Strategies to Enhance a Practice’s Revenue Cycle Management

Managing the money tied to patient encounters at each step along the way is critical, but in an era of high deductibles and tightening payer reimbursements, revenue management is an increasingly complex task.

Patients are more commonly required to pay something out of pocket. Insurers require more data. How can practices improve their revenue cycle management (RCM) process in the midst of all this change?

For some, it may take support from vendors, revisions to internal processes, the deployment of additional technology tools, or a combination of all three, according to experts.

The ever-changing healthcare marketplace

Many of the challenges practices encounter throughout the RCM cycle are outside their control. The current shift in patient payment obligations is one such issue.

“We have a lot of people choosing low-premium health plans for economic reasons,” says Timika Lucas, MBA, president and chief executive officer of Lucas RCM Consultants Inc. in Hazel Crest, Ill.

Magnifying the effects of that trend is the move toward high-deductible plans as consumers seek to more closely manage their healthcare expenses and usage. “That’s resulting in insurance companies making patients responsible for a higher percentage of their care costs,” Lucas says. As patients see their out-of-pocket expenditures climb, an increasing number are finding it difficult to pay, or to pay on time.

Recovering payments from patients is a challenge Lucas sees across the private practice spectrum, particularly when the dollar amounts are higher. Working with a multitude of payers - a portion of the industry also undergoing significant changes in the current environment - presents its own difficulties.

“A lot of reimbursement is regional, so it depends on payers in your area and what kind of programs they have and their level of sophistication,” says Drew Borland, chief technology officer at Alpharetta, Ga.-based Philips Wellcentive, a population management and revenue growth platform provider. Navigating through compliance requirements that are still maturing adds to the complexity for practices. “The issues are evolving as we go from an incentive-based world to a value-based penalty world, where if you don’t do things with a certain level of quality, then you can get dinged,” Borland says.

The practice's lack of time, a phenomenon that seems to be getting worse rather than better, is another factor hindering practices’ efforts to recover the highest possible reimbursements. Moreover, physician burnout sometimes keeps providers from focusing on RCM and the components that go into it.

“They don’t always have good knowledge of the revenue cycle, and they don’t have the time to look at it,” says Ginny Shipp, professional services at revenue cycle technology firm Waystar, in Duluth, Ga. She says she doesn’t believe it’s necessary for providers to directly manage the RCM process, but too few have a working familiarity with how the cycle works or what a solid RCM strategy looks like if they do oversee it.

In-house mistakes practices make

Lucas points to common internal work flow issues as another potential barrier to maximizing revenue. She says staff already have a full plate when it comes to complying with payer requirements.

“[Practices] need to make sure that preapprovals are obtained, or they need to make that call to the insurance company to find out if it’s necessary or not,” she says. Insurers may change policies and requirements for certain procedures, but staying abreast of each update is difficult and time consuming.

“Support staff may not have that ability, or they may have staff multitasking and doing more than one job,” Lucas says. Newer practices just starting out often find themselves in this position most frequently, but if staffing is too lean to make RCM a priority, physicians could leave money on the table.

Practices trying to brighten their financial picture sometimes head in the wrong direction because of incorrect assumptions made on a limited amount of data. “They will look at a canned report out of their practice management system, and it shows them something but it doesn’t get to that granular level of what those numbers really mean,” Shipp says.

It's important that a physician identify very clearly where and why their RCM strategy is lagging before they chart a course forward toward a solution. Without that insight, they may end up addressing only the symptoms of an inefficient process, and Shipp says, “They’re not actually fixing the root cause of the problem.”

Getting a handle on RCM

Efficient protocols on the front end can help practices improve their revenue picture. Lucas suggests calling to verify patient information a day or two in advance of a visit whenever possible.

“Make sure the patient demographic information is accurate and updated, along with any insurance information,” she says. “That information being incorrect can cause a ripple effect and have reimbursement delays more than anything else.” A number of EHR and practice administration platforms provide tools to help track patient eligibility and assist in capturing the necessary RCM data. Some also offer practices “warning signs which can help their current staff catch things before they go out to clearinghouses to be processed,” Lucas says.

