Republished with permission from Vein Therapy News, a PCI Publication www.pcinews.com
A medical practice is one of today’s most complex businesses, and it must generate revenue if it is to survive. Billing comes to most people’s minds when you mention Revenue Cycle Management, but the topic is really much broader. Revenue Cycle Management is a process that truly affects your entire vein practice. From a new patient’s first inquiry to completion of their treatment plan, an efficient Revenue Cycle Management process can make or break your medical practice. Nearly every function in the practice has the ability to positively or negatively impact your ability to collect its revenues in a timely and accurate manner.
The revenue cycle comprises the numerous tasks of the billing and collection process — namely, gathering and entering data about professional services rendered and ensuring that bills are paid in full. Think of a typical vein practice’s revenue cycle as a wheel. The spokes are the critical functions of the billing and collection process. Each function has several key touch points, often in the form of tasks, that practice staff or providers must perform. Unless each function is performed effectively, the wheel will fail to turn. If it stops for too long, the business will collapse.
Critical Revenue Cycle functions include
- Contracting with insurers. Managing and monitoring reimbursement agreements with PHO, government and private payors. Are you being paid at your contracted rates?
- Eliciting and processing patient information. Scheduling and confirming appointments as well as referrals, registering patients in the practice management system, verifying insurance, obtaining pre-authorizations for treatment and other tasks
- Capturing charges: Documenting all services provided to patients, correctly coding services, providing required documentation and other tasks
- Billing: Producing and submitting claims to payors and sending statements to patients
- Processing payments: Posting payments, verifying that your medical practice is being paid its contracted rates, handling denials by insurers and correctly adjudicating accounts
- Handling accounts receivable: Monitoring performance and resolving or appealing payor denials
- Managing collections: Determining and collecting what patients owe, administering financial policies and receiving payments
For each function, a well-run vein practice should establish, assign, and MONITOR the administrative functions that must be performed. Unfortunately, many practices that our firm consults with are not performing many of these tasks efficiently and consistently. Opportunities to interact with patients and payors are missed and, as a result, the revenue cycle does not operate at peak efficiency.
- Recognize where the cycle starts. The revenue cycle starts as soon as the medical practice defines the terms of its relationship with an insurer — or your medical practice’s financial policy regarding patients who have no healthcare coverage. When the patient makes contact with your vein practice, the revenue cycle wheel begins to turn. The cycle’s beginning includes stating your practice’s financial expectations, collecting from patients without insurance and verifying insurance coverage and benefits from those who do. Operating an efficient revenue cycle requires practice wide buy-in to the following principles:
- Knowledge of the terms of insurance contracts and establishing an appropriate Financial Policy for patients without insurance
- Involve all employees in the revenue cycle process, clinicians as well as administrative staff, not just the billing office staff
- Ensure the accuracy of each data element about the patient demographics (insurance data as well as contact information). Recognize that the process of getting paid starts before the patient walks into your practice … by requesting appointment schedulers to describe the practice’s payment expectations to patients at the time they make appointments. Require them also to reiterate these expectations in appointment-reminder phone calls. Finally, mandate that time-of-service collection is a core function of front-office staff.
- Focus on accuracy.An efficient revenue cycle results in faster throughput, but that does not mean haste. To ensure speed and accuracy, focus attention equally on improving the precision of the data submitted by clinical, administrative and billing office staff.
- For Physicians, Physician Assistants, and Nurses, establish a written policy for timely completion of patient records, full and accurate documentation of all services and recording diagnoses for each visit linked clearly to the services rendered. The policy should also clarify the roles of clinicians regarding pre-authorization for services to be rendered.
- B. For Front Desk staff, pay careful attention to the order in which assigned tasks are to be performed. Provide staff the tools and technology to get assigned tasks done. For example, if the practice expects past due balances to be collected at the front desk, staff need training in how to identify the correct amount, how to ask for it and establish a payment plan if the patient can’t pay in full … as well as immediate access to a credit and debit card machine, as well as a petty cash change drawer.
