How can providers have next-level revenue cycle performance? In an era of increased financial challenges for hospitals and physician practices, it’s clear that revenue cycle management (RCM) remains one of the top challenges healthcare organizations face.
A recent report revealed big differences between five major national payers when it comes to average time to payment and denial rates, affecting providers’ ability to collect revenue. Meanwhile, just 14 percent of healthcare providers use advanced modeling tools to predict patients’ ability to pay. This limits the ability of front-office staff to have financial discussions at the point of service, when patient financial engagement is highest.
Below are four key strategies for next-level revenue cycle performance.
1. Reexamine revenue cycle workflows to determine where inefficiencies exist
One common culprit: inefficiencies related to prior authorization, such as missing documentation that can slow down the prior authorization process. Consider investing in automated tools that prompt physicians and staff for documentation that supports prior authorization requests, which can speed up the approval process.It’s also important to ensure payer contracts are updated at least once every two years. Regular reviews help keep reimbursement rates in line with market rates and prevent contracts from collecting dust. When negotiating new payer contracts, don’t just look at rates. Consider where pain points with the payer exist, and explore ways to address those pain points during the contract negotiation process.
2. Maintain a tight focus on reducing days in accounts receivable (A/R)
A recent Advisory Board study found that even among high-performing healthcare organizations, days in A/R—the average number of days it takes for an organization to be paid the amount due—has gradually worsened since 2011. This impacts both cash flow and cash on hand, putting revenue at risk and threatening the financial health of the hospital or physician practice.One way to reduce days in A/R is to work denials daily. Be diligent in appealing denials and continually look for patterns that could point to the need for “Denials 101” education. Common root causes of denials include lapses in the coverage verification process, failure to meet deadlines for claims submission and registration errors, such as inputting an incorrect or incomplete member ID.
3. Strengthen clinical documentation
When clinical documentation isn’t timely or thorough, codes may be inaccurately assigned. This can lead to lost revenue if claims aren’t corrected and resubmitted in time. One approach to consider: investment in a clinical documentation improvement (CDI) tool that can enhance the quality of documentation at the point of service. A 2017 HFMA survey of healthcare revenue cycle executives found that while all respondents had an inpatient CDI solution, only one-third had invested in an outpatient CDI tool. CDI solutions are critical to coding and ensuring charge captures are accurate and comply with laws and regulations.Providing physician practices with access to certified professional coders is also critical. This is especially true for specialties such as orthopedics, neurosurgery and family practice, where coding updates are issued frequently, as well as pain management, where scrutiny has intensified as the nation seeks to address the opioid epidemic.
4. Review patient collections policies
Has your patient collections policy been reviewed in the past two years? If not, it may be time for a refresh. High deductibles have made a deep impact on patients’ ability to fulfill their financial obligations for care. A recent Black Book survey found 83 percent of physician practices with five or fewer physicians are experiencing delayed payment from patients with high-deductible plans—and it is their greatest revenue challenge. By updating financial policies, hospitals and physician practices can better position staff to communicate patient financial information effectively and to have meaningful discussions regarding payment plans or options for financial assistance.
Now may also be the time to consider implementing advanced modeling tools to predict patient’s propensity to pay. The data received gives staff an opportunity to establish payment plans, where needed.
A Game Plan for Improved Revenue Integrity
Achieving next-level revenue cycle performance in an era of increased financial challenges for hospitals and physician practices requires diligence, creativity and determination. Look for ways to leverage existing technologies while keeping an eye toward new solutions that meet your organization’s needs. When providers enhance their revenue cycle, they also position their organizations to improve quality of care and outcomes—a value differentiator in today’s transformative healthcare environment.
If you want next-level revenue cycle performance in your organization’s collections and revenue, set up a quick consultation with our team today. We’ll recommend the best way for your healthcare organization to turn its numbers around and get the results you’re after.