Mastering the Revenue Cycle: A Comprehensive Guide for Physician Practices (Part 2)
This is the second article in a three-part series on mastering the healthcare revenue cycle for physician practices. Part one provides a revenue cycle overview and explains common pitfalls. Part three covers how to assess and measure revenue cycle performance.
Effective revenue cycle management in a physician practice requires an understanding of key stress points and the implementation of strong processes in those areas to protect against failure. It also often requires close coordination between the medical professionals, the administrative staff in the front office, and the revenue cycle staff in the back office. Here are a few of the most common revenue cycle stress points and practical steps physician practices can take to reduce the possibility of failure.
Stress point: Follow-up and denial management
Solution: Create a comprehensive denial management program
Denial management starts with denial prevention. That means denial management begins with the registration process and continues throughout all the activities in the revenue cycle. It includes insurance verification, documentation of authorization, and making sure that the provider is enrolled with the patient’s insurance.
Most importantly, the denial management program should include a committee consisting of people involved in the revenue cycle process. This team should provide feedback to those in the practice whose claims have generated denials, work with them to determine the root cause of the denial, implement an action plan to correct the claim where possible, and make sure it is not repeated in future claims. A denial management process is of no value unless it communicates denial and performance information back to everyone in the practice who contributes to the revenue cycle.
The committee members should also assist with any appeals needed, and they should monitor denials monthly to ensure that they are minimized.
Stress point: Capturing charges
Solution: Institute a charge reconciliation program
While denial management focuses on claims that have been submitted, charge reconciliation is necessary to assure that all services provided to patients are captured and billed accurately and timely. Charge reconciliations should be performed with different frequencies based on the activity being reviewed. For example:
- Office visits: reconcile charges to the arrived patients daily
- Operating room procedures: reconcile charges to the final operating/procedure room case logs monthly
- Ambulatory surgical centers: reconcile to the final operating/procedure room case logs monthly
- Inpatient services: reconcile to the performing provider’s completed notes on a monthly basis
Stress point: Coding and documentation
Solution: Implement a documentation and coding evaluation and education program
Accurate documentation and coding are the keys to translating the work of the provider into the language of the insurers and government agencies that will reimburse them for that work. Providers and coders should be evaluated periodically by performing documentation and coding reviews to reveal providers who are documenting and coding accurately or providers who may be under- or over-coding. Coding staff audits will provide information on the accuracy of the Current Procedural Terminology (CPT) codes they selected. The documentation and coding evaluation program should be updated annually and should include an established accuracy standard that is clearly understood by all providers and coders. Those who do not meet the accuracy standard should undergo education and additional evaluations throughout the year until they achieve the accuracy standard. This program can also establish dollar thresholds at which certain more expensive procedures will be subject to pre-coding reviews in order to reduce the possibility of a denial, an underpayment, or an overpayment.
Stress point: Back-office performance and training
Solution: Implement best practices
Many physician practices fail to focus sufficiently on hiring and training the back-office personnel who will be responsible for turning the providers’ work into revenue. The more a practice invests in hiring quality employees and training them thoroughly, the easier and more cost effective it is to manage the revenue cycle. The back-office team should be trained on a set of standard operating procedures (SOPs) that help them focus on minimizing mistakes and maximizing the efficiency of billing and collecting to optimize the revenue cycle.
There are several steps a practice can take to help reduce points of failure in the back office, including the following:
- Working on the exceptions instead of every account (and leveraging technology to do so where possible)
- Ensuring the staff is following SOPs
- Reviewing and updating the SOPs for effectiveness at least once a year
- Reviewing the charge masters on an annual basis to make sure charges are higher than payor allowable amounts
Reviewing secondary claims annually to ensure they are automatically crossing over after the primary payor adjudicates the claim
Metrics can be used to track the effectiveness of your revenue cycle, including the number of accounts worked daily, charge lag, and the review of the appeals process.
Pros and Cons of Automation
There are many kinds of automated solutions available to help support the revenue cycle. They can help with eligibility determinations, verification of benefits, cleaning up (scrubbing) claims submissions, and more. These tools can range from auto-posting software to bots that can automate repetitive staff member tasks. Depending on their purpose and functionality, all have the potential to make a positive difference for a practice when it comes to reducing costs and improving efficiency.
However, no practice should rely on automation to perform tasks or analyze data related to the revenue cycle without maintaining close oversight and review of the results generated by the tools. Programs that analyze a patient’s eligibility or verify benefits can deliver inaccurate results in some circumstances. It’s critical to have employees with experience in these areas review the output to make sure that the services provided are covered and the claim will not be denied. If a practice doesn’t have a human reviewer who understands what the results should be, it runs the risk of significant repeated errors accumulating quickly.
Increasing a Practice’s Revenue Success
In this post-pandemic economy driven by scarce employee resources and a wide variety of technology support, physician practices are challenged more than ever to protect against failures in the revenue cycle. For many, the key is making sure that the medical personnel and revenue cycle staff both understand all components of the revenue cycle and work together to keep the process running smoothly from start to finish. Assessing and measuring that performance will be the next topic in this blog series.
To learn more about possible improvements to your practice’s revenue cycle management, please contact KSM’s healthcare consulting team or complete this form.
The Shared Benefits
Learn more about the clinical and financial benefits of co-management and how it can work in your healthcare system.