GI financial playbook: 3 experts on revenue cycle management for endoscopy centers & GI practices 

Gastroenterologists are busy running the clinical aspects of their practices, but many savvy GI physicians are taking an active role in the financial side of medicine. Three GI field experts weigh in on revenue cycle management best practices, challenges and opportunities for GI practices and endoscopy centers.

Question: What are some of the most important revenue cycle metrics for GI practices and endoscopy centers to track?

Larry Good, MD, FACG, founder, CEO Good Pharmaceutical Development, CEO, Compassionate Care Center of New York: Seasonal patterns are the most important metric to track in cash flow, so that one can prepare for the historically slow pay periods: the first and third quarters of the year.

Michael S. Morelli MD, CPE, FACG, President, Indianapolis Gastroenterology and Hepatology (Indianapolis):

•    Expected gross collection rate, i.e. what percent of your total charges you expect to collect.  While it is difficult to determine an exact expectation, you should have some idea what this percentage is. You should also calculate how changes in payer mix, service mix, payer fee schedules and other variables will impact the expected rate.
•    Actual gross collection rate. While this can vary from practice to practice based on your charge structure, it is useful within your own practice to compare your expected collection rate and to prior years. It is important to look at gross collection rate in addition to net collection rate, as it will help you understand whether your contractual allowances are in line with expectations based on your contracts. Monitor those services that have significantly high collection rates as compared to the other services being analyzed to be sure your charges are set high enough to capture all of the reimbursement from the third party payers.
•    Net collection rate, i.e. the percent of your charges collected after contractual allowances are taken into account.
•    Total days in accounts receivable
•    Percent of accounts receivable over 90 days
    Percent of accounts receivable over 60 days
•    Percent of clean claims submission – (Percent of claims that are accepted by the clearinghouse for immediate transmission for payment)

Barbara G. Tauscher, MHA, FACMPE, AGA Practice Management and Economics Committee; director of operations, gastroenterology, East and South Divisions of The Oregon Clinic (Gresham):

•    Cost and revenue per case. Although this isn't a revenue cycle metric, you'll want to assure that your cost per case hasn’' exceeded your revenue per case.
•    Staffing costs. Again, not associated with recycle management, staffing costs usually account for the highest portion of your expenses. Explore ways that some functions could be completed by non-RN staff, for example.
•    Days in A/R. Are you efficiently and effectively billing and collecting? Do you have clean claims being sent out?
•    Copayment/deposit collection rate. Do you collect every copayment at the time of service? Do you collect deposits for every endoscopy case in which the patient will have an out-of-pocket cost?
•    Denial rates. Track the types and frequency of denials. Can you improve any processes to decrease the denials?
•    Payer mix. This metric should be tracked at least every quarter. Is your payer mix becoming more Medicare/Medicaid and less commercial? If so, why?

Q: How can GI physicians keep abreast of these important metrics while running a busy practice?

LG: Good office management and tight account receivable tracking are key. If payments are off at other periods, it will make it impossible to deal with the slow payment months. Aggressive follow-up on delinquent accounts is necessary.

MM: Keeping abreast of these most important metrics is best accomplished by having your internal accountant or revenue cycle manager (or representatives from your billing company if you outsource) publish these metrics every month. This requires an information technology structure to be in place and a good relationship with your billing company, if you outsource your billing. Procuring data and creating analytical benchmarks and dashboards is the only way to keep a handle on this important part of your clinical practice

BT: Each practice should develop a monthly dashboard that includes the measures that they want to review each month and quarter. The dashboard should include the number of new patients seen per month. This is a good indication of whether your practice is growing or is maintaining their revenue stream from established patients. The dashboards should be reviewed by the executive committee, finance committee and/or all-physician group. If problem areas are identified, an action plan should be developed to correct it.

Q: Does it make more sense for GI practices to keep revenue cycle functions in-house or outsource?

LG: In my opinion, it is always preferable to keep management in house to maintain control and accountability.

MM: This is a tough question and is often practice specific. Things to consider when making this decision include the following:

1.    Do you the ability to hire the right personnel to keep your revenue cycle functions in-house? Certified coders with experience in GI and an experienced and knowledgeable manager are essential. Appropriate IT and system support will also be required.

