Stop Revenue Leaks
Stopping revenue leaks before they sink your medical practice can seem ominous in these uncertain times of healthcare reform. Take control of what you can.
In this article, you will learn how to:
- Implement payment monitoring systems to assure correct payment
- Develop ways staff can help keep providers focused on patient care
- Track revenue cycle performance
- List ways to enhance patient and procedure volume
Following are several time-tested strategies that medical practices can implement to improve their revenue performance and, just as importantly, take actions that stop revenue from leaking away due to errors or inefficiencies – or both.
Monitor Payments: According to the American Medical Association’s recently released 2013 National Health Insurer Report Card, commercial insurance companies’ error on medical claims average 7.1 percent. That’s not the worst of it. One insurer – Regence – registered an alarming inaccuracy rate of 14.97 percent.
While you may be flabbergasted that error rates continue to occur at this pace – even after years of information technology investments by insurers – it’s not surprising to me. I have sat behind many medical business office associates who looked at me like I was nuts when I questioned whether the payments they were keying into the billing system were actually correct.
“Of course they are,” the business office associate typically replies. “That’s what it says on the paper, doesn’t it?”
Underpayments that you fail to catch are among the revenue leakages that hurt your bottom line. Underpayments that you do detect are, in addition to frustrating, opportunities for improvement.
Start your revenue leak repair effort by obtaining the rates directly from the insurance company. Your best opportunity to make a successful request is during the contract negotiation or renewal process. Don’t just accept – “135 percent of Medicare.” Ask the insurer’s representative: What year of the Medicare fee schedule are you referring to? Is there a budget neutrality adjustment applied to that percentage? What is the reimbursement when multiple procedures are performed? There are too many factors that impact rates, so getting a vague percentage is of little help. You need to know the actual rate. Request the insurer’s fee schedule for the procedure codes you use, including the most common modifiers.
Examine the rates – do they meet your expectations? If they don’t, consider negotiating all of them, or perhaps choose a subset that could be eligible for a carve-out. If you are the only physician in your community who performs a certain service, the insurer may readily agree to pay you a higher rate for that procedure code.
Even if there is no room to negotiate, be sure to check the accuracy of each and every payment at the CPT® code level. The majority of practice management systems today allow you to automate this process, but it is of little benefit if you do not load the correct fee schedules into your system – and keep them current.
Manage Schedules Intently: Every afternoon, you peruse the following day’s schedule, and it always looks jam-packed. Yet, as you review patient volume reports later on, a different story may arise. While tomorrow always looks full, it never goes as planned. Unfilled capacity means not only lost payment, but also having to carry the cost burden of that vacant appointment slot.
Proactively managing the schedule is another prime opportunity to stem practice revenue leaks. This is especially important as patient no-shows and cancellations have surged in the past five years, causing daily volumes to soften despite seemingly full schedules.
Develop a reminder process for patient appointments, including a call to the patient 36 hours before the appointment and, perhaps a text two hours prior. At minimum, make a “warm” call – a call from one of your staff – to all new patients. Reduce the lead time for future follow-up appointments from one year to, at most, three months. Reducing lead time will cause your patient cancellation rate to plummet, as well as your no-shows.
Of course, the faster you can accommodate patients, the lower your no-show and cancellation rates will be. Consider ways to get patients in faster, such as setting up a “rapid access” clinic staffed with an advanced practice provider.
Try identifying predictable no-shows – an unassigned, uninsured, post-ED follow-up visit, for example – and double-book that appointment slot.
Perhaps not every strategy will work for your practice, but they are certainly worth a try. Deploying tactics to prevent lost capacity is a key opportunity to improve the bottom line.
Focus Efforts on Your Revenue Cycle: Be careful with adjustments – and I don’t mean rearranging the chairs in your patient reception area. Avoiding unnecessary adjustments – write-offs, that is – can boost your practice’s bottom line. Sometimes, they are generated by business office associates who feel pressured to lower receivables. A thoughtless or lazy employee may decide that it’s easier to write off denied charges rather than pursue payments. Implementing a denial management process is critical to ensure that all charges an insurer rejects for payment are reviewed and pursued.
Request a stack of denials from the past few weeks from your business office manager (if he says there are none, you may have a bigger problem than just a few unnecessary write offs). Review the denials that are most common to your practice – some may be related to referrals or pre-authorizations; others may occur because the insurer asserts that the diagnosis you entered doesn’t support the service you rendered. Hold a meeting with the business office, and document the steps that they should follow to take action on each type of denied charge. In the process, you’ll perhaps learn the steps you can take to prevent the denials from occurring in the first place.
If the associate determines the charge won’t be paid, request that you be allowed to review it before the adjustment is taken, but don’t let that paperwork sit on your desk for two weeks; there are time limits for appealing denials. Alternately, set guidelines (perhaps, denials with charges over $500) that will require your approval before a write off occurs. Audit your billing reports and take a sample of accounts, reviewing any adjustments that were made to determine their appropriateness.
