According to an April New York Times article, healthcare spending in the United States has slowed significantly over the past few years. Numbers from the Centers for Medicare and Medicaid Services (CMS) show that in 2009 and 2010 total nationwide spending grew less than 4 percent per year, representing the slowest annual growth in more than 50 years. Although this slowdown may not seem unexpected given the current state of the economy, it has been sharper than experts anticipated, pointing to the possibility that factors other than the recent recession also affect spending. This is significant because it may mean the slowdown will continue even as the economy picks up. However, there is good news and bad news with flattened spending.

On the positive side, it could lessen the impact of healthcare costs on household budgets and ultimately strengthen the country’s fiscal health. For example, if Medicare spending grows only 1 percentage point faster than the total economy, the long-term deficit for the United States could fall by more than 33%. On the other hand, reduced spending means less income for hospitals, physician practices and other healthcare organizations. In a time when cost margins are already tight, lessening income could be potentially damaging for many organizations.

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Practices that want to thrive in the current healthcare environment must have deep insight into their performance on key revenue cycle metrics. That’s why Texas Retina Associates—a 14-office sub-specialty ophthalmology practice—began looking for ways to easily quantify rejections and denials. The group wanted to be able to scrutinize the data and identify opportunities for improvement.

The goal was to proactively address any trends in the revenue cycle that were negatively affecting the number of rejected and denied claims. The practice believed that uncovering the root causes of rejections and denials would have a powerful impact on the entire revenue cycle.

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Many practices around the country use a clearinghouse or want to incorporate one into their workflow. While clearinghouses are commonplace today, I am still often asked what practices should look for in a good clearinghouse and how they know a clearinghouse will benefit their practice. So how should you evaluate your current or prospective clearinghouse?

Evaluating and selecting the right clearinghouse is the first step to proactively managing your revenue cycle and maximizing profits. As the demand for physician services rises, profitability levels don’t always increase proportionately, which often causes the revenue cycle to suffer. Knowing what to look for when partnering with a clearinghouse can help you ensure your practice receives full, timely reimbursements.

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Clinicians and billing professionals alike know measuring cash flow is essential to making sure they have financially healthy medical practices; however, there are other key metrics, such as days in accounts receivable (A/R), that should be evaluated to ensure optimal revenue cycle performance.

Simply put, days in A/R is a measure of the amount of time it typically takes for all responsible parties to pay the practice for a service; it represents the number of days that money owed to the practice is outstanding. The impact days in A/R has on your revenue cycle is pretty clear – the longer it takes to collect payment for services rendered the slower your cash flow is. This, in turn, influences how quickly you can pay all your other bills.

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The New Year always brings new challenges for healthcare organizations, and 2012 is no exception. Case-in-point: The transition to 5010 is already testing the financial health of practices—and that only took effect on January 1.

While much of the 5010 transition seems to have progressed smoothly, it’s imperative that practices across the nation carefully monitor their cash flow and bottom line throughout the year to make sure that this trend continues. Spikes in rejections and denials, for instance, can be the first warning signs of problems—and may or may not be related to the 5010 transition.

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Thank you to everyone who attended our latest webinar on January 5, Reimbursement Reality 2012: The Challenges – and Opportunities – for Medical Practices. Nationally recognized revenue cycle expert and author Elizabeth Woodcock, MBA, FACMPE, CPC, led the one-hour event, which focused on the challenges and opportunities reimbursement and payment programs offer for medical practices in 2012. During the webinar, she offered advice about how to:

• Leverage the key changes in 2012
• Manage the increase in patient financial security
• Successfully participate in the government’s incentive payment programs

To learn more about how your practice can stay as profitable as possible in 2012, click here  to download this webinar.

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Almost every industry article written today about revenue cycle focuses on how to streamline and improve the process. Although there are a lot of ways to streamline a practice’s revenue cycle, in my practice experience, I found that consistently implementing three key activities can help enhance staff workflow, reduce claim denials, and ultimately improve a practice’s bottom line.

The first of these activities is verifying insurance. While this may seem like a self-evident step, many practices neglect to perform this critical task—and for understandable reasons. Many practices simply don’t have the staff resources for what too often is still a manual chore. If they do perform it, practices often wait until the patient is standing at the front desk.

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In today’s economic environment, the timely collection of all earned revenue is not a luxury—it’s a necessity. That’s true for all practices – not just specialty ones. At Regional Urology Enterprise, for example, I’ve had to navigate the revenue pitfalls associated with imaging and radiation treatments. What I’ve learned, though, is practices that leverage technology to improve efficiency, streamline workflow, and proactively identify and respond to systemic issues can ensure they collect all the money they earn.

I consider my practice’s automated clearinghouse as one example of technology that kills two birds with one stone: it improves our overall performance while it also enhances the bottom line. We use it in a variety ways, but most notably to:

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It’s that time of year again. Medicare fees are in danger of being slashed for 2012 and your revenue will be impacted.   Bah humbug! Since Medicare is a huge payer, almost every medical organization across the country will feel the impact of any cuts that are made. So, it is important to know how to quickly calculate the potential impact on your overall electronic payment revenue.

For this blog, I am going to use the following formula to determine the percentage impact to overall monthly electronic payment revenue:

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2012 will bring many new challenges and opportunities for managing reimbursement and payment programs at medical practices. Are you prepared to help your practice avoid pitfalls and take charge in the coming year?

Join us on Thursday, January 5 at 1:00 pm EST, for a complimentary webinar, Reimbursement Reality 2012: The Challenges – and Opportunities – for Medical Practices. Register Now.

During the one-hour webinar, nationally recognized revenue cycle expert and author Elizabeth Woodcock, MBA, FACMPE, CPC, will offer advice about managing the reimbursement environment and will discuss:

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