Ensuring the most effective and efficient revenue cycle is a continuing challenge for most medical practices. Understandably, a practice needs to focus on improving performance and reducing costs in an extremely complex healthcare environment.
Healthcare Solutions WNY’s experience in working with our clients to maximize their revenue potential has shown us that in order to maintain a strong revenue cycle performance, a practice needs to avoid common mistakes. This will ultimately improve processes and result in a healthier bottom line.
Mistake # 1 – Relying on back-end rework to correct front-end errors
Although back-end clean up procedures can be effective in getting some types of claims paid, the processes occur too late for many of the most common errors: wrong, expired, or incomplete insurance information, no preauthorization, or non-coverage of service. To minimize rework, it is important to develop an effective preregistration and registration process that is focused on getting all the information required for correct and complete billing.
Mistake # 2 – Reporting Retrospectively
Providing staff with month end reports showing denials for insufficient information collected at registration, for example, is critical to identifying trends and focusing problem-solving initiatives but is provided too late to be actionable. The claim has already denied and the rework has already begun, sometimes resulting in forgone revenue. A better solution is to work with your IT department or vendor to develop reports or electronic indicators that will flag accounts that are most likely to be denied on the back end before the date of service. Technology may be so simple as to display those patients missing a preauthorization number or insurance information.
Mistake # 3 – Not confirming payment prior to service
With bad debt on the rise and increasing complex insurance requirements, it is imperative to confirm coverage prior to the service. This is easily done online with Healthenet, dedicated insurance plan websites or via the telephone. It is also important to confirm that the service scheduled is covered by the insurance plan and, if so, to what degree it is covered. Confirming payment prior to service is important for collecting revenue from not only insured patients, but also from self-pay patients and those who are responsible for a portion of their bill that their insurance plan does not pay.
Mistake #4 – Relying on post date of service billing and collections to pursue all patient payments
It is widely documented that practices can dramatically improve self-pay collections by requiring payment at the time of service. Even though a practice typically has a low percentage of patients who have no insurance and are self-pay, the percentage of a practice’s receivables that is self-pay increases significantly when co-payments, coinsurance and deductibles are added to the mix. Make every attempt to collect payment due from the patient at the time of service.
Mistake #5 – Having rigid payment requirements
It is in the best interest of a practice to consider developing a separate charge structure for self-pay patients. Oftentimes the charge structure to bill insurance plans is the same structure used to bill self-pay patients. Offering patients a lower rate for service often translates into greater collections overall. This simply suggests that self-pay patients are charged the “allowed” amount-the amount paid to a participating practice by an insurance plan – rather than the practice’s full charge amount.
Mistake #6 – Incorrect or incomplete documentation of services
Incomplete or inaccurate documentation typically leads to undercharging or not charging at all for services provided. Practices with optimized revenue cycles have implemented tools, processes, and educational sessions to assist physicians with documentation.
Mistake #7 –Focusing sporadically on quality and training
Ongoing training of registration and clinical staff is essential to realize tremendous financial impact from revenue cycle improvements. With constantly changing payer regulations and turnover of staff, practices that have devoted time to training on an ongoing, consistent basis are seeing results.
Mistake #8 – Allowing accountability for results to be somewhat fuzzy
One of the primary reasons for lost revenue is that claims fall through the cracks because nobody has direct accountability for the claim. Extremely useful tools are weekly reports on bill holds, claim errors, denials and write-offs. Dedicating staff to a certain payer also improves accountability.
Mistake # 9 – Leaving performance measures as an afterthought
When making changes to your revenue cycle process it is often an afterthought of how the results will be sustained. It is important to develop performance measures to establish a baseline which will then be monitored and reported for continued improvements and sustainability of changes made.
Mistake # 10 – Using nonstandard definitions and procedures for recording errors, denials and write-offs
In many practices, it is difficult to develop a clear picture of revenue cycle issues because the data are inconsistent. In many cases, the information that is available has a huge element of human error and interpretation. For example, staff posting denials and write-offs may not be using standard definitions to describe the reason for the denial or write-off. Be sure to obtain data that is valid and will characterize what is occurring and train staff on standard definitions and how to apply them.