Optimizing the Revenue Cycle

Revenue cycle processes don't occur in isolation, but constantly affect each other. When?patient accounting procedures are performed correctly as part of a well-managed revenue cycle, cash flow is good, accounts receivable days drop, and the revenue cycle performs as expected. But problems in one part of the revenue cycle can flow into other parts of the cycle, negatively affecting efficiency and performance, and the further an error propagates through the revenue cycle,?the more expensive it becomes.

Healthcare providers deal with a more complex revenue cycle than most businesses, and there can be many missed revenue opportunities. Here are some considerations for identifying these missed opportunities and addressing them with medical accounting practices.

Maximizing Scheduling and Pre-Registration Performance

Missed revenue opportunities can occur from the very first contact with patients, but successful healthcare facilities take steps to avoid them. A clear pre-registration process makes patients aware of their portion of the expenses before procedures are done, and collects co-pays, deductibles, and other expenses up front where possible. It's also important for healthcare facilities to be able to identify charity care cases up front, so as to avoid spending time and effort trying to collect revenues they'll never get. Centralized scheduling is a great way to give patients a "one-stop" scheduling option for an entire facility and can minimize the chance of scheduling conflicts and insurance mishaps.

Benefit Verification and Missed Revenues

Simple benefit verification oversights can lead to missed revenues. When a patient is scheduled, a financial clearance process should begin based on the services that will be offered, coverage percentages, and out of pocket obligations like co-pays, deductibles, and charges for non-covered procedures. When verifying benefits by phone, thoroughness is critical and should include the name and badge number of the representative spoken with. Facilities should request coverage information as well as quotes on expected reimbursement, and they should use electronic tools to pre-determine medical necessity to avoid claims denials based on lack thereof.

Maximizing Charge Capture Opportunities

Suspense times - the timelines imposed on clinical departments to enter charges for services rendered - must be managed carefully to maximize charge capture. Not doing so can prolong days spent in accounts receivable and slow cash flow. The appropriate medical accounting staff should?systematically review the chargemaster?to ensure the facility is capturing all revenue correctly and to note any adjustments to the chargemaster.

Managing the Claims Process

The claims process can be fraught with missed revenue opportunities. Claims denials represent a small proportion of claims, but they can cause the?overwhelming majority of missed revenue opportunities. Many commercial insurers now have 90-day deadlines for claims submissions, and there's no indication that this will change. That means medical accounting staff must have processes to allow submission of claims promptly. Managing the claims process involves ensuring claims submissions are timely, that write-offs are monitored, and that claims are "clean." The results of such management include increased gross revenues.

Denial Avoidance and Management

When claims denials do occur, successful facilities track them by service, physicians, and staff performing services. Not only should total number of denials be tracked, but processes should exist to identify where denials originate to determine if there are any breakdowns in processes and identify opportunities to fix them. Denial management and avoidance may involve the following steps:

• Interpreting payer contracts correctly
• Reporting overturned denials for use during payer contract negotiations
• Educating staff to identify issues that may cause denials
• Tracking denials as a percent of gross revenue

When best practices are observed as part of a denial management process, results include better cash flow, a higher clean claims rate, and reduced denials.

Overall Measurement and Accountability

In general, catching and correcting missed revenue opportunities requires attention to all stages in the healthcare revenue cycle. Ongoing monitoring, along with departmental and staff accountability can go a long way toward avoiding missed revenue opportunities.?Organizational commitment is critical?for setting goals and making necessary changes to medical accounting processes to achieve them.

Conclusion

Every step of the healthcare revenue cycle affects every other step, and errors can propagate throughout without careful monitoring. But the right revenue cycle accounting processes can help ensure missed revenue opportunities are avoided and the healthcare revenue cycle proceeds as expected.