9 Ways to Improve Your Practice's Revenue Cycle
The fastest way for a practice to increase profitability is to improve its revenue cycle, according to David Wold, CEO of Healthcare Information Services in Park Ridge, Ill. "A practice that seriously examines its revenue cycle and takes steps to improve it can potentially increase monthly reimbursements anywhere between 5 and 15 percent within 4-12 months," Mr. Wold says.
Mr. Wold suggests the following nine revenue cycle improvement solutions.
1. Use benchmarks. Practices often ask, "How do I know that the revenue cycle is well managed? What do I look for?" The practice needs to compare performance to benchmarks like these provided by the Medical Group Management Association:
- One common benchmark is the percent of billed dollars that remains uncollected after 120 days. The MGMA benchmark for orthopedic practices is 18 percent.
- Another benchmark is how quickly your receivables are turning over. That is, what is the average length of time between rendering the service and being paid? The MGMA benchmark is 41 days.
If the practice's measurements are higher than either of those benchmarks, it will need to make improvements, says Mr. Wold.
2. Manage the front end of your billing process. When physicians have collection problems, they tend to focus on the old bills, the ones that are 120 or more days outstanding, and not on the original bill submissions, the front end. But think about it, Mr. Wold says. The reason there are so many outstanding bills is because something went wrong on the front end. Therefore, the front end of the process needs to be examined. One very simple problem is that demographic and insurance information has not been clearly and correctly entered.
3. Use claim-scrubbing software. Claim-scrubbing software can reduce billing errors such as CPT and ICD-9 codes that don't match up, Mr. Wold says. If they don't have the software, the claim may go out and be denied.
Claim-scrubbing software is typically not very expensive and can bring in a huge return on investment. Your practice management software vendor can likely recommend a product, and many of them sell their own scrubbing product.
4. Make sure you have enough billing staff. Skimping on staff man mean the billing office will be backlogged. Nine out of 10 times, Mr. Wold says, the practice simply does not have enough resources to fully manage the revenue cycle. In this situation, there will always be some key function that is ignored.
5. Make resubmission of denied claims a priority. Has the billing office been instructed to make it a priority to immediately rescrub and resubmit denied? Mr. Wold says the actual error might be something simple like the wrong social security number or incorrect insurance information, which can easily be fixed if someone properly works the claim.
6. Make sure staff enters patient information correctly. When the person who schedules the appointment enters patient information into the system, it is a recipe for multiple errors, Mr. Wold says. That's because the appointment scheduler has other functions to deal with and may not have the time, focus and understanding to make sure each bit of data is correct. There are fewer errors when the patient is handed off to the business office, and the business office enters the information. If this is not possible, then the business office should at least double-check the information.
7. Perform a coding audit. To determine where physicians are making coding errors, the practice should pay for a coding audit at least once a year, Mr. Wold recommends. During a coding audit, an expert comes to the office, examines the charts and sits down with physicians to go over errors. Physicians who clearly understand where they are making errors are less likely to make them again.
8. Make sure coders are trained. Mr. Wold believes that the in-house employees handing coding should be certified coders. If not, the practice should spend the time and money to have them trained. He recalls overhearing a physician ask his coder, "Susan, you know all this stuff already don't you? You don't need any training." Mr. Wold says that is a question that leads to only one answer: "You're right, doctor, I don't need any training!" The practice should view training of staff to be as important as CME for physicians, he says. Coders can get the training through Webinars or in local seminars.
9. Consider outsourcing revenue cycle management. With improvements in technology, this has become a cost-effective and efficient option, Mr Wold says. All the information can be handled electronically in communications that do not violate the patient's privacy. If the practice has paper-based information, it can be scanned in and sent to the vendor.
Practices that outsource billing functions can free up space that could be used for expanded services, such as physician therapy or an MRI, or it can be used for an extra exam room, he says.
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