Back-end processes factor heavily into a practice’s success with revenue improvement. Clinical documentation, for example, must be clear and concise if services are to be accurately coded.

It’s also vital that physicians be responsive to inquiries about their documentation. “Coders may need to ask questions about what the provider has documented for that patient visit,” Lucas says. “[The coders are] making sure they’re capturing everything so they can be reimbursed correctly.” An experienced consultant can be a useful resource for examining existing workflows and identifying where internal processes should be improved to secure better reimbursement levels.

Coding protocols are an important area of focus when it comes to RCM improvement efforts. Incorrect and missing codes are frequently the cause of diminished and delayed reimbursements.

“Maybe a person is diabetic and hypertensive but you only coded them diabetic,” Borland says. “Comorbidity pays better than a single chronic condition.” An experienced coding specialist can often spot these potential errors or omissions, whether that means in-house staff working on RCM-related efforts or partnering with a vendor who can provide that service. New technologies focused on coding optimization - often powered by artificial intelligence engines and vast databases of coding patterns and commonalities - can also help a practice be more accurate and thorough. The results are a higher reimbursement rate and fewer missed dollars.

Simply taking a more prominent role in the revenue process may help physicians maximize reimbursements. Shipp encourages physicians to learn about RCM and gain a better understanding of the process.

“They would be significantly more comfortable participating in helping to maximize that revenue cycle,” she says. “They need to know what the revenue cycle looks like and what the steps are. And it starts when the patient is scheduled.” Knowing that the patient experience plays a heavy role in determining where consumers spend their healthcare dollars, physicians - as the care providers and revenue producers - need to be familiar enough with the revenue cycle to engage in reviewing RCM performance and targeting opportunities to improve. More knowledge may also provide a better footing to make process and technology decisions for the practice.

“You don’t have technology just for the sake of technology, but you don’t kick it out the door just because the patients may not like it,” Shipp says. Practices need to commit to an educational process and making the necessary adjustments when it comes to implementing any new software platform.

Clearing the patient payment discussion hurdle

Developing workable protocols for handling the patient side of the payment equation is an important step. Begin by being open with patients on their likely financial obligations.

“With some insurance companies, you can go online and see how much the patient may have to pay out of pocket,” Lucas says. She adds that discussing payment arrangements and agreeing to a timeline is also a useful strategy. “Give them options, such as payment plans that fit their budget.”

How patients pay, whether it’s by phone, through the patient portal, or even via automated billing if the practice has the technology to support it, should be discussed, along with when payments will be made and the amount of each installment. Throughout the process, practices need to be diligent in maintaining open communication with the patient. Their out-of-pocket estimate may need to be adjusted, or the payment terms amended to keep the financial picture on track.

Some practices will need to take a step back and establish a more formal financial policy when it comes to patient payment responsibilities. “Even if they do have a policy, not every practice is transparent about it,” Shipp says. It isn’t that practices intentionally hide their protocols, but many are hesitant to communicate them openly.

“There’s still a huge discomfort around talking about money with patients,” Shipp says. Taking a look internally at the different types of patients, such as those on Medicare or with high-deductible plans, can help put some structure around the payment options that make sense for each type. Accepting a health care financing credit card or similar program is one point to consider, and if the practice has any other kind of support it can offer the patient, the staff needs to be aware of that and have information ready to hand to patients.

Even as physicians work to improve their revenue management processes, inertia and human nature may still stand in the way. For instance, relying on meeting the various benchmarks popular in the industry can sometimes lead to complacency.

“It’s good data, it’s real data,” Shipp says. “But by just meeting those benchmarks, [practices are] not pushing as far as they could go to capture all the revenue they’re owed.”

If a practice has a 9 percent denial rate when the benchmark is 11 percent, for example, that figure should be seen as offering room for improvement rather than being good enough.

“You have to capture every penny,” Shipp says. “The days are gone where you can afford to write off with insurance companies or patients.”