A key revenue opportunity is to develop a denial management procedure that avoids the specter of blindly accepting unnecessary adjustments.
Manage Time: Your time is your most precious asset, and it must be used wisely. Looking for a lab result, searching for a supply, trying to find a nurse – the time you waste in a single day might not look like much, but multiply it by the number days on which you have office hours in a month or a year, and we are talking about serious money – all of it lost. Your time is a significant revenue opportunity so make sure your staff adequately prepares you for the day.
Develop a start-of-the-day checklist for both the front reception area, as well as the nursing team. Don’t leave off the basics – exam rooms cleaned, equipment inventoried in each exam room, etc.
Standardize all exam and procedure rooms, and incorporate labels for drawers and shelves. Mistake-proof the process by adding pictures of the appropriate supply, form, etc, to the inside of each drawer, cupboard and bin. Consider snapping a photo of the setups for your most common exams and procedures; then, place the photos in a laminated photo album. Your staff will appreciate the handy reference, and new staff can use it get up to full speed faster.
Train staff on how to take a telephone message. Sure, message-taking should be a basic skill, but it’s not! You may provide employees answering telephones with customized note-taking forms and scripts to make sure they ask for and get the information you or others on your clinical staff need.
Create a flow station – a small workstation in the hall or alcove with a computer docking station – where messages can be routed to you, ideally, in order of priority. Execute a procedure for sending message replies back to your staff with instructions on next steps. Build a report to track whether your staff is meeting your expectations for accuracy, completeness and timeliness. Develop expectations – in writing – for patient intake, with a list of the specific tasks for staff to perform during the rooming process. Train your staff to work to the peak of their license, so that upon entering the exam room you will be able to focus on providing the patient your unique skills as a physician. Sitting down to do this planning may take some time, but it will be time well-spent. Setting and following up on expectations for your staff can pay off in the form of faster patient throughput.
Implementing these ideas to stem revenue leakage may take a little time. Fortunately, they can be done in a piecemeal fashion, which may be the best approach in the long run: making sure each new monitoring or reporting mechanism is functional and useful before moving on to the next one. In total, the energy and time required to implement these tips – from denial prevention to provider productivity – will be well-spent. Just remember: revenue is not a short-term project; it’s an on-going process that will continually adjust to new regulations, market changes, and the ever-changing policies of insurers. The positive results on your practice’s bottom line, however, are well worth the time.
The Metric System
Monitor revenue flow metrics. At least monthly, review key data to make sure your practice is not leaking revenue or losing patients through inefficiency:
1. Patient access. Measure the average time-to-next-available appointment for new and established patients. Look at how many no-shows, cancellations, and schedule bumps occurred that month. Finally, determine compute new patients as a percentage of total appointments.
2. Billing. Measure your days in receivables outstanding, current outstanding credit balance, and the success rate for time-of-service collection of copayments, coinsurances, unmet deductibles and balances. Other important measures of an efficient billing operation include the adjusted collection rate and the aged trial balance (especially the percentage 120 days or older). Finally, keep a close eye on your payer mix and reports of the cash you in the bank.
3. Productivity. There are a number of ways to measure productivity. One measure of staff productivity is to look at w-RVUs per staff member. Look at work relative value units (w-RVUs) per provider, including advanced practice providers. Other productivity measures of value are: Patient encounters per provider, w-RVUs per encounter, and a running count of the top 20 CPT codes billed. When revenue leakages appear substantial, measuring inbound telephone calls per encounter because they are a rough indication of how much additional patient contact your staff is spending time on.
4. Satisfaction. Whether annually or semi-annually, you can get a good idea of where you stand by looking at measures of patient, referring physician and employee satisfaction
More hours = more patients. Morning appointments are often popular with patients, especially those with inflexible work hours, childcare responsibilities or other time-sensitive commitments. With office hours starting at 7 a.m., your staff also avoid snarled traffic during their morning commutes. Many practices have found success with offering appointments at lunchtime (12 noon -- 1 p.m.), early evening (5 - 7 p.m.) and Saturday mornings (8 - 12 noon). Ease into extra hours by offering them just one day a week or only during the busiest months.
Right Time Scheduling
Keep your schedule on track: don’t start the day with a new patient. New patient visits take longer to process through the front office, and the clinical intake takes a longer as well. New patients have a higher probability of missing their appointments. Avoid seeing these patients at times when a no-show or delay will disrupt the entire day’s schedule. Start with a few established patients at the top of your morning and afternoon clinics so your day is more likely to get started without a hitch.
Features & Benefits
Edits in your electronic health record or practice management system can alert you to correct coding errors or omissions. Most systems offer the ability to incorporate these edits into the work flow, yet some practices do not deploy this feature. It is worthwhile to learn how to build edits and use them. Automating these alerts saves staff time and energy, which can then be put to use researching and correcting claim denials.