If you think revenue cycle management (RCM) only involves billing your patients, then Houston, we have a problem. As indicated in this Greenway Health resource, your RCM strategy should account for the manner in which your practice generates, captures, and collects revenue—and that means getting your whole crew on board with adopting optimal RCM practices. But before you can launch a successful RCM strategy, you should perform a pre-check. Here are a few questions to ask yourself about your current RCM status, as adapted from this Physicians Practice article:
- Does your clinic follow A/R management best practices?
- How long does it take your clinic to collect patient payments?
- How high are your clinic’s write-offs and adjustments?
- What is your clinic’s first-submission claim-denial rate? (Aim for 4% or lower.)
- Have you performed a reimbursement analysis? If so, is your clinic leaving money on the table?
- On average, how long does it take your clinic to collect payments due? Is greater than 10% of your A/R more than 120 days old?
If you aren’t sure of the answers to the above questions—or if any of your answers are cause for concern—it’s time to take action. According to the above-cited Greenway Health resource, “Timely revenue cycle processes are critical to future success and positioning, especially in light of the rise of high-deductible health plans (HDHPs) and the increasing number of patients responsible for their own healthcare costs.” Furthermore, “practices that maintain the status quo in terms of RCM will most likely see a decline in profitability” as the number of patients with HDHPs and health savings accounts continues to increase. Clearly, having a rock-solid RCM strategy in place is mission-critical. But what, exactly, does that endeavor entail? Here are four ways your clinic can reach for the RCM stars:
1. Pre-Initial Visit
- Collect patient billing and insurance information before you even schedule an appointment. Your front office staff should inquire about secondary insurance when they have patients on the phone. Greenway Health notes that “practices only file 59 percent of secondary claims,” which is a loss of revenue most practices can’t afford.
- Make your intake forms available online so you can collect patient demographic information and medical history before the initial visit.
- Verify insurance—including patient eligibility, coinsurance or copay, and deductible. (Be sure you have a re-verification policy, too.)
- If possible, include a financial responsibility section in your patient data collection forms so you can obtain written confirmation of a patient’s understanding of his or her financial responsibility. This is especially crucial for patients with HDHPs and HSAs. (Struggling with collecting patient payments? Here’s how to implement a collections plan. Already have one? Learn how to optimize it.)
2. Before Each Appointment
- Collect the patient’s copay/coinsurance before the first visit to set the financial responsibility precedent—and then follow through at every subsequent appointment. And for the sake of your bottom line, never waive these payments.
- Reduce cancellations and no-shows—which cost your practice a pretty penny—by as much as 30% with automatic appointment reminders via text, email, or phone.
- Be firm with your payment policies and make sure your front office staff understand them—and are willing to enforce them. If you don’t want to treat patients who do not have insurance or patients with overdue balances, then your front office staff shouldn’t let those patients through.
3. During Treatment
- Make sure your providers are up-to-date on documentation best practices to ensure they capture all necessary diagnosis and treatment information. While they may not think of themselves this way, your clinicians are a big part of your revenue-generation and collection machine. No, they’re not taking patient credit cards or posting payments, but as Greenway Health explains, “[the] revenue cycle depends on the complete and accurate documentation of patient information, beginning at the point of registration and extending through the clinical documentation process. One single gap in data can significantly impact revenue streams.” That means your clinicians are just as responsible for RCM as anyone else at your clinic—and if they fail to fulfill their documentation duties, the whole team suffers.
- Bill as quickly as possible after each visit. This Physicians Practice resource explains that generating patient statements once a week improves collections, because patients are more likely to pay if they receive their bill soon after receiving care.
- Reach out to patients who owe you money. Of course, in an ideal world, you’d collect patient payments upfront every time. But in the real world, this doesn’t always happen—and that spells trouble for your bottom line. Greenway Health found that “only 32 percent of patients who owe money receive a collection letter from the practice.” Don’t become part of that statistic; develop a plan to wipe out any outstanding balances quickly.
- Be persistent—but only so long as it’s profitable. You don’t want to be too quick to turn patients over to a collections agency, but there comes a point at which the amount of time and energy you’ve spent trying to collect doesn’t justify the potential financial gain. As the great Kenny Rogers once said, you’ve got to know when to hold ’em—and when to fold ’em.
On a space shuttle, each staff member plays a critical role in the success of the mission—whether that’s to capture and redeploy a stranded communications satellite, or to service the Hubble Space Telescope. The same is true when it comes to RCM, only in your clinic’s case, each provider and staff member is responsible for helping generate, capture, and collect revenue for your practice. It takes only a few small steps from each staff member to amount to one giant leap toward achieving optimal RCM practices in your clinic. By focusing on processes, obtaining critical information, following up, and keeping the bigger billing picture in mind, your clinic can orbit circles around the competition.