As a physician, the most important aspect of your practice is likely providing excellent care to your patients. But all the good patient care in the world will mean nothing if your revenue cycle collapses and you have to close down.
Indeed, over time, a malfunctioning revenue cycle can drag your practice to a halt. So, it is important to periodically evaluate it and make any adjustments necessary to keep it operating well.
Assess strengths and weaknesses
A good way to start a review is to determine whether your revenue cycle management system includes the current best-in-class components and, if so, how well they are working. If it does not, you will need to assess the costs of upgrading the system.
Just like your patients, your business needs an annual checkup. 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 collections. Ask yourself questions such as: Does my practice determine patient insurance eligibility consistently and accurately? Do we collect appropriate co-payments, deductibles and overdue balances in a timely and efficient manner? To accomplish these tasks, you need clear collections policies that are uniformly enforced.
Related Read: Keys to Improving Your Revenue Cycle
Maximize revenues, avoid violations
Next look at your coding process. The goal here is to maximize revenues without committing compliance violations. Doing so calls for close communication between the doctors performing the medical services and the staff assigning codes to them. So, how close to that ideal does your practice come? How well do the physicians and coding staff interact?
When the practice learns that a claim has been denied or a payer has taken any adverse action, it must take corrective action to reverse the denial or prevent similar problems in the future. Does the practice have a systematic appeals procedure that is triggered automatically and effectively addresses denials or other issues?
Nearly all payers now allow electronic claim submission, status inquiry, and eligibility and benefit verification. Most enable electronic prior authorization, claim payment and remittance advice as well. Every practice should work to take advantage of these opportunities to increase accuracy and productivity, while reducing costs.
Use the correct metrics
In a modern medical practice, business performance is measured with precision by gathering and analyzing the right kinds of data. If there are problems, correct metrics will point to the causes.
To keep revenue cycle functions operating at peak effectiveness, it is essential to gather, report and analyze numbers about their performance. Here are some critical data points to track:
- Gross and net collection percentage;
- Accounts receivable aging, including accounts over 90 days past due;
- 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 vs. total scheduled patients;
- Average number of missing charges vs. services rendered (actual and CPT mistakes);
- Percentage of denials vs. total claims filed;
- Percentage of denials appealed successfully vs. total denials; and
- Average days between receipt of payment and payment posted.
Run reports on these numbers monthly in an easy-to-understand format (using a digital dashboard, for instance) so you can identify and correct problems. Some of the problematic data points could be easy fixes, but certain trends can indicate more serious underlying issues.
Related Read: Help Your Bottom Line: Focus on Your Revenue Cycle
See the big picture
Successful management of the revenue cycle also depends on fostering a culture of respect for and awareness of the practice’s finances. When this cultural value exists, the workplace is transformed. Employees see how their work supports, and is supported by, other staff members.
Each person’s role should contribute to the financial strength and stability of the practice. Employees need to recognize the importance of a single, integrated and efficient revenue cycle management system.
Get good advice
As a physician, your forte might not be on the financial side of things. But, regardless, you have a responsibility to ensure your practice can sustain itself financially over time and hopefully grow. An integral part of that success is a proficient revenue cycle. Your financial advisor can help.
If you would like more information, contact Kelly Buchheit at [email protected] or 312.670.7444. Visit ORBA.com to learn more about our Health Care Group.