Does your organization’s cash flow suffer because of consistent errors within your Revenue Cycle Management’s Medical Account Receivable processes? If yes, then you aren’t alone, there are some most common issue that troubles many healthcare organizations and obstructs the objectives and goals of their financial health.
Accurate Account Receivable (AR) management can transform your organization’s cash flow from getting low to high. So, to seamlessly manage the Medical AR process healthcare providers and organizations must jump right to the solutions and fix these common problems and frequent errors.
Problem – Denial of the insurance claim
This is one of the most predictable and common AR problem affecting the healthcare organization’s cash flow. Various sources estimate that the average denial rate for healthcare industry ranges from 10% to 25% of all claims submitted. However, as per the report of the Medical Group Management Association (MGMA) the best healthcare organization should have a denial rate of only 4%. Therefore, the significant lost opportunity for recovering revenue owed to your organization or hospital can be resolved by making simple corrections.
Solution – You must ask your team of medical accounts receivable management to precisely review each claim form before submission so that it can meet the guidelines. You must follow up on all denied claims and investigate the missing values and determine what needs to be submitted.
Problem – Unnecessary write-offs
Some write-offs seem necessary, and others do not. Your medical account receivable management team should take a good amount of time to review each account. Mostly the team does not emphasize lower amount of payments, but some patients make payments in installments. If those small payments are not managed properly, then it eventually affects the balance sheet of your organization. Therefore, you must remember that a brief review of each overdue of patient account can lead to the reimbursement of your organization.
Solutions – Managing unnecessary write-offs
- You must determine, which write-offs would require managerial approval. This will help you to accelerate smaller or less contentious accounts.
- Planned monitoring and tracking of write-offs help you identify issues within your reimbursement policies and procedures. Tracking helps you identify the problem associated with the higher spikes.
- You must identify and create a strategy to reduce unnecessary write-offs. To define a successful strategy, you must review the past data and accordingly determine a benchmark of the average write-off rate. This will help you to set a limit for the annual write-offs that you can control.
Problem – Bad Debt
Rising bad debt is becoming the most common medical AR problem, whereas patient responsibility contributes to more than one-quarter of the healthcare industry’s revenue. Earlier patient’s responsibility was only at the time of service, but now it is no longer enough to discuss patient responsibility only at the time of service. In order to improve patient collections, it is critical to collect payment during the entire revenue cycle.
Solution – To keep away from the bad debt, your healthcare organization must gather all the necessary billing, insurance information, and calculate the expected out-of-pocket costs before providing the service to the patient. So, by verifying that coverage, the patient would understand the scenario and agrees to their responsibility.
Providing this kind of comprehensive billing experience will dramatically improve the likelihood of payment, and helps maintain a good relationship with your patient and ensures that they have positive billing experience.
Problem – Collections Culture
Consider your healthcare organization: Do you have a good collections culture?
Healthcare professionals pledge to help patients, not to collect money from them. You might be good at providing better patient experience but collecting money isn’t your cup of tea, right? But getting paid for services provided is also crucial for maintaining a successful practice, and continuing to provide care. Therefore, to make account receivable a priority, your healthcare organization must foster a good culture of collection.
Solution – To promote a quality culture of collection, you need to build the right team and provide them with the right training and tools to manage the successful collection.
Problem – Unmotivated staff
From healthcare providers to administrative staff, every individual of your organization must be passionate about their work and should help grow your organization towards your mission and objectives. If you are losing your accounting because of your lethargic staff, then you are losing it on both the side (salary and profit) and you can observe its negative impact on your organization’s account.
Solution – The ultimate solution is to outsource revenue cycle management and account receivable tasks to a trustworthy outsourcing partner, who will vigorously work on your desired requirements with the latest technology and dedicated staff. There are lots of benefits of outsourcing RCM services that your organization should compare with the benefits of having your in-house staff.
The healthcare industry is complex and managing various tasks at the same time is not easy. Overall cost reduction and efficiency are some of the top financial priorities for today’s health organization, but if your organization is surrounded by the problems that are associated with shrinking revenue and increasing expenses then you must reconsider the option of shifting those problematic tasks to industry experts. It will also give you extra bandwidth to focus more on your expertise that is – ‘offering quality healthcare’.
If you are considering outsourcing your revenue cycle management and accounts receivable tasks, and are likely wondering where to start? Don’t worry – you are in the right place.
iPatientCare, is a leading provider in transforming RCM services with FREE Cloud-based Meaningful Use Stage-3 certified EHR and PMS technology. It provides efficient, responsive, and accountable billing implementation and back-office services that give more than 98% first-pass claims submission and efficient AR follow-up, denial management at very competitive rates. To learn more visit iPatientCare’s Healthcare Revenue Cycle Management.