True Costs of Revenue Cycle Management

Every organization is different, so there’s no one answer to what the cost of collecting revenue should be. There are a few things to keep in mind when factoring in the cost of Revenue Cycle Management in your company.?

Is it Working?

Without running any reports, does it seem like there are more patients, but less money? Do you know what your net collections rate is?? MGMA points to 95% of net collections as the ideal. Are you at 95% or higher? If so–that’s awesome! Your team deserves kudos, and probably a bonus structure.?

If not? You’re a lot like most other offices, and there’s some work to do.?

Can You Isolate the Solution?

Do you know what issue is keeping you from collecting the appropriate revenue? Is your front desk missing copays? Do you know how to handle out-of-network patients? Is the correct insurance information collected each time? Are there multiple areas for improvement? If you can review the ERAs and see how to right the ship, great!

Can You Fix It?

There’s a reason that revenue cycle management companies excel in their practices. Vendors invest in the right tools, and professional development to do it well.?

Vendors continually stay on top of the trends. For example, in August 2020, I spoke with a biller who had a month’s worth of Covid-19 test claims she couldn’t get through. It required a modifier she didn’t know about. I knew about it.? In the first week of the lockdown, we were on webinars learning about the specifics of billing for telehealth, telephonic visits, and Covid-19 tests.

Because we specialize in revenue cycle management, we have an interest in investing in the latest technology and education to be more efficient. And when we want to invest, we don’t have to vie with tools that help with patient engagement, or clinical outcomes.

I’ve worked with medical teams long enough to know that the process to invest in new technology or a new workflow takes a lot of meetings, demonstrations, and board approvals. Sometimes if it’s not budgeted for that year, it means it’s on the back burner until the new budget.–it all adds up to a lot of time.?

What Does Fixing it Mean To Your Team?

“My biller has been with me for 15 years!” The big fear is that they’d have to let go of someone they know and care about if they bring in an RCM vendor. And sometimes, yes, it makes more sense to let the internal staff go, and save money with the RCM vendor.?

However, that’s not always true. I’ve talked to enough practice administrators who are frustrated because they thought they’d be getting full-service RCM but ended up spending much of their day with tasks from their RCM vendor and managing hold buckets. They now regret letting go of their in-house biller.?

Revenue Cycle Management professionals are not complainers. They’re not going to share the parts of their job that are tedious, frustrating, and exhausting. But, because they’re such team players, they’re not going to tell you when they’re being stretched thin, and they’re not going to make excuses. These are great qualities in an employee, but If you’re net collections rate isn’t where it should be, it might be time to hear from your in-house RCM team. It doesn’t mean you have to rip and tear your revenue department, but you might want to hear from them about where the time and resources are being spent and determine if it’s the best use of their energy.?

What do the needs of your organization dictate? Do you need to execute some cost savings quickly, but want to keep the culture of your team intact? You can do that. Have a conversation with your revenue team about the bottlenecks. Find out “What do you love about your job?” “What do you hate?”? Let them help to build a solution that helps maintain their role while making it more rewarding, and less frustrating. If it means more revenue is collected in the process it’s a win-win.?

Long Story Short

Only you know what you’re spending on your revenue cycle right now from an FTE/software perspective. Can you factor in the loss of not having a higher net collections rate?? For a review of your current revenue cycle and to explore new solutions to improve cash flow, reach out to PointWest Technologies.