Best Practices to Improve Revenue Cycle Performance
Are you collecting what you should from insurance companies? Is your office being managed as cost-effectively as possible? The key to answering “yes” to both of these questions lies in applying industry best practices to your office’s revenue cycle.
Your practice’s revenue cycle is the same as at every other practice: It starts when a patient sets an appointment, and it ends with final payment resolution – and there are too many opportunities along the way where simple mistakes will cost you money. Break down the revenue cycle, take a critical look at each phase, and get ready to track, measure and improve the metrics.
Whether you do your own billing and collections or use an outside billing service, employing the following recommended best practices at each phase of RCM can result in an increase in overall collections, a reduction in expenses/overhead and, most importantly, improved control over the business side of your practice.
Revenue Cycle Phase 1: Setting Appointments & Capturing Patient Demos
Aim for an error-free front desk: Your software should support efficient collection of patient demographic data and insurance info. Develop office policies and train your staff well, because the battle to get paid is won – or lost – by your front desk.
Track and balance appointments: From check-in to posted encounter, your practice management software should ensure that all patient appointments are accounted for and no charges are lost.
Use electronic insurance eligibility: Your practice management system’s appointment scheduler should have automatic eligibility verification built in and included at no additional charge. You should verify two to four days prior to an appointment.
Utilize template-driven scheduling: Your time is your most valuable asset. Use your software’s templates to make the most of your office days.
Phase 2: Capturing Charges & Submitting Claims
Charge capture from EHR minimizes manual input: Charge data should be automatically pushed from your EHR to your practice management system so that claims can be prepared, even if your EHR is from a different vendor than your PM system.
Minimize denials on first submission: Your software’s rules engine should be dynamic and keep up with changes in payer rules and policies. The goal is to cut the percentage of claims that are denied on first submission, which can only be done by actively managing a rules engine.
File claims electronically, and file daily: Balance claim submissions against practice management totals and automate the separation of claims that require attachments.
Track amount billed against expected collection (value of claim based on payer contract) at the time of claim submission: Your practice’s goal is to be paid 100 percent for each claim, based on the particular payer contract.
Revenue Cycle Phase 3: Remittance Posting, Collections & Data Analysis
Use electronic remittance whenever possible: Post the full adjudication, including amount approved, paid, disallowed, deductible, co-insurance, co-payment, etc., as well as all denials. Make sure your software allows you to delay posting, if necessary, to help balance against bank totals.
Manage denied claims aggressively: Identify A/R (detail and summary) under denial status from your practice management system. Another benefit: Learn sooner if there are new payer rules in effect that are delaying your reimbursements.
Manage “no-response” claims quickly: Age claims nightly to track ignored or lost claims and save a potentially wasted phone call to a payer.
Track underpayments and downcoding in real-time: Claim by claim, your practice should compare approved amounts to your payer contracts.
Track write-offs and adjustments in real-time: Don’t wait for weekly reports or monthly totals. Also, make sure you have real-time visibility into refunds to guard against embezzlement.
Data analysis: Data should be transparent and easy to access, especially if your system is Internet-based. Focus on a few metrics that allow you to compare “apples to apples” and track these diligently. Here are three good ones:
- Net collection rate: The percentage collected relative to your contract (should always be at or nearly 100%).
- DSO (Days Sales Outstanding), also known as Payment Velocity: How many days on average is it taking you to get paid.
- First Pass Resolution Rate (FPRR): Percent of your claims paid appropriately on first submission.
So I ask: How does your practice optimize the revenue cycle?
Have questions? I’m here to help.