Practicing effective and consistent revenue cycle management is a goal every healthcare organization strives for. Unfortunately, it’s all too easy to make simple mistakes that can disrupt your practice’s revenue flow and cause problems for your bottom line.
While many of these problems may seem small—and if they only happened once or twice, they might be—they can pile up if not properly regulated. A good revenue cycle management plan includes processes to ensure that the appropriate procedures are followed 9.8 times out of 10, as failure to take the right steps can compound the problem and end with claims being left unprocessed or overdue bills uncollected.
Below are the 3 most common revenue cycle management mistakes that practices can easily avoid by taking proactive steps.
One common mistake practices make is not verifying eligibility up front. One study, performed by Caparo, indicated that nearly 25 percent of practices failed to verify eligibility up front. Without eligibility verification, these practices may be providing services to patients whose insurance will not cover the cost of care.
By insisting on eligibility verification for every patient as part of your practice’s revenue cycle management policy, you could decrease future bad debt and help your patients by preventing them from accruing out-of-pocket costs they didn’t anticipate.
Another issue that can lead to serious financial consequences is providing inaccurate estimates for out-of-pocket costs or not providing an estimate at all. As copays increase and the cost of care continues to rise, many patients are finding that their financial responsibility for medical care has grown beyond what they can easily afford. For smaller procedures or preventative measures, the impact is minimal, but for larger procedures or issues that require long-term or chronic care, the financial impact on family budgets can be huge.
To achieve an effective revenue cycle management process, practices must consider this financial impact on the patients and prepare them as much as possible for these costs. In many cases, advanced warning of an upcoming financial burden can allow patients to set aside funds or find additional sources of funding to make costly procedures possible with minimal damaging consequences. Inaccurate estimates, however, can land patients in greater debt than they’re prepared to cover, leaving practices to deal with the unpaid costs and lingering bad debt as a result.
Probably the most easily preventable mistake is up-front collection of copays or establishing payment arrangements for larger sums. Copays may be minimal, but these small sums can add up and leaving those totals on the books can also create extra work and added costs while practice staff continues to mail statements or make calls to collect.
Communicating to patients that they will be required to cover copays and other minimal costs prior to service eliminates confusion and promotes healthy revenue cycle outcomes. Patients often respect payment rules easily when they are communicated up front. Failure to inform patients about these obligations ahead of time, however, can usually lead to frustration and resentment from patients. The conversation about this policy should take place immediately upon scheduling appointments or becoming a new patient.
Promoting an effective revenue cycle management policy within your practice, one that includes preventative measures for the mistakes above, will have a profound impact on your practice’s bad debt over time. Communicating with patients and staff is also vital for any policies you adopt to be successful, particularly as they relate to costs and payments. As you revise your approach to revenue cycle management, be sure to train your staff thoroughly on expectations and inform patients about your practice’s policies. The results will be worth it.