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Four specific and proactive measures a practice can implement to better position its organization for long-term success.
For years, practices have found themselves in a never-ending battle to adjust to the demands of an evolving healthcare marketplace. Adapting to complicated incentive terms in payer contracts, decreasing payer and patient revenue, increasing operational costs, and keeping up with new legislation have been enormous challenges—especially for those internally managing their revenue cycle. With practices already struggling to stay afloat, adding a year-long global pandemic to their growing list of concerns was detrimental to many. The pandemic not only affected patient volume and revenue but also shifted the healthcare landscape, yet again. Suddenly, there was an immediate need to offer virtual care options and digital registration capabilities, as well as cost transparency and financial aid to patients who desperately need it – as 7.7 million U.S. workers lost their jobs due to COVID-19, with an estimated 15 million also losing healthcare coverage.
These compounding issues have emphasized the need for a strong revenue cycle foundation to sustain unprecedented change. There are a multitude of lucrative opportunities that currently exist within a practice’s revenue cycle, the problem is that many providers are not pursuing every dollar due since they have limited time and resources. While providers’ main focus is rightfully aimed at delivering the highest quality care versus administering the day-to-day operations of their practice, there are ways to propel both business growth and provide patients with the services they need.
This article outlines four specific and proactive measures a practice can implement to better position its organization for long-term success.
Increased profitability is something all practices desperately need and a critical way to accomplish this is to maintain operational efficiency. Costly errors can decrease overall production causing billing delays on top of mounting patient frustration. Technology needs to be utilized in a way that simplifies complex revenue cycle processes and eliminates redundant, time-consuming tasks. For example, instead of manually addressing denials, leverage a robust rules engine that automates workflows to review claims, correct inaccurate information, and submit a clean claim. With this type of automation, practices can work in a standardized manner to process billing and claims more efficiently and accelerate reimbursement. For many practices, implementing and maintaining automation technology can be an expensive endeavor with the speed to value being too great; however, with the help of a partner that has already made the necessary investments, practices can achieve results much more quickly.
Action #2: Reduce overall days in A/R
As physician practices are operating with reduced staff who can only take on so much, critical revenue cycle functions like A/R follow-up tend to fall by the wayside, leading to negative financial impacts. Becker’s Hospital Review reported that the industry standard for days in A/R is 35 days; however, A/R for many practices is past the 90- or even 120-day mark, most likely indicating issues with reimbursement. To address this, practices can leverage a partner’s business office services and technology-fueled workflows to effectively manage billing and appropriate A/R follow up from both payers and patients. Having dedicated resources and the right overall structure in place will ensure your practice maintains accurate and timely patient statements, flags past due payments and confirms payment posting and deposit reconciliation always remains up to date. All these best practices help accelerate cash flow and enable your practice to collect what’s owed.
Given how complicated many payer contracts are, paired with the fact that many practices don’t have access to the type of resources and expertise needed to negotiate and optimize these contracts, many organizations are subsequently leaving money on the table. Practices can increase reimbursement rates with most, if not all, of their payers if they have access to experts who can build a compelling case and utilize data-driven analysis to find opportunities to renegotiate existing contracts. A partner that offers contract management services and solutions can build inventories that assemble a practice’s most frequently billed services, allowing the payer contracting team to analyze critical data points—payer reimbursement requirements, fee schedules, or timelines—and determine if there are openings for negotiations. Regional rates and value-based reimbursement are also considered to identify if a practice can start receiving additional incentives or leverage alternative payment models. Having this inventory and analysis of all contracts and potential reimbursement opportunities allows practices to not only actively monitor contracts moving forward but also gain access to data needed to renegotiate rates and receive better fee schedules.
While boosting revenue and cash flow is vital to a practice’s financial health, it’s equally important for practices to offer services that financially support and assist their patients as well. Financial clearance programs promote mutual benefits to the practice and patient because they ensure the right financial assistance is given to each patient while also ensuring practices receive full payment for services provided. A program with the right processes and technology in place can enable practices to screen and verify patient eligibility as soon as possible, educate patients on out-of-pocket payments upfront so they can plan accordingly, identify patient funding support if needed, and obtain required prior authorizations to avoid care delays and timely reimbursement. Offering this type of service allows practices to serve as financial advocates for their patients building loyalty and trust within their patient roster—a key advantage in healthcare’s competitive marketplace.
When determining where to go from here, stop focusing on the short-term fixes that allow your business to just get by. Consider a partner who can provide revenue cycle expertise – fueled by automation and bench strength when needed – to perfect internal processes and workflows. By doing so, you’ll be able to re-focus your efforts on your core mission of providing excellent patient care while also yielding better overall financial performance.