The title of the article may look unrealistic but you may find an answer towards the end. Revenue Cycle Management (RCM) has been a problem area for many practices and most of them leave the money on the table without even realizing that they have a problem. An assessment of your practice operations would help you re-engineer your operations and align them with your strategic and tactical needs. By understanding the common issues in RCM, followed by a systematic approach to identifying your own needs, you will be able to define the right kind of RCM strategy for your practice.
Common issues with the healthcare Revenue Cycle Management
Many of the physician’s offices are struggling to stay ahead of patient billing. If you are one of them then you need to take a look below to see if you are encountering any of these problems.
- Lack of trained staff: Who would like to lose hard-earned revenues through simple mistakes? Even if you have employed the RCM technologies, these tools would only be as good as the people using them. Your revenue cycle is like a supply chain; a simple mistake by a person gets magnified as it moves through the entire cycle and adversely affects your bottom line. Incorrect patient demographics/insurance information, incomplete eligibility verification, coding errors, or simply a failure to understand the importance of one’s job and its effect on the revenue can result in the repetition of costly mistakes
- Lack of effective monitoring and communication between staff: While the typical day in the office can be extremely busy, it is critical that everyone understands his/her role in the office’s revenue cycle. Therefore, physicians and office managers must have adequate communication and financial reports including A/R, denials, collection, and revenues must be reviewed during weekly/monthly meetings. The corrective actions must be identified and communicated to each individual based on their role.
- Payer requirements keep changing: Payer requirements keep changing and keeping up with different payer policies is a challenge. RCM team members must have a clear idea of these requirements and update their systems constantly. Failure to do so might lead to the additional administrative time and delayed payments. In order to avoid this, providers can utilize guides published by the payers and create their own centralized knowledge base and automated systems. Alternatively, the providers can rely on outside RCM companies for their expertise, tools, and time to handle thousands of claims based on payer-specific policies.
- Inefficient Accounts Receivables (A/R) practices: Account receivable is a vital part of any business. Many practices do not employ diligent A/R follow-up practices, resulting in a large amount of money being left on the table. Improper insurance coordination, lagging collection times, and inconsistent follow-up are the contributing factors that adversely affect your revenue cycle. Write-offs need to be handled carefully and must not be used to make the A/R figure favorable at the cost of overall revenues. However insignificant is the write-off amount, when they accumulate over the period it affects overall income.
Checklist to identify problem areas in your RCM process
The above-listed problem areas in the RCM process may be common to many practices. However, identifying your own pain points is crucial before making a decision. Here is a simple checklist that would help you evaluate your practice operations:
- Does your staff collect the patient co-pays in timely manner?
- Are the patient eligibilities verified before the patients walk into the office?
- Are treatments appropriately pre-authorized?
- Are all your patient encounters being billed in a timely manner?
- Are you getting paid timely and appropriately?
- Do you find a lot of coding errors, which could have been easily avoided?
- Do you see your staff making the same mistakes again and again?
- Do you have a high denial rate?
- Do you find specific payers paying less as compared to other payers for the procedures you perform?
- Are you taking unnecessary write-offs in order to make your A/R look good at the expense of your revenues?
- Are you getting critical information about your payer performance?
- Are your patients paying in a timely fashion?
- Do you have a high percentage of patient responsibility, which is costing you additional time and money in the collection?
- Do you spend more than 4% of your revenues on the management of your RCM operations?
Finding a solution for your Revenue Cycle Management
Once you go through your checklist, you will be able to identify the improvement areas falling into three broad categories like People, Process, and Product (or Technology). You can then focus on the areas where you need help. The chart below displays the required strengths under each category, in order to optimize your Revenue cycle.
If you find that the responsibilities of the revenue cycle have become overwhelming and conflict with other office duties (Staff Management, keeping up with government programs such as MACRA, or other administrative tasks), it should not keep your office from becoming financially efficient. If you are interested in optimizing your revenue cycle, consider a Revenue Cycle Management company that will collaborate with you to get the most out of the volume of patients you are seeing. It is important that you find a partner who caters to your specific needs and works as an extension of your office, rather than working in isolation. The partner who is flexible to align the RCM services to your strategic and tactical needs and reengineer your entire Revenue Cycle Management process or individual processes. Usually, good RCM companies charge a fraction of what you earn and at the same time get you an assured increase in your revenues.
This way you will be able to exploit your core competencies and focus on what you love the most, i.e. providing the best patient care; and leave the rest of the burden to your RCM partner, who will help you strengthen the financial health of your practice. You can achieve both your clinical and financial/operational goals at no additional cost to you. Does it look like you CAN have your cake and eat it too?