Lindy Benton, CEO of MEA|NEA, provides six key metrics to improve the ROI of a hospital revenue cycle management program to get cash in faster with less effort.
Revenue cycle management (RCM) is the process that manages claims processing, payment and revenue generation, and often entails the use of technology to keep track of the claims process at every check point. This allows the healthcare provider billing a patient the ability to follow along in the process and address any issues that arise while also allowing for a steady stream of revenue to enter the hospital or health system.
This process includes keeping track of claims in the system, making sure payments are collected and addressing denied claims, which can cause up to 90 percent of missed revenue opportunity, according to Healthcare IT News. RCM also includes determining patient insurance eligibility, collecting co-pays and properly coding claims.
In a nutshell, RCM moves the claims approval process along and gets providers paid. Of course, electronic RCM claim processing and communications are certainly more efficient than paper. With the masses of paper that practices and hospitals still deal with every day, solutions are dramatically reducing the paper involved here, as well as reducing the time associated with collecting, handling and sorting all of the documents.
RCM: At the Heart of Healthcare
The revenue cycle management process is at the heart of the every practice. Whether one aims to maintain physician compensation at desired levels, keep up with overhead expenses or invest in new technologies, the critical factor for success is efficient management of the revenue cycle. The revenue cycle comprises the numerous tasks of the billing and collection process — gathering and entering data about professional services rendered and ensuring that bills are paid in full.
For both large and small practices, claims with support attachments continue to be one of the main contributors to lengthy processing delays and revenue cycle management hiccups. As providers seek innovations to improve their practice’s flow of cash, they’re forced to eliminate cumbersome administrative functions such as postage and printing costs and reduce copious follow up with payers.
According to a recent study by Experis, more than 90 percent of the processes involved in addressing a denial are manual, paper-based, fax and mail-supported steps that require human and manual operations. Therefore, utilizing mainstream, industry-accepted and proven information technologies, coupled with operational changes, can lead to reductions in manual processes by at least 75 percent, potentially creating quick and more efficient processing of claims.
In addition to accelerating the revenue cycle process, the reduction of people, redundant processes and technology costs associated with the claims denial process also can yield annual benefits in the area of tens or hundreds of thousands of dollars saved per year for an organization. Every step in the medical billing process has the potential for administrative waste: excessive paperwork, back-and-forth interactions between provider and payer, contracts with each payer and varying forms of information exchange with each payer.
For each function and related touch point, a practice or health system establishes and assigns the administrative duties to their respective staff that must be performed during the cycle. Unfortunately, many organizations do not take firm control over each of these processes and employees or departments are left to address them on their own, resulting in slowed practices that can create obstacles between the patients and payers, and peak performance is sacrificed.
Streamlining Revenue Cycle Management
Healthcare organizations can streamline their revenue cycle and doing so will get the cash in faster and with less effort. Improved bottom line means reduced days outstanding in accounts receivable, lower overhead and higher collections. It is, however, worth noting that each major function in the revenue cycle has responsible parties: physicians, non-physician providers, nurses and other clinicians and administrative and billing office staff. Everyone in the practice has a role — often several roles — to play in managing the revenue cycle.
When the RCM process slows, it may be because responsible parties fail to understand their roles within the process. At other times, the process is poorly designed. Perhaps the organization doesn’t provide staff with the tools to carry out the function, or the organization misplaces or loses track of the responsibility for the task in its work flow. The top reasons for denials or requests for information from payers typically arise from a couple areas, including duplicate claims, third-party liability and no authorization. Additionally, claims, denials appeals and requests for additional information are often spread across the multiple departments throughout each organization and these processes can be difficult to streamline across the health system. While dozens of issues can go wrong with RCM, there are a number of things that can be done to speed it up and bring cash into a health system regularly and routinely.
First, organizations should cross train all roles and functions for processing revenue within and across departments. They should share best practices from other departments and create IT tools that facilitate the RCM cycle. For example, create pull down lists that include payer names and their addresses rather than allowing or letting the employee manually enter data. Doing so allows for the reduction of keying and re-keying information for employees
Next, organizations can provide enterprise-wide training, job aid and performance support for those engineering and operating the RCM chains. To maximize the job performance, for example, provide employees with a simple job aid on how to enter, save and select appropriate payer address in the appropriate system. Additionally, organizational IT leaders should provide performance checklists that significantly reduce the need for payers to request additional records by submitting all information on initial claims, establishing competencies for the use of systems and tools, and reinforcing their use across departments.
Improving the RCM process is simple even though it can often look complicated from the long view. Here are a few steps for aligning the process:
1. Provide an up-front patient insurance authorization checklist to staff doing admissions to reduce common error of no-authorization.
2. Receive denial requests in one location (single point-of-entry) instead of multiple places to allow for consistent data collection and to keep better track of time-to-payment received based on types of requests by payer.
3. Build a template or database for the most common types of insurance requests received by payer and the attachments that need to be submitted on the front end with initial claim.
4. Provide items needed from patient authorization/case management checklists, if they don’t already have access.
5. Provide a systematic way for billers to submit attachments that provide necessary information for insurer.
6. Submit necessary documents to the payer; build a database or table of submittal communication items needed and automate this into electronic attachment submittals and responses.
7. Conduct admission process review using best practice research.
Improving Revenue Cycle ROI
To establish additional metrics for a return on investment during the RCM process, the following must be considered:
1. Review lost paper requests/denials (incoming) and (outgoing) to insurer.
2. Review average number of days that denials or requests are in accounts receivable and waiting for payment.
3. Avoid shredding and storing hard copies that are left after fax/denial request is completed.
4. Review average number of appeals per denial/request.
5. Decrease paper costs and labor time to locate answers to questions in large paper claims by using search data mining in electronic attachments.
6. Determine the number of large paper denials that ask for page numbers of key information.
Organizations also should establish a written policy for timely completion of patient records, full and accurate documentation of all services and recorded diagnoses for each visit linked clearly to the services rendered. The policy should also clarify the roles of clinicians regarding waivers and pre-authorization for services. Administrative staff should pay careful attention to the order in which assigned tasks are to be performed. What appears to be a logical sequence on paper may not play out in the reality of a busy reception desk. Provide staff the tools and technology to get assigned tasks done.
As is apparent here and is the case in most organizations, billing, collections and revenue collection is viewed as wholly separate units from the day-to-day activities of scheduling, registering, arriving and treating patients. Essentially, operating an efficient revenue cycle requires practice wide buy-in from most, if not all, areas of the care systems.
RCM as a shared vision
Developing a shared vision of where the revenue cycle begins and recognizing that everyone contributes to its success is the first important step toward a successful outcome. To ensure speed and accuracy, focus attention equally on improving the precision of the data submitted by clinical, administrative and billing office staff.
Another RCM step organizations can take is to change the billing practices. Specifically, stop mailing statements only once a week. This only adds more days to the receivables cycle. By sending statements throughout the week, it spreads receivables out and creates less of a deluge for administrative staff. For example, this will spread out calls from patients who have questions about their bills. The same goes for sending claims to payers. Send them as they are ready, not only on a specific time. Finally, organizations should consider deploying appropriate RCM technology appropriately and leaders should not overlook staff training.
Collecting revenue is the “revenue” in the revenue cycle, and improving management of the revenue cycle starts with staff. Making these RCM approaches work will take an active approach by leadership, and organizations must remember and work to create a culture where hiring motivated people is the norm and provide folks the tools they need to do their jobs.
Lindy Benton is CEO of MEA|NEA, a provider of secure health information and electronic health attachment solutions.