2.    If you are considering outsourcing, compare billing companies with whom you might contract.
a.    What is their model of operation? Are they a full service company or a hybrid model? Under a hybrid model, your practice will be expected to perform some portions of the revenue cycle. Know exactly what services they will provide and what services your practice will be expected to provide.  
b.    If possible, talk with clients of the outsource companies you are considering to determine their level of satisfaction.
c.    Determine the experience and knowledge level of the staff who will be working your account. Do they have certified GI coders? Will coders review denials and appeal when appropriate?
d.    Do they collect self-pay balances?
e.    What technology do they bring to the practice to collect more information that can be used to collect more money?
f.    Will the staff be dedicated to your account, or will they be servicing other clients as well? Calculate actual on -site visits versus relying solely on weekly conference calls between her practice manager.
g.    Compare costs of all outsource companies under consideration, taking into account the service model of each.  If a hybrid model is involved, account for the internal costs of the staff you will need in-house.
h.    Compare the costs of outsourcing to the cost to keep in-house, taking into consideration all direct and indirect costs.

3.    In-house billing allows for more direct control and accountability.  If you outsource, it is advisable to have someone in your practice (or an external adviser) who is knowledgeable enough to monitor the outsource vendor and hold them accountable.  Performance expectations should be established and performance clauses in place in the contract.  The vendor must be responsive and put your interests first rather than at the end of a long line of other customers who may be more profitable to them (such as hospital systems).

BT: I prefer in-house; because I feel there is more accountability and direct responsibility if the practice manager directly manages the business office functions. Outsourcing business office and revenue cycle functions may be a better fit for smaller (less than five physician) practices. When the practice manager oversees the business office and recycle management functions, you can gain some efficiencies by cross training staff between the front desk and the business office, for example. The benefit to cross-training can be that the front office staff member now understands how many additional steps can be involved if the referral is not gained in a timely manner, or if the patient has to be billed for their $15 co-pay.

Q: What are the biggest revenue cycle management challenges GI practices and endoscopy centers face in 2015?

LG: Changes in payment paradigms and elimination of SGR payment schedules creates a great unknown. Having cash reserves or access to credit lines may be necessary for many practices.

MM: The biggest challenges for 2015 include:

•    Assuring that payers are not denying claims inappropriately
•    Assuring that payers pay according to your contracts
•    Gaining assistance from payers to resolve unpaid claim issues
•    Collecting from individuals with high deductible plans or co-insurance requirements
•    Assuring that claims are "clean" and have the lowest possible chance of being rejected based on errors
•    Implementing ICD-10 and minimizing any related cash flow issues
•    Following payer specific coding requirements related to the temporary GI codes in place for 2015
•    Planning for expected RVU revisions for lower endoscopy codes in 2016

BT: ICD-10 will be biggest challenge that GI groups face in 2015, along with the possible reduction in RVU values for the lower endoscopy codes. Each group will need to determine how to implement ICD-10 to assure that they do not face an increase in denials, or a lag in payments. Groups should look at their entire business operations to determine if they can decrease costs and improve revenue (increased productivity or better rates on commercial contracts). As they say, "every nook and cranny" will need to be reviewed to determine where expenses can be cut and additional business can be gained.

Q: What are the biggest opportunities to improve revenue cycle management this year?

LG: The biggest opportunities are, for practices accepting insurance, optimizing the new pay for performance rules as they roll out. Many practices will continue to look at alternative private pay or concierge practices to maintain financial stability.

MM: The biggest opportunities include:

•    Upfront collection of co-pays, deductibles, and co-insurance
•    Improving your "clean" claims rate
•    Strict performance clauses if your billing is outsourced
•    Review of payments and denials closely, especially for claims with multiple surgery codes
•    Compare payments to contracted rates
•    Persistence with payers to resolve claim issues
•    Solid position descriptions for all employed workers in the practice so that they are held accountable for collecting monies, gathering data to be used in the collection process

BT: Collect deposits up front and determine if you are leveraging IT to the best of your ability. For example, assure that you have collected a deposit that is equal to or greater than your cost of providing the endoscopy service. Next, give patients the ability to pay their bills online or via electronic statements. Many of the online payment systems allow patients to develop their own payments plans, within your guidelines (i.e. no more than three payments and not less than $50). By having the patient set up their payment plans, the GI staff do not need to be involved and their time can be spent on more difficult patient account collection calls or processes.

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