Keep RCM in check
By Dawn Duchek, May 2012
Practices that are successful technology adopters consistently outperform their peers.
Weíre in a time of transition in the healthcare industry; unfortunately, these transitions are going to weigh heavily on providersí 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 isnít unusual for a medical practice to report a gross collection rate of 60 percent or less (MGMAís 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-10ís predicted hit to cash flow and staff productivity means itís 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.
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 (LarsonAllenís 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 (LarsonAllenís 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 Maddenís 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
- Identify one staff member to review insurance payments.
- Review explanations of benefits (EOBs) and electronic remittance advice (ERAs) to address delays, denials, etc.
- Analyze reason and remark codes on payment adjustments, so you can address them quickly.
- Verify patient insurance eligibility prior to each visit to ensure accurate claims.
- Keep copies of fee schedules and health insurer contracts, or store them in your practice management system.
- Create a plan to upgrade your electronic transactions to comply with ICD-10 updates before the deadlines.
- Meet with your claims processing team regularly to evaluate your workflow for ways to improve efficiency.
- Submit claims and statements.
Receive remittance advice files and reports. Balance claim files against totals from your practice management system. Manage primary and secondary rejections, including correcting and re-submitting claims. Post remits in your practice management system.
- Verify that rejected claims have been corrected and re-filed.
- Analyze claim rejections to spot and correct common errors.>Ensure all claims have reached appropriate payers.
- Balance claim statistics to create a performance snapshot.
- Compare your office performance to industry benchmarks.
- Share news on industry trends and changes with staff.
About the author:
Dawn Duchek is industry initiatives coordinator, Gateway EDI. For more information on Gateway EDI, click here.