Evaluating Your Revenue Cycle

Does Your Revenue Cycle Need Maintenance?

Many physicians are experiencing a conundrum. They are working longer hours but not making more money. It is a fact that medical practice expenses are on the rise, and insurance payments are shrinking while compliance parameters are increasing. Add to those the problems of inefficiency and the challenges of new technology and it is no wonder doctors feel over worked and under paid. But there may be other areas where a medical practice can leak, or even hemorrhage, money.

Have you taken a close look at your revenue cycle lately?

It may be that your practice’s revenue cycle was effective and efficient when it was first put in place, but, like a piece of medical equipment, the revenue cycle requires care and the occasional maintenance. It is time to take a closer look at your revenue cycle to discover if there is a money leak somewhere in the process. Below are some of the most common areas where the revenue cycle can break down.

Gross and Net Collection Disparity

Gross collections are the amounts you receive for services after contractual write offs are applied. There are times, unfortunately, when a practice only collects a portion of the amount owed. That is called net collection. It turns out that insurance companies have a claim error rate that averages at around 20%. Those are errors that are not to the provider’s advantage. Meanwhile some 65% of medical practices do not appeal denied claims whatsoever. Insure that appeals are a regular part of your revenue cycle. Denied claims should be reviewed on a regular basis (at least weekly) and appealed when appropriate.

Claims Processing Inefficiency

Inefficient processing of healthcare claims costs the healthcare industry some $210 BILLION each year (the caps are for stress). To the average medical practice that translates to 10-14% of its revenue. Those numbers are nowhere near acceptable. A thorough review of your revenue cycle may reveal inefficiencies that could be addressed. An efficient cycle equals more dollars coming in.

Payer Rules

Is your billing staff up to date on the rules your different payers apply to the claims they receive? This can be a particularly difficult issue to address if it has been allowed to get out of control. Ideally, billing staff should make reviewing payer rules a part of their routine, incorporating changes as they come. If you are using an Electronic Health Records (EHR) system, run a report of denied claims from all of the insurance companies you receive payments from. Studying this report will likely uncover payer denial trends and could lead to the discovery of rules that are not being followed.

Patient Contribution

In 2013 patients were responsible for almost one quarter of their medical bills. As high-deductible health insurance plans continue to grow in popularity, we can only expect that number to rise. The problem here becomes clear when we realize that practices, on average, collect only 50-70% of the patient’s responsibility after treatment. Sometimes this comes down to simple communication. There can be no mincing of words when it comes to the patient’s financial responsibility. It is important to collect co-pays before the patient concludes their visit. Many practices collect these payments at check-in, thereby eliminating any confusion.

Staff Training

ICD-10 brought with it a number of challenges to medical billing staffs. New, more specific codes had to be learned and applied in order to receive proper compensation for services provided. The average age of a medical billing professional in the US is 57, and some may look to retire before attempting to tackle ICD-10. Make sure that your billing staff is up to speed on the new codes and using them properly.

ProMD offers a number of billing services designed to maximize the efficiency of your revenue cycle so that you concentrate on providing quality care for your patients. Call us today to find out how we can help you fix any leaks in your revenue cycle.

ProMD Medical Billing is happy to help with your billing assessment needs so you can maximize profits and increase patient satisfaction. To learn more about how ProMD can make your practice run like a well-oiled machine, call 866-960-9558 or fill out our online form to request a billing assessment.

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