- For billing office staff, clean claims and statements translate directly into faster cash flow. Optimal staffing means having enough employees to allow billers the time to ensure charges are accurate before posting them. Assigning work by insurer allows billing staff to grow familiar with those payors’ rules. An organized billing process can prevent many of the denials that hold up cash flow by submitting clean claims that get paid on first submission.
- Submit claims daily. Send claims to payors as soon as they are ready. Work with the clearinghouse to help identify problems in any denied claims so that corrected claims can be resubmitted as soon as possible. Send billing statements promptly to patients who don’t have insurance or who are covered by an insurer with which the practice does not participate. Don’t process statements monthly, bi-weekly or weekly … this just adds more days to your outstanding receivables. By processing statements throughout the week, you spread out telephone calls from patients who have questions about their bills.
- Embrace Technology. As insurance deductibles, co-payments and out-of-pocket costs continue to rise, the ability to obtain accurate information about the patient’s financial responsibility at the Front Desk is a tremendous asset. However, employees’ efforts to request time-of-service payments require the support of both information technology and operational design. For example, appointment schedulers should be able to quickly research patient balances and take credit card payments by phone.Using technology wisely includes:Verifying patients’ insurance coverage, benefits eligibility and financial responsibility automatically before services are rendered;Install protocols in your billing software based on coding and payor reimbursement guidelines to electronically scrub claims before submission.Post payments electronically through electronic remittance and funds transfer;Other technology that can improve the billing process includes online bill payment, computerized payment monitoring and automated, credit card-based payment plans.
- Stay current. When it comes to billing and collections in healthcare, rules seem to have been created just to change. Many claim denials and lost billing opportunities occur because medical practices do not set aside a little time each year to track the annual changes made to the coding systems. Each annual Medicare fee schedule also brings a host of new rules for covered services and reimbursement.
- Involve patients. Because most medical practices bill the payor on behalf of their patients, it’s only natural to ask for the patient’s help when something goes wrong in that process. If, for example, a payor denies a claim based on insufficient information from a patient, contact the patient immediately to prompt him or her to respond. (One way to prevent these potential payments problems is to address the issue of information-based denials in the payor contract. For example, seek a contract clause allowing your practice to transfer financial responsibility for the service to the beneficiary — the patient — if the patient does not respond within 30 days to the payor’s information request). Copy patients on any appeal letters sent to payors for services that were rendered to them. Seeing this information will likely stir patients to pick up the phone and call their insurers.
- Prioritize. Billing office employees are generally detail-oriented. Therefore, they may lose sight of the big picture and need help prioritizing their work.
- Follow through. Whether it’s an appeal letter or simply a patient’s promise to pay off a balance, the billing staff needs to be monitored to view the progress of pending issues. Set up electronic reminders — ticklers — for information requests and appeals. It’s the only way you’ll guarantee results. Furthermore, follow through when threatening to report a payor to the state insurance commissioner or turn a patient’s delinquent account over to the collection agency. Don’t bluff.
- Monitor payments closely. Monitor key performance indicators by payors. Perform quality audits at least once a quarter. Demand that payors provide the allowable amounts for codes you use most frequently. This information allows you to determine whether the insurers are living up to the terms of their contracts. To catch lower-than-contracted reimbursement, set up an automatic query in the practice management system to track each payor’s allowables for filed claims. Lower-than-contracted reimbursements are almost always due to the payor bundling charges, down-coding services or making other changes not called for in the contract.
- Flag every EOB for which the insurer reimburses 100% of the billed charge … that’s a sure sign that the practice is charging less than the allowable it is due. When a claim is paid, the payor reimburses the practice in the form of an allowable amount, often referred to as the “allowance.” For each procedure code, the difference between the charge and the allowance is considered a contractual adjustment. The billing office makes this adjustment at the time of payment posting. The adjustment process breaks down when billers treat other types of adjustments as contractual adjustments. These non-contractual adjustments may include claims not paid because the charges were not submitted promptly by your billing staff, or a payor refusing to remit payment because your billing office was late in submitting the enrollment paperwork for a new provider.