Effective revenue cycle management is fundamental to a successful practice. Keeping track of incoming payments, claims submissions and denials, and healthcare collections make up the essential tasks of good revenue cycle management, and each aspect contributes to a steady stream of revenue for sustaining a practice. Failing to uphold and manage these aspects can lead to financial ruin.
If your practice is experiencing any issues with its revenue stream, checking your revenue cycle management is the right place to start. Your practice should already have certain policies and procedures in place to ensure that the revenue stream isn’t encountering any stutters or barriers, but a regular check-up is always necessary. You never know when a clog has stopped up your system or if a smaller issue that might grow into a larger one is starting to develop. Recognizing potential barriers and preventing them from taking route can help keep your practice running smoothly and efficiently.
As you review your revenue cycle management process, consider the following three potential barriers. For most practices, the source of a financial issue can be traced to one of these causes and can be resolved quickly when recognized:
Failing to make good use of the front desk.
All patients have to travel by the front desk in order to see any medical professionals. This is typically a check-in and management point for patient visits, but it’s also the gateway for care. Any co-pays or past due payments should be immediately addressed whenever a patient reaches this point. Co-pays should be handled up-front to prevent patient responsibility costs from going unpaid. Any past due amounts from unpaid claims or unanticipated costs should be discussed and a payment arrangement should be agreed upon before the patient receives care. This is not at all a suggestion to deny care for any reason, but more to ensure that you, the care provider, communicate thoroughly with the patients to ensure that they understand their responsibilities and the obligations they agree to in order to cover the cost of care. Complete disregard for past due bills, however, would have to be addressed. Your practice should have a plan in place to address repeat offenders.
Dropping the ball on denials.
Filing and responding to claim denials is a much neglected aspect of effective revenue cycle management. It is time-consuming, challenging, and—frankly—a bit of a nuisance. However, claims are a major source of funding for any practice. Having a knowledgeable and capable individual or a team of individuals to file claims, as well as a process for following up on unpaid claims, is vital for sustaining an effective revenue stream. Filing correctly the first time prevents the need for additional time to be directed towards refiling, but, of course, not every claim will be accepted on the first try. It’s important for practices to recognize this and, yes, to strive for a high percentage of accepted initial claims, but practices should also recognize that they will have at least a small amount of denied claims that will have to be refiled quickly in order for them to be accepted and ultimately paid.
Ignoring the numbers.
A final essential component to effective revenue cycle management is constant monitoring of the revenue stream and of healthcare collections numbers. Your practice should be running reports on a monthly basis to determine overdue balances, costs for the month, funds that should have been collected for services that month, and the actual dollar amount collected that month. These reports are essential for determining the health of your practice and monitoring its growth. Using these numbers, you can focus your approach to improving revenue on the areas where your practice is most falling short of expected totals. Every business monitors monthly revenue based on projected goals, costs, and actual funds received. As a healthcare provider, your practice will have the added aspect of monitoring claims denials, paid claims, filed claims, etc. Each of these aspects should be reviewed monthly, with larger more detailed reports being run at least every six months, and then once a year. These reports track progress and trends and are vital for good decision making over both the short and long term.
While revenue cycle management can be a major challenge, taking a good look at the three areas above and making a few simple changes to how you approach managing your revenue stream can make a huge difference in your bottom line.