A successful Revenue Cycle Management (RCM) stands on a transparent billing and collection strategy. Understanding common practice challenges for RCM requires strong integration throughout the entire organization.
How to Operate Your Revenue Cycle Management Properly
The building blocks of a seamless RCM service require having strong communication throughout the practice. This involves full transparency from the entire administrative team and their physicians.
To grasp what it takes to have a structured process and how to properly deal with the common challenges along the way, it's critical to analyze: where a revenue cycle starts, the process after a patient visit, and the steps taken towards collection.
For full transparency on RCM, this article will explore the process touching on both in-house and outsourced services.
The Start of the Revenue Cycle
It all begins with a patient appointment. The patient needs to be scheduled appropriately to maximize the physician’s time, minimize wait, and ensure appointments are met. During the patient registration stage, the administrative team reviews medical records, billing records, and insurance coverage.
Because so much information is taken down, there is a lot of room for human error. On average, practices' that stay in-house experience missing patient demographic information with 80% checking eligibility and only 24% with every patient visit.
Utilizing an outsourced service will streamline efficiency and reduce time spent fixing human errors - allowing you to spend less time plugging in information, and more time dealing with patients.
Post Patient Visit
Following a patient visit, the administrative team takes the lead and analyzes claims and the medical billing process. Within this process there can be a plethora of issues from claims not being re-worked or worked at all, extending to other clinical problems involving denials or rejections.
Some of these claims could go through clean, if the right information was collected up-front, and codes and modifiers were correctly entered into the system.
American Medical Group Association survey provides insights into RCM metrics at U.S. medical practices, including denials and claims. It stated upon first submission, the average amount of claims rejected or denied was 5.5% among respondents. Half of respondents said their practice's denial rate was 5% or below, with a quarter of them reporting a denial rate of more than 10%.
These numbers represent the average amount of denials from practices that do not outsource. Those averages drop significantly while outsourcing RCM services.
Patient Collection Process
The final process within the RCM involves collecting the patient payment. The roadblock many practices' encounter come from payments not collected within a certain time frame.Typically, the practice will send out a receipt/statement, and if the client does not pay during a specific time it is then sent through collections. Healthcare Dive discussed analytics that weighed in on the difference between payments collected through in-house and outsourced billing:
"Patients are more likely to pay balances not covered by insurance when revenue cycles are outsourced — 38.72%, compared with 36.73% for in-sourced systems."
This issues from billing in the final stages of the RCM process can begin to build up problems and tedious administrative work pertaining to collections - which could have been avoided with proper point-of-service communication.
By utilizing a partnership with a RCM service, you can be at ease knowing that those common issues throughout your process are fully covered.Most practices choose to handle billing and RCM tasks in-house, due to the feeling of greater control and reduction in costs. However, if your practice is experiencing the scenarios discussed in this article, perhaps it may be time to explore moving away from in-house billing.
Some specific Issues a practice can benefit from through outsourced RCM:
Analysis of denial trends and real-time reports on denial data
Average net patient accounts receivable days tremendously reduced.
Performance improvement planning and support
Patient accounting system evaluation and optimization