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Reimbursement and Practice Management

Revenue Cycle Efficiencies

It’s critical to recognize that your revenue cycle commences with providers. Converting provider time into efficient quality services in a consistent and comprehensive manner is the beginning of a streamlined revenue cycle

After reading this article you will know how to:

  • Describe steps in the revenue cycle appropriate for applying efficiency tools
  • Form protocols for the day-to-day monitoring of claims
  • Organize staff for effective claim management
  • Provide easy patient payment plans

View related pearls

As commercial and government payers continue to exert downward pressure on provider reimbursement, medical practices must boost the efficiency of every process in their revenue cycle. You can only cut so deep before outcomes suffer, negatively impacting your practice's bottom line. A growing number of practices are turning to a performance improvement technique known as 'lean six sigma' to streamline workflow throughout the revenue cycle.

Lean six sigma combines the best of two proven quality management methodologies: lean focuses on reducing waste, variation and cycle time while six sigma promotes a laser-like focus on quality. With its inherent complexity, the revenue cycle is an ideal candidate to get an infusion of new thinking to improve performance. It's critical to recognize that your revenue cycle commences with providers. Converting provider time into efficient quality services in a consistent and comprehensive manner is the beginning of a streamlined revenue cycle.

Start with time. Establish a daily protocol for charge submissions. All office services, including ancillaries, should be captured and verified by cross-referencing the appointment schedule. Build in systematic methods to confirm ancillary charges. Make to include routine checks for accurate National Drug Code (NDC) numbers. An inaccurate or missing NDC number is a common source of claims denials but also an opportunity to improve billing performance.

Create protocols to capture hospital charges: consults, admissions, discharges, visits, surgeries, procedures, and so forth. Too often, physicians' hospital charge information is simply never accounted for. Request access to your hospital's information system, query the patients listed under or with your name, and pull your own face sheets. If access isn't allowed — or, perhaps, just to supplement the effort — deploy an automated charge capture solution, with a verification system to cross-reference services.

For example, if you bill a hospital visit for a patient on both Wednesday and Friday of last week, ensure that your staff ask you about Thursday as well - or that your go directly to the hospital system to see if you documented a visit on that day. In sum, build in redundant processes to ensure that all services are captured.

The key to the quality of the revenue cycle is ensuring all of your time is captured and billed for in a timely, systematic manner.

Match, merge and submit. Once the correct charges are captured and formulated, it's time to match them with accurate patient registration data. Capture demographic and insurance information from patients during the appointment-scheduling process, then your staff need only make a brief confirmation of the information when the patient arrives for their appointment. Use the pre-visit period - to verify insurance coverage, benefits eligibility and financial responsibility.

Hold employees accountable for performing this three-step financial clearance process. Be sure to include protocols that they can use to address any discrepancies or problems that arise. Lean teaches us to perform the steps, but six sigma trains us to identify and address any challenges so that the registration information is accurate once the charge is prepared.

After merging the charges with the patient's registration, transmit claims and statements without fail. Develop a schedule that includes claims transmission each morning. Assign an employee to work and resolve errors — the pre-adjudication edits identified by your billing clearinghouse — by the day's end. Transmit statements with similar rigor. Importantly, set up an account with a continuously open balance for yourself (or your manager) so that you will get a statement each month; it helps to confirm your statements are successfully sent. Verify quality by checking the error queue each month to ensure that charges have not been suspended or otherwise ignored, but rather are on their way to payment.

There's nothing to gain by letting money sit around. Process payments as received and reconcile the bank account with the practice management system daily. To ensure a successful outcome, don't leave this important step until the end of the month. Achieving and maintaining quality requires taking a systematic approach to ensure that the receipt of every penny is confirmed. Keep a log of this daily reconciliation along with periodic assessments by you or your accountant. As claims are paid, execute a protocol to transfer the balance to the secondary insurer or the guarantor in a timely, systematic manner, Look for automated solutions to avoid mistakes or delays in processing reimbursements, billing statements and other actions.

Claims that aren't paid deserve immediate attention. Develop a protocol for denials so that each one is accompanied by its reason and can be routed directly to the staff member who can resolve the problem. For example, a coder needs to assess and resolve the denial related to an insurer that is claiming the patient's diagnosis does not support the rendering of the service. Reduce waste by eliminating the photocopying, filing, routing, and other non-value-added steps in the denial management process.

Six sigma doesn't just focus on streamlining the resolution process; it trains us to prioritize strategies to prevent denials. In sum, don't just work denied claims, gather business intelligence about the volume, type and nature of the denials so that you can pursue more effective efforts to prevent them from occurring in the first place. Indeed, it may take an extra day or two to scrub your charges for errors before submitting them. When weighing speed versus accuracy in the revenue cycle, however, accuracy always trumps timeliness.

Some claims won't get paid — or even denied. For these claims, implement a protocol for timely and systematic reviews of balances outstanding to insurers. Each day, run a report of all unpaid claims that should have already been adjudicated. This daily report could, for example, help you spot the Medicare claim that was transmitted 20 days ago but remains unpaid. Perhaps that claim was never transmitted or the wrong Medicare Advantage plan was billed. Don't just ignore denials due to 'no information,' unless you are comfortable with mounting piles of bad debt, that is. To identify opportunities, establish a schedule to run a routine report in your practice management system — based on your insurers' average payment cycles — that identifies all open claims, how long they've been open and why.

