With reimbursements declining and costs increasing, managing your practice’s revenue cycle has never been more challenging or important. Over the last few years, practices have realized that they cannot afford to ignore the state of the economy or the pressures being placed on profits. Although the economy is showing signs of recovery, there are still other challenges that will impact revenue in the near future, including proposed Medicare cuts, the transition to ICD-10 and increased patient responsibility.
Adding to these trends is the pressure of implementing or upgrading an electronic health record (EHR) in order to achieve the government’s new requirements for ‘meaningful use.’ In the face of these pressures, now is an opportune time to re-examine your practice’s operational processes, especially your revenue cycle. You just may find that reengineering the revenue cycle will be the key to surviving – and thriving – in these turbulent times.
Because the revenue cycle is a core function to remain in business, it’s best to approach any changes you make as a series of carefully planned steps. The following seven steps are crucial starting points to revamping your revenue cycle:
1. Review your payer contracts – Leveraging data and new payment schedules can help you renegotiate the terms of contracts and can help your practice obtain more satisfactory terms or even an increase in the fee schedule.
2. Implement a financial clearance process – As the financial responsibility of each patient continues to increase, some may not be able to assume this burden. A financial clearance process is a pathway to transition the patient into a financial assistance program, which can lead to positive returns for your revenue cycle.
3. Collect payments at the time of service – Collecting payments at the time of service can help your practice reduce the number of unpaid co-payments, deposits and balances—ultimately reducing the amount of money your practice tries to collect after the patient leaves the office.
4. Deploy technology – Today’s technology focus is often on EHRs, which provide significant clinical advantages. However, there are numerous additional opportunities to improve practice operations by automating aspects of the revenue cycle, including insurance eligibility verification, charge capture, clearinghouse, and payment monitoring. Together these items can completely change the way that your practice works.
5. Prevent and manage denials – Managing denials through a systematic process of reviewing every rejection for correctable errors can help reduce debt that practices write off. Additionally, this process ensures that your practice will track denials—including reasons for the denial—to help identify new opportunities to make your revenue cycle run more efficiently.
6. Reengineer your collections cycle – Develop a 90-day billing cycle that starts with sending out a statement as soon as the amount of patient responsibility is established. This will help create a steady flow of collections and reduce delays in the process.
7. Develop a dashboard of revenue cycle indicators – A well-managed revenue cycle is not complete without measuring and monitoring key performance indicators. Determine all of the metrics you want to regularly monitor and include them on your revenue cycle dashboard.
A consistent system is essential to a healthy revenue stream and satisfied patients, and these seven steps can help you implement that system at your practice. Download the free white paper, Seven Steps to Improve Your Practice’s Revenue Cycle Management, to learn more about each of the steps that will help your practice maintain or improve its revenue cycle.