Do you know whether your practice’s revenue cycle management system is functioning at its peak potential? If not, your practice might be headed for trouble. To keep your practice financially healthy, you may want to assess the system’s strengths and weaknesses to make sure it is operating in a way that will maximize revenue and minimize waste.
A system review
Approach your system review by determining whether the system includes all the necessary components and how well the system is working. At least once a year, assess the practice’s strengths and weaknesses in a variety of revenue cycle functional areas.
For example, many practices struggle with patient collections. Ask yourself questions such as: Does the practice determine patient eligibility consistently and accurately? And, does it collect all appropriate co-payments, deductibles and overdue balances? To accomplish these tasks, the practice must have clear policies that are uniformly enforced. If policies are unclear or not fully established, then management should work to develop and implement policies that are well defined with clear roles and responsibilities. This will allow your practice to operate efficiently and focus on what is most important, serving patients.
An ideal coding process
The goal of an ideal coding process is to maximize revenues without committing compliance violations. However, this requires open and timely communication between the physicians performing the medical services and the billing specialists who assign codes to the services performed during the billing process. Ask yourself: How well and how frequently do the physicians and billing specialists interact?
When the practice learns that a claim has been denied or that a payer has taken any other adverse action, it must take corrective action to reverse the denial and prevent similar denials in the future. Does your practice have a systematic appeals procedure in place that triggers automatically and addresses the denial problem timely and effectively?
Nearly all payers allow claim submission, claim status inquiry and eligibility and benefit verification by electronic means. Most payers also enable prior authorization, claim payment and remittance advice via electronic transaction. Every practice should work to take advantage of these automation opportunities to increase accuracy and productivity, while reducing costs.
In a modern medical practice, business performance is measured with precision by gathering and analyzing the right kinds of data. If there are problems and the metrics are sound, the data will help explain.
To keep revenue cycle functions operating at peak effectiveness, it is essential to gather, report and analyze performance data. These are some examples of key data to gather and analyze on a regular basis:
- Gross and net collection percentage;
- Accounts receivable aging, including accounts over 90 days;
- Collections percentage by payer;
- The percentage of co-payments collected at time of visit;
- Number and percentage of patients with accounts receivable balances;
- How quickly visits/procedures are billed;
- Average days between claim submission and payer reimbursement;
- Percentage of insurance eligibility verifications versus total scheduled patients;
- Average number of missing charges versus services rendered (actual and CPT mistakes);
- Percentage of denials versus total claims filed;
- Percentage of denials appealed successfully versus total denials; and
- Average days between receipt of payment and payment posted.
As a best practice, these metrics should be tracked and reported on a monthly basis in an easy-to-understand format (such as a dashboard) so that you can identify and correct problems in a timely fashion. Most of the problematic data points should be obvious, but certain trends can indicate more serious underlying issues.
Assess and evaluate
You must be willing to periodically examine your revenue cycle and test it for possible weaknesses and potential problems in order to continuously improve. By doing so, you will ensure the system is working optimally and as intended. Your accountant can help by reviewing the processes in place to ensure the revenue cycle is operating effectively and with the appropriate internal controls in place to detect and prevent system breakdowns.
For more information, contact Kelly Buchheit at [email protected] or 312.670.7444. Visit ORBA.com to learn more about our Health Care Group.