Cheat sheets should be given to the front offi ce with questions to ask the patient and the insurance company to check eligibility and benefi t information. Denial guidelines for the physicians allow them to take measures when billing certain CPT and ICD codes. Finally, the reports should be available for the physicians and offi ce
Chittaranjan Mallipeddi is CEO of MedPlexus, Sunnyvale, Calif. For more information on Medplexus solutions: www.rsleads.com/004ht-203
manager, which gives them a quick snapshot of the billing and accounts-receivable status.
Third is the technology in place to collect and manage revenues. The system should provide excellent reporting capability, a robust rules engine confi gurable for each payer, ease of use and fast data-entry capability. At a minimum, the system should be able to answer: • if all patient encounters are being billed in a timely manner (or maybe not at all);
• if all co-pays are actually being collected; • if treatments were appropriately preauthorized; • if excessive write-offs that make accounts receivable look good are at the expense of income;
• if the organization is getting critical information about payer performance;
• if denial rates are too high; • if there is a higher percentage of patient responsibility, costing time and money in collection; and
• if a payer is paying more or less than other payers for the procedures performed.
The payer side of the revenue cycle has several red
fl ags, areas that could prove problematic for implementa- tion. Two questions to answer are: • Is the payer offering payments in line with industry standards?
• Is the payer holding money for an extended period? The RCM technology put in place will no doubt allow electronic claims submissions. To signifi cantly reduce denials, however, which are one of the most common sources of revenue leaks, those claims need to be properly coded; authorization should be determined and eligibility verifi ed. By creating these rules beforehand in the system, denials should go down.
Another common mistake happens after the payer returns the bill. Healthcare providers often take far too many write-offs. With a revenue system in place, the uncovered portion of the claim returns from the payer. Follow through on collecting the remaining balance is important, as is taking advantage of reminders from the system to remain diligent.
Impacts on revenue stream
Patient interactions can create missed opportunities for increased revenue. One straightforward obstacle to successful RCM is that healthcare providers can be
too lax in collecting co-pays. If the underlying technol- ogy handles the co-pay and patient portion properly, it again circles back to the business processes. Co-pays for a routine offi ce visit can vary, and those will add up quickly and impact the revenue stream. In addition, the front offi ce should collect the patient’s previous bal- ance, which has been proven as the best way to increase patient collections.
Another missed opportunity is integrating the RCM system with the EHR technologies in place. The EHR can offer reminders specifi c to each patient on matters of individual care. If the insurance requires an eye exam
The system should provide excellent reporting capability, a robust rules engine confi gurable for each payer, and ease of use and fast data-entry capability.
every year for diabetes patients, for example, the pro- vider can proactively conduct the exam and effi ciently process the billing. The integration can increase revenue, and also allow the provider to offer a greater level of preventive care.
Before starting an RCM program, establish a baseline of metrics in order to measure future success. Some fac- tors that are strong performance indicators include: total income, days in accounts receivable, denial rate, revenue per employee and total value of write-offs. By comparing these same numbers 60 days, six months or even a year after implementation, a fi nancial picture will begin to appear of the effectiveness of the system. Using these same metrics, a recent case study showed that with the implementation of a full revenue-cycle management program, a subspecialty physician practice increased practice income by more than 28 percent. In six months, the program was able to: add an additional $38,000 to $42,000 collections; reduce old accounts receivables from $385,000 outstanding to $68,000; and decrease the denial rate from 21 percent to 3 percent. This is the kind of measurable success that should be expected from implementing revenue-cycle manage- ment. The key is building a robust program that avoids the most common problem areas at the provider, payer and patient touch points.
THIS MONTH ON HEALTHMGTTECH.COM
For more information about revenue-cycle manage- ment solutions, check out the Revenue-Cycle Manage- ment microsite at www.healthmgttech.com.
HEALTH MANAGEMENT TECHNOLOGY
April 2010 25
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