The healthcare industry is unlike any other. In other businesses, you provide a product or service and the customer puts cash in your hand (more or less). However, the healthcare industry is very different. With multiple providers, claims to manage and reimbursements to deal with, getting money in the door in a timely manner can be difficult. Where healthcare businesses do not differ from other industries is that it is just important to manage revenue and cash flow as it is anywhere else. To help your healthcare business deal with this complicated receivables issues, here are a few ways to improve healthcare revenue cycle management.
Track and Analyze the Revenue Cycle
Maybe this is something you are already doing. If you are, there are always ways to get better at understanding your revenue cycle. If you are not, it is the number one way to improve revenue cycle management and you should start now. The simplest way to explain why this is so important is with an old business cliché that goes, “you can’t manage what you don’t measure”.
The first thing an organization must do is to set strategic goals and benchmarks. After you know what your ideal financial situation should and could be, you then need to take all the data, from patients and payers and start to see how you are doing in each category. The good news is, there is a lot of data in the healthcare industry to collect and learn from. There are also a host of software programs you can implement to easily help you pull together the data and draw conclusions from it.
Examine Denials and Claims Scrubs
One of the biggest challenges for healthcare providers is not getting paid, or only getting partially reimbursed from insurance companies. To improve your revenue cycle management, you need to understand why this is happening and take steps to improve your payment rates. To do this, you really need to stay on top of the claims that are not fully paid and either go back to the payer to get what they really owe you or do better with your own processes and procedures in the future.
The most common reasons for claim denials are:
- patient ineligibility
- incomplete patient or plan information
- missing supplemental attachments
- incomplete service information
- duplicate claims
- claims submitted to the wrong payer
- coding error
What do you notice on this list? How about the fact that most of these are avoidable oversites on the provider’s end. When you start to see patterns emerge as to why you are getting claims denied, you can start implementing better practices with both your front-end and back-end staff.
Examine Your Contracts with Payers
The other common reason your healthcare organization is not seeing the reimbursements from claims it should is that the payer is not paying in line with what your contract states. This is a very common problem. Some of the discrepancies might only be a few dollars. It is probably not worth it to do a time-consuming contract review for every small item payment but the problem is, those small numbers add up over time and can cost your business a lot in the long run.
The best solution is to do a contract review for big-ticket reimbursements to make sure you get paid in full on large bills. If you find a certain company is not sticking to the contract with large items, it is worth reviewing smaller items as well on that specific contract. On all others, just make sure you are reviewing somewhat regularly (Annually? Biannually? Quarterly?) to make sure everything is being paid to spec.
Implement Stricter Front-End Process
Healthcare revenue cycle management is not just a function of the back-end of your organization. The front-end has very important responsibilities as well. The more you streamline and improve their processes, the less pressure you put on your back-end to carry the revenue cycle load.
Studies show that more than half of medical bills under $500 are not fully paid. This is particularly prevalent among younger adult patients. By optimizing your point-of-service payments, you can start the revenue cycle on a better foot. By putting in place a strict point-of-service or pre-service payment plan, you can ensure you get the revenue cycle started correctly.
One great way to help do this is to offer pre-service cost estimates so patients know that they are getting into. Data suggests that almost half of Millennial patients say they would be more likely to pay upfront if they received an estimate in advance. Another way is to offer card on file payments. While credit and debit cards are by far the most popular form of payment, many practices do not keep these cards on file for easy payment.
Debt 90 days past due? Hire Recovery Agents !
Hiring a debt collection agency is one of the best things you can do to minimize your losses due to ballooning accounts receivables. Unpaid bills can cause serious cash flow issues for the healthcare industry since they are unable to reduce their operating expenses as quickly as other industries. We can help you if you want to hire a good collection agency.
In addition to delivering the best patient care possible and striving to provide the best patient outcomes you can, healthcare businesses still need to keep a close eye on their bottom line. The healthcare revenue cycle is unlike any other and, as such, needs to be constantly monitored and tweaked to make sure it is running efficiently for your business. By collecting and analyzing data and improving processes in your organization’s back-end and front-end, you should be able to create a noticeable improvement in managing your revenue cycle. The most important reason to do this is that the less you and your business have to worry about revenue, the more you can focus on providing the best care possible.