Making money in healthcare is a far different process than in any other business model and revenue is the pipeline of any business. Without reimbursement for services rendered, any healthcare organization can be in serious trouble. Knowledge of the healthcare revenue cycle will allow you to identify the gaps in your practice.
Earning money in healthcare starts and ends with the patient encounter. Everything revolves around the visit; from the quality of the initial intake, to the clinical documentation and code selection, and billing and collection efforts. Here, we will briefly discuss the 7 deadly mistakes in healthcare revenue cycle and how to avoid them. Let’s get started!
1. Inaccurate Verification of Eligibility and Benefits with No Cost Estimation
Today, patients are shoppers, for both their insurance plan and their medical care. With laws now requiring citizens to have medical coverage, there has been a rise in high deductible plans and payer requirements for coverage of services.
“Nearly 25 percent of medical practices do not verify patient eligibility upfront, according to a report by Caparo. (Murphy, 2016)”
Accurate verification of coverage and benefits is crucial for proper payment, not only from the payer but also from the patient.
Why do we verify insurance eligibility and benefits? Well, to answer these questions:
a. Is the patient’s coverage active and are they on the policy?
b. Is a pre-certification/authorization required?
c. Do they meet medical necessity per the payer’s requirements?
d. What is the patient responsibility portion?
Real-time eligibility is key. There are plenty of tools now that automate this process and provide real-time benefit details for any patient, payer, and plan. When in doubt, call!
Cost estimation tools are the second part of this process. Not only should these basic above questions be answered, before rendering services, but costs for the services the patient will receive should be calculated and transparent. High deductible plans mean less coverage for the patient initially and patients are involved more than ever.
“Rapid HSA (health savings account) adoption increase; approximately $775 billion in 2020 invested into HSA’s.”
Patients want to know what their bill will be upfront. Patients will compare your prices to your competition and without an estimate at all, they likely will go elsewhere.
2. Lack of Point of Service Collections and Payment Options
Once the patient walks out the door, regardless of ability, propensity to pay changes significantly. Collection efforts before services being rendered only guarantee payment.
Statistics show, “68% of patients failed to fully pay off medical bill balances in 2016, up from 53 percent in 2015, and 49 percent in 2014. This number is expected to climb to 95% by 2020. (TransUnion, 2017)”
Giving patients convenient payment options will significantly increase collections as well. Patient’s want access to digital tools and online bill pay. Without means of collecting numerous payment methods in office, your collections will decrease. Cash, check, and all major credit cards are the standard. Your billing statements should be easy to read and understand. Get rid of all the technical jargon and make the balance owed stand out visually. (Healthcare, 2019)
3. Poor Clinical Documentation Integrity
Everything revolves around the note. Are your clinicians exercising good clinical documentation integrity? Comprehensive documentation can be simple.
The note indicates everything that happened in the encounter. Proper documentation and coding support the clinical judgment of the treating provider. Without the proper details, it is likely that your claims will not be supported and may result in the recoupment of payment. All diagnosis and procedural codes should be 100% supported in the note. The note should be completed within 48 hours of the encounter, signed, and submitted for audit and billing. An audit is the only way to truly tell if your clinicians are missing the mark in their documentation. Complete and accurate clinical documentation will maximize your reimbursement potential.
How to document clinical documentation appropriately is not taught in medical school, and the importance may not be obvious to the provider. There are several ways to increase the effectiveness of a CDI (clinical documentation integrity) program in your organization.
“The main message to physicians should be that CDI is a quality initiative. (Towers, 2013)”
4. No Denial Prevention
Did you know? One (1) out of every five (5) claims are denied or rejected (Alpha II, 2019)
• 15-20% of all claims filed
• 60% of lost/denied claims are never resubmitted
• 18% of denials are never collected
Appeals and Rejections are Costly! Approximately 2/3’s of appeals and rejections are recoverable (Alpha II). The average price for reworking a claim is approximately $25.20 each (Alpha II).
Are you tracking First Pass Claims Rate (acceptance of a claim) in your practice?
Here are some of the Top Denial and Rejection Reasons noted by CMS:
• Mismatched CPT/ICD-10 code
• Incorrect Coding
• Lack of Medical Necessity
• Missing/Incorrect Modifiers
• No Physician Signature
There are many tools available to help you with denial prevention and management. Consult in an expert today!
5. Little payer management
Effectively managing and modeling payer contracts is crucial as the terms of these contracts have a significant impact on a healthcare organization's financial performance and each payer contract is different.
“Managing contracts successfully starts with clearly understanding all aspects of your contracting landscape. That can be allowing others in the organization to leverage the contracting material to perform their functions better. (Gooch, 2017)”
Effective payer management means having a good relationship with great communication. The goal is prospective payments. Measuring and monitoring the performance of your payers will indicate if you are being paid appropriately. If you are not getting paid correctly, this is a battle you should be fighting.
Have you negotiated your reimbursement rates recently?
Four Critical Components to Payer Contracting and Negotiation (Alpha II, 2019):
• Composition: What are you starting with?
• Performance: How well is the payer performing?
• Expectation: How should they be performing?
• Strategy: Steps to reach the expected performance
Note: a negotiation can be initiated anytime, regardless of what the contract says, yet should occur upon regular renewals, approximately every 2-3 years.
6. Not Having Quality Data and Key Performance Indicator Management
Data doesn’t lie! Without good analytics, it is almost impossible to identify the true gaps in your practice and the bottom line for your organization will be negatively impacted. Changes in healthcare IT (information technology) have made it easier to monitor the performance of your revenue cycle.
How do you know what should be measured? The right revenue cycle consultant has the right solutions for you. Don’t wait!
7. Inadequate staffing
We’re not recommending throwing warm bodies at the problem!
“We know how challenging it is to find the right people with the right skills to keep your revenue cycle humming. There always seems to be a shortage in the marketplace, not to mention budget restraints. Because of this, most healthcare organizations are trying to ‘make-do’ with existing staff. It’s a classic case of continually trying to do more with less. We’re all guilty of this, but in truth, we’re only hurting ourselves in the end. (Smith, 2016)”
• Start with calculating workload (task x time x frequency = workload)
• Implement a robust training program
With the right staffing and training, your revenue cycle will outperform your expectations!
submitted by Trinity Albertson, Healthcare business consultant and coach, Colorado Springs
For more information visit TFALLC.net