Practices that are successful technology adopters consistently outperform their peers.
We’re in a time of transition in the healthcare industry; unfortunately, these transitions are going to weigh heavily on providers’ revenue flow. Many of you have likely experienced claims rejections and payment delays as the industry converted to 5010, and the next major transition to the ICD-10 coding system is going to be even more challenging.
It isn’t unusual for a medical practice to report a gross collection rate of 60 percent or less (MGMA’s Physician Billing Process: 12 Potholes to Avoid in the Road to Getting Paid, 2nd Ed.). That means for every dollar billed, the physician receives a return of only 60 cents. This lack of return combined with ICD-10’s predicted hit to cash flow and staff productivity means it’s even more vital to get your revenue cycle in shape.
According to a LarsonAllen study, practices that are successful technology adopters consistently outperform their peers from a cost and revenue perspective and collected more than half of outstanding receivables in 15 days or less, compared to only 9 percent by those who used technology less efficiently.
While there are a number of steps you can take to maintain a healthy revenue cycle (see sidebar), there are a few key areas where you should focus to experience the biggest impact.
Patient responsibility
Patients are now responsible for a larger portion of their payment, and it is important to check patient eligibility and collect patient payment at the time of service.
- Using tools to check patient eligibility prior to the appointment is the most important task you can do to impact revenue. Yet only 79 percent of practices report checking eligibility, and only 24 percent check it every patient visit (LarsonAllen’s Physician Revenue Cycle Gold Standard Study, 2010). Clearinghouses and payer websites can cut down the time it takes to check patient eligibility.
- Collect the patient payment at the time of service. Sending statements costs money and staff time, and practices are much more likely to get paid when the patient is still in the office. High-performing practices are better at collecting co-payments, deductibles and co-insurance from the patient at the time of service because they use technology to calculate patient responsibility (LarsonAllen’s Physician Revenue Cycle Gold Standard Study, 2010).
- Practices should educate patients about their balances and offer alternative financing options, so they are less likely to receive late or incomplete payments.
Eliminating claims errors
Another common cause of incomplete reimbursements is the failure to catch and correct rejections in a timely manner.
- To avoid major payment delays, your practice should correct any claims rejections within 48 hours of submitting the claim. Get proactive: Develop a process to identify and analyze your most common rejections.
- Identify the number one rejection for your practice and focus on how you will eliminate that error by adjusting coding, educating staff on proper coding or changing the billing process. Once you have done this, continue to eliminate rejections in the order that they impact the practice.
- Bill correctly the first time. On average, it costs $40 in staff time to rework a denied claim, a cost that can add up quickly if your staff has to correct many claims each day (Susanne Madden’s Cost to Appeal Denial analysis, The Verden Group).
- Auto-post electronic remittances, which are more accurate and help staff reduce time spent posting payments.
TIPS TO MANAGE REVENUE
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