Most health care providers entered their chosen field to help people hands-on. However, a medical practice cannot survive without revenue, and revenue for your medical practice is how you can afford new equipment and technological advances.
So, how do you keep the focus on your patients but also ensure you are generating revenue? The first step is to understand the medical practice revenue cycle processes. Only by understanding these processes can you see areas where they can be improved. A coder is not the only person required for accurate medical billing. It is a multi-departmental challenge to ensure that all codes are correct and that the bills are sent out in a timely manner.
The medical practice revenue cycle processes can be broken down into seven steps. Within each of these steps, there is room for improvement.
1:Determining the Type of RCM That Fits Your Practice
This may seem like an obvious step, but it’s one that is rarely reevaluated. Perhaps you started out as a small practice that has grown in leaps and bounds. At first, revenue cycle management (RCM) was a fairly simple process, but now it is too much for your practice to handle. Recognizing that you can no longer manage your revenue cycle on your own can benefit you greatly in the long run. On the flip side, if you are a very small practice, it may not make financial sense for you to outsource your RCM, and you can install your own RCM software.
Unless it’s a medical emergency, insurance companies will require pre-authorization on most claims. The pre-authorization deems that the service is medically necessary. Understanding the pre-authorization process and also how to appeal if pre-authorization is denied can really speed up your entire claims process. However, you must remember that a pre-authorization is not saying the insurer will pay the bill; it is just confirming that it’s a medically necessary service.
3:Verifying Benefits and Eligibility
It is both the provider’s and the patient’s responsibility to verify that the patient has current benefits under their insurance plan and is eligible for the services provided. Most patients do not bother to do this verification themselves, so it falls on the provider to do so. This can eat up a lot of time if done over the phone. There are now electronic means of verifying that speed the process up while providing the most up-to-date information. If this is an area your practice struggles with, consider investing in RCM software that includes easy verification processes.
After the procedure is completed, it’s time to submit the claim to the insurance company. This is where your medical billing department can shine. It’s very important that each claim is coded correctly. There are many different codes for procedures, and some are only different by one letter or number. The way a claim is coded is how it will be paid. There are often multiple codes per procedure, so attention to detail in your medical coding department is essential. If you have software to help you, this can speed up this process and potentially catch errors before they are officially submitted.
5:Time for Payment
After the claim is sent off, there will be a time period to wait until the insurance pays the claim or denies it. Once the insurance has made their payment, you must then collect the rest from the patient if they still owe a balance. Sometimes, a patient has two insurance companies, so you have to first submit the remainder to the secondary payer. Only then can you bill the patient for the remaining balance. If billing is integrated into your RCM software, it may include a handy “Pay here” link or other options for the patient. Practices that utilize electronic payment options are much more likely to be paid on time.
Revenue for your medical practice is slowed down considerably when claims are denied. An occasional denied claim is not uncommon, but if you’re seeing an increase in claim denials, you need to stop and take a deeper look into the problem. It may be that you have hired a new coder, and they need time to learn the ins and outs. In this case, having someone double-check the coding before submitting can save you denials.
You may also find that certain types of claims are being repeatedly denied. You can follow up with the insurance company to discover why and work to rectify the problem in the future. Learning to quickly and efficiently deal with denials will definitely smooth out your revenue cycle.
The best way to see where there are gaps in your RCM is to generate reports. Schedule a monthly meeting where all members of the RCM team can go through these reports. This is the best way to see where the problem lies and if the process is getting better or worse. Raw data often tells a story about the revenue for your medical practice that is hard to see until it is all laid out in front of you.
Now that you understand the medical practice revenue cycle processes, let’s look at three ways to improve it.
8:Merge Front- and Back-End Management
In most practices, the front and back ends of the revenue cycle never connect. By showing each end what the other does, you can greatly increase the efficiency of your cycle. Imagine if the front desk knew exactly why it was important for that patient to provide a co-pay. Wouldn’t the receptionist work harder to get it? When both sides understand what the other is doing, they are more likely to work as a team and accomplish more together.
9:Collect Payments Up Front
Going right along with the previous point, it is important to collect certain payments upfront. A prime example is a co-pay. Patient education of estimated fees and what they are required to pay will encourage cooperation on this front. When you collect fees upfront, you know you have at least that much of your revenue cycle completed.
10:Automate as Much as Possible
If you are struggling with any area of the process, you need to automate it as much as possible. The RCM software that exists today is multifaceted, and you can use it for every part of the process, including saving cards on file and sending reminders to patients who haven’t paid. Medical billing is much more complicated than it used to be, and the old ways may need to be replaced. Instead of thinking of it as an expense, realize that using an integrative RCM software is an investment. The data you pull for your reports will quickly prove that.
Ensuring that you are providing excellent patient care is one way to improve your business. However, if you are not efficiently working through the medical practice revenue cycle processes, your practice will struggle to stay in the black. Follow these tips to improve the process so that you can keep focusing on patients instead of payments.
Schedule a consultation today and let us help you increase efficiency: