Billing, the backbone of healthcare revenue cycle management (RCM), can present some of the greatest challenges for healthcare providers because there are so many steps and people involved. Coding complexity, billing errors and patient miscommunication further complicate the revenue cycle. At the same time, it is essential for optimizing the RCM cycle and reducing the days in accounts receivable (A/R).
The billing cycle begins the moment the patient comes in for a visit. This is when the importance of capturing correct patient information comes into play—it lays the foundation for accurate billing and collection. Manual claims management can place an administrative burden on the collection process, increasing the occurrence of inaccuracies and delays in payment.
Most healthcare practices use electronic collections modules to automate the A/R process, such as generating progressive statements and collection letters. To ensure you are paid timely, work third-party payer accounts within 15-30 days after the claim has been submitted, depending on payment requirements of Medicare, Medicaid and third-party payer fee-for-service contracts. When you sort A/R aging reports by payer to identify payment issues, you can sort by high-dollar amounts, old accounts and more.
Tip: Decide when in the cycle to switch from insurance to patient pay when you have not received insurance payment. You may want to consider 30 or 45 days. This often results in the patient working with their insurance to prompt a resolution by asking what the delay is about.
Be sure to document all collection efforts and the outcomes of those efforts in your practice management system, using the financial notes section. This will enable anyone in the office to check the status of an account and easily respond to patient questions.
Finally, determine how long you will work the account before turning it over to an external collections agency. Most practices use 90 or 120 days. If the external agencies are too successful, meaning they are collecting close to half the accounts, you may want to take another look at your internal efforts to make some improvements. Use benchmarks to help you determine what is working best for your practice.
The Medical Group Management Association’s most recent MGMApoll asked healthcare leaders: “What is your biggest revenue cycle challenge?” A majority (48%) responded “claims payment,” while 23% reported “other” revenue cycle issues, with the top three being denials, prior authorization and staffing issues.
Forming Key Strategic Partnerships
If your practice does not have the staff on hand to effectively manage claims, outsourcing your medical billing is also a viable option. External agencies can guarantee correct payment and stay updated on industry changes for coding, billing and processing claims. Third-party specialists can advocate for your practice. It’s their job to stay updated on billing regulations.
In addition to bookkeeping, payroll and bill pay partners, consider forming key strategic partnerships for the following:
- Accounting & Finance
- Accountable Care Organizations (ACO)
- Independent Physician Associations (IPA)
- Group Purchasing
If you are an independent physician or small practice, consider aligning with ACOs and IPAs that will yield you the highest reimbursements.
Our new e-book, “Healthcare Revenue Cycle Management,” is meant to help you review aspects of your RCM process through a critical lens and make any necessary changes to produce greater cash flow. We seek to provide you with insightful industry knowledge to help you grow your healthcare business to its full potential.
You may download our new e-book by completing a brief form.
The healthcare accountants and advisors at Goldin Peiser & Peiser have decades of advising medical practices, hospitals and senior living facilities. They have helped their clients understand ways to maximize RCM by suggesting best practices and technology that can boost operational efficiencies and outcomes. Our Revenue Cycle Management Group specializes in driving system-wide efficiencies for medical offices, hospitals, surgical centers and long-term care facilities.
For more information, please contact Erick Cuter, CPA, or Alita Stratton, CPA, at (972) 818-5300.
Note: This content is accurate as of the date published above and is subject to change. Please seek professional advice before acting on any matter contained in this article.