Encourage patients to pay their balances at the point of service or, better still, before they are seen. Patient frustration is another form of waste. It's frustrating for patients to not know that a balance will be due at some point. It's not uncommon for patients to find out months later that they owe money, and often lots of it. Price transparency can actually promote quality. Keeping the patient informed helps the patient to feel empowered with knowledge about the cost of his or her care. Engaged patients will be more willing to pay, particularly when your practice has established protocols to inform patients and collect from them during the same exchange.

For patients who cannot or will not pay at the point of service, establish payment plans to ensure that they honor their financial commitment to you. Guide your staff in establishing these plans by first asking the patient: "How much more time do you need?" You'll be pleasantly surprised how often the patient will suggest a 60 to 90-day plan.

Reduce waste, utilize a secure credit card-on-file program accompanied by a standard protocol to process payments twice-monthly. This protocol reduces the amount of patients' individual payments, tends to align better with most patients' paycheck cycles, and, ultimately, improves your chances of getting paid in full.

The revenue cycle is home to significant complexity, making it a haven for problems.

Deploy lean six sigma to reduce waste, eliminate variation and promote quality outcomes. Your efforts will be rewarded with a positive return on investment - a return that goes directly to your practice's bottom line and, ultimately, into your bank account.

Pearl: We've Got You Covered

While most revenue cycle improvements focus on the practice, it's important to examine the workflow from the patient's perspective. Consider the number of occasions we inquire about the patient's personal data: every time they call, upon their arrival and, often times, on a multitude of forms. Sketch out the entire workflow related to data capture — from the first time the patient calls to the final payment.

Can we gather the insurance policy and group numbers during the scheduling call; confirm the coverage during our automated eligibility process; request to scan a copy of the insurance card; and avoid asking patients to handwrite answers on a series of forms? Or, could we automate the data capture process instead of requiring the patient to handwrite everything (followed by our re-keying it into the system)? Streamline the capture of data, and your patients will thank you — and your practice will benefit as well.

Pearl: In the Know – Sooner vs. Later

Scrubbing each claim for missing documentation, wrong or unlinked diagnosis codes, patient eligibility and other factors is critical to sending out clean claims that a health plan accepts on the first submission. Many practice management systems relegate claims scrubbing to third-party clearinghouses. While accuracy may be improved by using a clearinghouse's claims scrubbing services, it may delay the submission of the claim by anywhere from a few days to a few weeks in some cases.

Using a practice management system that includes or is tightly integrated with claims scrubbing software improves reliability and speed. A so-called "native integration" between a clearinghouse and practice management system may allow your billing staff to see exactly why a claim was rejected, correct it, and even submit to the payer without the claim ever leaving the practice management system, thus saving time and effort while increasing accuracy.

Pearl: Pay Up

Patients don't like being surprised at increasingly higher amounts of their financial obligation for your services. Devising a clear payment policy, putting it in printing and asking patient to review and sign will help to set expectations. It also can provide your practice with legal protection when patients fail to pay. No off-the-self payment policy will work for every practice so plan to develop a policy that addresses:

  • When payment is due. This is usually the date of service, unless the patient and you have made other arrangements, such as a payment plan.
  • Who is responsible to pay. It's important to state clearly and on the printed policy statement that patients with health insurance are responsible for any amounts their plan does not cover and that self-pay patients are responsible for the entire amount of the bill.
  • How co-payments and deductibles will be handled. Will there be any exception to collection of co-payments at each visit? Will patients with large unmet deductibles be asked to make a deposit before receiving a service?
  • What forms of payment are accepted, such as personal checks, debit cards, and credit cards?
  • Your practice's nonpayment policy. The patient should know at what point (such as three months of nonpayment after a service) that you will turn an account over to collection agency.

Pearl: Plan & Simple

Keeping your billing statements plain and simple may help improve patient collections performance. Start by cleaning up the visual presentation and layout of your statements — many times, practice statements appear a cluttered mess to patients. Use plain English and a prominent, brightly colored box to tell patients what they owe (e.g., "You owe this amount") and when payment is due (e.g., "Payment is due by: DATE"). Consider forming a small focus group of volunteer patients who do not work in health care or insurance to provide frank feedback about your statements and their readability. Medical practices find that taking these and other steps to make billing statements more comprehensible to patients results in faster payment.

Pearl: Sliding Scales

Consider developing a sliding scale for indigent services -- 50 percent off if the patient's earnings are less than 200 percent of the federal or state poverty level; 75 percent off for those earning less than 150 percent, and 100 percent for those with incomes equal to or less than 100 percent of the poverty level, for example. Alternately, you may wish to apply one discount for all charity patients — one arrangement might be to forego all fees except for a $50 contribution from the patient.

Before writing down — or off — an account, however, require the patient to present documentation of their charity status. There is no regulation about how to accomplish this: you may rely on an application form that your practice develops for the patient to complete — or request a copy of last year's tax returns to attach to the documentation. Perhaps you'd rather "piggyback" off of the local hospital's efforts to determine charity status, which is certainly acceptable. Regardless of how you substantiate indigency, be consistent in your policy and document everything.

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