Accounts receivable problems can harm a healthcare provider’s income flow. Serious payment issues stress billing teams and impact earnings. The post-service payment model demands alertness from the coding team. Yet, there are ways to overcome these challenges and boost efficiency. 48% of healthcare leaders identify claims payment as their main revenue cycle challenge. Other concerns include claims denial, prior authorization, and staffing. We tackle these industry issues, guiding you to improve healthcare revenue cycle efficiency.
What Is Revenue Cycle Management?
Revenue Cycle Management (RCM) is the process of tracking, managing, and optimizing the financial aspects of a healthcare system’s patient care services. It includes patient registration, appointment scheduling, billing, and payment processing to ensure the efficient flow of revenue from the delivery of healthcare services. Healthcare providers do in house financial management or outsource to the third party medical billing agency for efficient financial management.
Utilize Data for Monitoring and Evaluating Revenue Cycle Performance
Leading professionals advocate for a data-centric approach to address inefficiencies in the revenue cycle. By leveraging valuable data, administrators can assess whether their staff adheres to best practices, ensuring quicker and more accurate reimbursement. Clinical and financial information enables companies to establish and monitor key metrics serving as performance indicators, thereby setting a standard for easy work comparison.
Metrics facilitate the measurement of work and the identification of inefficiencies in the process. Should these metrics reveal a negative trend, managers can swiftly adjust, innovate, and guide the team back on track. Key indicators that can be tracked include:
- Duration to complete the Accounts Receivable process
- Percentage of total service revenue collected in cash
- Claims denial rate
- Final cash write-off amount
- Collection costs
- Secure Patient Financial Contributions in Advance
In 2015, approximately three-fourths of healthcare organizations observed a sudden surge in patient financial responsibility, attributed to the prevalence of high deductible plans. Despite escalating healthcare costs, nearly 70 percent of patients with bills totaling $500 or less did not settle their dues in full in 2016. Receiving reduced and delayed payments jeopardizes healthcare revenue cycles, risking the receipt of the complete payment.
Providers also incur expenses in deploying assistance to collect these payments. Managers can optimize their cycles efficiently through point-of-service (POS) or pre-service payment options. Healthcare providers can enhance POS collections by implementing the credit-card-on-file facility, a method acknowledged as the most effective payment collection option, despite only 20 percent of organizations currently offering this choice.
2. Collect Patient’s Share of Finances Upfront
In 2015, approximately three-fourth of healthcare organizations notices a sudden rise in patient financial responsibility due to the prevalence of high deductible plans. Despite the rise in healthcare costs, nearly 70 percent of patients with bills worth less than or equal to $500 didn’t fully pay their dues in 2016. Getting paid less and late puts healthcare revenue cycles at risk or not receiving the full payment.
Providers also bear the costs of deploying help to collect these payments. Through point-of-service (POS) or pre-service payment options, managers can optimize their cycles efficiently. Healthcare providers can also implement the credit-card-on-file facility to boost POS collections. Currently, just 20 percent of organizations offer this option despite knowing that it’s the best payment collection method.
Through this strategy, you can save up to 28 percent of your revenue collection time within six months.
Improve Revenue Cycle Performance with Data
Experts recommend a data-driven approach to fix revenue cycle issues. Analyzing data helps administrators ensure staff follows best practices for quick and accurate reimbursement. By tracking key metrics, like completion time and denial rates, firms set standards for comparison, making it easy to detect and address inefficiencies. If metrics show a negative trend, managers can adapt and bring the team back on track promptly.
Track Basic Indicators:
- Days to complete Accounts Receivable
- Cash collected as a percentage of total revenue
- Claims denial rate
- Final cash write-off amount
- Collection costs
- Ensure Timely Patient Payments
In 2015, 75% of healthcare organizations faced increased patient financial responsibility. Despite rising healthcare costs, 70% of patients with bills under $500 didn’t fully pay in 2016. Late and partial payments put revenue cycles at risk, along with the added costs of collection efforts. Implementing upfront payment options, like point-of-service or pre-service payments, and utilizing credit-card-on-file can optimize revenue cycles. This strategy can save up to 28% of revenue collection time within six months.
Improve RCM Efficiency
Automate verifications and eligibility checks beforehand. 86% of medical practices enhance authorization checks, reducing unnecessary costs. Save time and costs by opting for electronic prior authorizations, saving up to $5.61 per transaction. Streamline processes with automation tools to boost revenue cycle efficiency.
Recognize and Reward Performance: Frontend and backend reps play a crucial role. Motivate them with incentives, setting realistic targets. Use graphics to highlight top performers. Blend technology and strategy for success in revenue cycle management
Improve Your Backend Stress with Frontend Changes
Did you know that you can prevent almost 90 percent of claims denials? Despite this, many providers ignore preventing these issues and handling other backend problems. In 2017, healthcare providers considered 90 percent of claim denials uncollectable, leading to a $3.5 million loss in 4 years for a 350-bed hospital.
Enhance frontend operations to avoid common mistakes like incomplete data entry. Automation helps shift focus from administrative tasks to patient care.
Be Clear About Billing Costs with Patients
46 percent of younger patients would pay at the point of service if given an estimate. US patients want service lists with prices to assess costs. Providers must be transparent with costs to get paid easily.
Final Word
Improve the overall customer experience with upfront estimates, flexible payment options, and automated billing. 86 percent of patients understood their financial obligations with cost estimates, a key strategy for boosting Healthcare Revenue Cycle Productivity.
