These solutions can see you through some of the greatest revenue cycle challenges this year.
Financial pressures are reaching a tipping point in today’s physician practices. Across my 30-plus year career as the owner of a growing orthopedic practice, I’ve watched a relatively simple medical billing process devolve into an entanglement of regulations, complicated insurance requirements, and now patients – a non-regulated entity – are quickly becoming the largest payer. Add to that the recent impact of the COVID-19 pandemic and shrinking reimbursements, and it’s no wonder so many practices are struggling to stay afloat.
Similar to treating medical issues, physician practices must have the ability to diagnose issues in the revenue cycle quickly, implement change and measure in real-time the effectiveness of the changes made. For example, the days of submitting an insurance claim and getting paid within 30 days are gone. If billing issues are not identified immediately and caught before claims go out the door, denials begin to mount up, and often, practices find that it’s too late to recover reimbursement. Many times, changes to people, process and technology are required to ensure a healthy revenue cycle.
As an orthopedic surgeon, I understand the frustrations. Reimbursement for hip and knee replacements have been on the decline for 30 years. Like most physician practices, financial well-being—and the ability to stay independent—for my group now rests with implementation of processes that speed revenue, ensure accurate capture of all monies owed and reduce my cost to collect.
Running a practice like a business does not come naturally for many physicians. Yet, survival depends on knowledge and transparency into daily operations. Many physicians lack awareness of the tools and strategies available that can transform revenue cycle operations into a well-oiled machine. Understanding how the right infrastructure can address key challenges is an important first step to better financial health.
Challenge: Hiring, retaining and measuring administrative employees amid staffing shortages
Today’s providers face a perfect storm of staffing and workflow issues. The overall cost to collect continues to increase due to requirements associated with an evolving regulatory landscape, high staff turnover and demands for higher compensation. Exacerbating the challenge is a shortage of qualified revenue cycle professionals and the inability of practices to measure the effectiveness of their staff based on the financial outcomes they drive.
Understanding staff effectiveness can be the difference between having a billing team that generates revenue and one that is leaving money on the table. Today’s revenue cycle leaders must have access to the kind of structured data that empowers them to move from basic intelligence to effective intelligence— a model that enables users to execute tasks more effectively and managers to understand the effectiveness and bottom-line impact of each revenue cycle team member.
Practices must work smarter to do more with less while keeping the revenue cycle engine moving. The overriding challenge is transparency into day-to-day priorities and activity—as well as staff effectiveness. The reality is central billing offices often spend up to 80% of their time working claims that are going to be paid timely without intervention.
Getting out in front of potential issues while ensuring staff are making the best use of their time requires work drivers to automate manual processes and provide insight into revenue cycle staff productivity and more importantly, effectiveness. For example a busy orthopedic practice like mine might employ a billing team of 8-10 without the right technology in place and no way to measure the financial outcomes that staff are achieving based on the actions they are taking.
Solution: Workflow automation technology is the only way to achieve transparency into revenue cycle staff effectiveness – and this data doesn’t exist in a practice management system. The right workflow automation solution will capture the right structured data that tells the story of employee action to financial outcome or no outcome. Centralized workflow visibility also allows management to monitor where productivity and effectiveness may be lagging or where staff can increase the value of their efforts. When staff are working effectively, your cost to collect will be minimized and your net collection rate will be maximized leading to a positive impact to your practice’s bottom line.
Challenge: Incomplete patient information at the time of the appointment
In the past, it was common practice for physician groups to overlook patient balances. With insurance covering the majority of payments, the business case for minimizing confrontation with patients was an easy one to make.
That is no longer the case as patient responsible balances continue to increase amid rapid growth of high deductible health plans. It’s not uncommon for patients to have deductibles of greater than $1,000, and physicians can no longer afford to leave that money—which can equate to millions annually for some practices—on the table.
Getting ahead of this trend starts with engaging patients prior to service and at the time of service – not sending a statement after the appointment and waiting for payment. Administrative staff need to understand where payment is coming from and how much the patient owes up front to ensure proper payment is collected timely. Increasingly, patients also expect to have visibility into this information as part of a positive financial experience.
The problem for many practices is resource allocation within a framework of manual processes, lean operations and staffing shortages. Consequently, limited insights exacerbate cash flow issues associated with denied claims, delayed payments and the inability to collect appropriate amounts from patients including prior balances
Solution: Practices should implement technology-enabled financial clearance strategies to complete all the necessary pre-registration steps prior to the patient appointment (demographic and insurance verification, eligibility, authorizations, patient estimates, etc.). The right framework of automation and actionable intelligence can provide administrators with real-time views into patient financial clearance status while equipping staff with work drivers to ensure all information needed prior to service is collected – including balance owed from previous services – up front.
Challenge: Data living in disparate systems without a story
Knowledge is power, yet many physician practices cannot answer basic questions about their revenue cycle. For example: What is my practice’s existing self-pay accounts receivable (AR)? What is my net collection rate? What percentage of my claims are denied on first pass? How many claims on my open AR have not been worked by billing staff or worked more than five times with no financial outcome?
While many EHRs and practice management systems offer standard reports, getting the right data out can still be a clunky, manual process—an effort that most physicians don’t have time to take on. In some cases, your data may be held hostage by different vendors making it impossible to get a full picture of your practice’s financial and operational health. There is a big difference between access to reports and access to real-time actionable intelligence telling the provider where they are leaving money on the table and what to do about it.
With different systems in place, it’s becoming increasingly common to implement a data warehouse. This is a central repository for your data that takes feeds from all your systems to allow for reporting and analysis.
Additionally, today’s practices must have advanced analytics that deliver real-time access to the most important metrics and KPIs (Key Performance Indicators) along with prescriptive scorecards of revenue cycle trends to answer key questions around financial health. With the right analytics infrastructure, executives and physicians can gain insight into negative patterns and trends, monthly comparisons and benchmarks, along with recommendations for process improvement without the need to comb through terabytes of data.
Having the right technological infrastructure in place to support an optimized revenue cycle is an important strategy for sustainable operations and future positioning. As healthcare trends toward value-based reimbursement and transparency, knowledge of the entire revenue cycle management process and the people involved in its success is becoming increasingly important. Taking the right steps now to enhance overall financial strategy will allow today’s physicians and executives to minimize headaches, focus on patient care and get paid for the services that are delivered.
Bio: Dr. William (Bill) Hefley is a partner at Bowen Hefley Orthopedics, a thriving orthopedic surgery practice in Little Rock, Arkansas. He specializes in minimally invasive surgeries for the knee, hip and shoulder, including arthroscopic and joint-replacement procedures. He also founded MedEvolve, a technology company focused on helping physician groups achieve effective intelligence.