rejection rate on the first claim submission. Obviously these rates are higher for practices that haven’t totally nailed down their medical billing. With the ICD-10-CM deadline mere months away, these rejection rates are bound to increase temporarily. Additionally, a $25 claim resubmission rate at the minimum, reimbursements below contracted fee rates, and write-offs associated with managed healthcare make insurance claim management costlier than ever.
Timely compensation from insurance companies requires:
- Knowledge of the complicated guidelines and regulations specific to each insurance company that you work with.
- Expertise on contract negotiation with payers. You may want to hire an attorney or another neutral third-party expert who can assist you in contract negotiations.
- Hands-on training and experience with precise medical coding and filing deadlines of each insurance company.
- Denied claims management
- Constant oversight of insurance claims as they get sent to clearinghouses and payers to ensure that these claims don’t get misdirected, stalled, or lost along the way.
Dealing with insurance companies is an involved and time-consuming process. My suggestion is to partner with a third-party billing agency like PracticeForces that can take care of all this for you (shameless plug-in – I know…)
However, below are three tips on optimizing your revenue cycle if you conduct medical billing in-house, so that you may receive compensation more efficiently
1. Collect certain payments upfront – Develop an organizational system for collecting co-pays, deductible payments, and reimbursement from self-pay patients during the medical appointment rather than billing patients after their visit. Ask them something like “How would you like to pay for your …. (type of medical treatment) today?” instead of “Would you like to take care of the payment today?” I advise you collect payment prior to any elective medical services delivered.
If you encounter a self-patient who has a steep price tag for clinical treatment, work out a payment plan with them and collect at least a portion of payment (at least one-third) upfront.
2. Organize and delegate – What I often find in medical practices is that every employee at the front or back office does a little of everything, and everyone is responsible for everything. The net result: everyone runs around getting remarkably little accomplished. One truly effective way to resolve issues in your revenue cycle management is to delegate specific tasks to each staff member and make them accountable for task completion.
For example, Employee A schedules appointments, Employee B verifies insurance eligibility, Employee C does medical coding and submits claims, and Employee D handles insurance claim denials. Or some such combination -- which obviously depends on the number of staff and resources available to you.
Bottom line: develop an organizational workflow strategy that assigns individual staff to specific facets of revenue cycle management.
3. Integrate up-to-date EMR/EHR software systems – Studies show that physicians lose over $25 billion in reduced or denied claims annually because of inaccurate or inadequate medical documentation and records.
Cutting-edge EHR software enables you to maintain clear, thorough, and organized medical records for each patient, assists in locating the appropriate medical codes, scrubs claims of most errors before they are submitted through a clearinghouse, among many other functionalities. An EHR is actually your go-to tool for the bulk of your claim needs, making tracking and monitoring your revenue stream a whole lot easier.