Whether or not your fiscal cycle starts in January, the onset of the new year is a good time to take stock of the past year’s performance and set new goals for 2024. One goal that should be on every healthcare provider, hospital, and healthcare system’s list is to examine and clean up your outstanding accounts receivable (AR). Many factors, such as payer agreements, the Medicare physician fee schedule, and your market dynamics limit what you can charge. These limitations make it imperative that you don’t leave money on the table due to addressable weaknesses in your revenue cycle management (RCM) process.
Here are three steps you can take now to shore up AR and position your organization for stronger financial performance in 2024:
1. Establish and Track RCM Performance Metrics
Monitor these key performance indicators (KPIs) that can identify revenue cycle leakage early so you can take appropriate action when a metric falls out of its target range:
- Aging AR — The older the AR, the more difficult it is to collect within timely filing and timely appeals deadlines. On average, the percentage of AR over 90 days should be less than 20%.
- Denials Management — Tracking denied claims to identify why they were not paid upon first submittal can reveal problems with front-end procedures, coding, specific payers, or even with coverage of certain procedure codes.
- Net Collection Percentage — Net collection percentage combines both insurance payments and contractual adjustments as a percentage of billed charges to measure how successful a practice is at collecting the total amount allowed by the payer. A good benchmark is 97%.
- Net Days in Accounts Receivable — Net days in AR is how long it takes to receive payment for a claim. The lower the number, the quicker the practice is collecting for services performed. DSO under 30 days is a good benchmark, with up to 45 days being acceptable.
2. Implement Technology To Optimize Outstanding Receivables
Labor-saving healthcare financial technology can provide controls that save the day for RCM teams. Take advantage of AI-enhanced tools that automate time-consuming manual tasks. Best-in-class solutions can optimize accounts receivable by assisting with eligibility, verification of coverage, prior authorization (PA), and deductible monitoring — all of which can cause snags in the revenue cycle and delay or diminish reimbursement.
The right technology can reduce back-end workload and improve staff productivity. For example, automated demographic verification can return complete, accurate patient data in seconds. Combine it with automated insurance discovery and verification tools that confirm active, billable coverage, and you’re well on your way to resubmitting clean claims that were rejected or denied previously. Don’t forget to target your outstanding AR self-pay accounts; insurance discovery could reveal retroactive Medicaid eligibility and convert a significant percentage of these to coverage. Automated tools for cleaning up your AR include:
- Demographic verification — can help enhance core data for 82% or more of patient encounters
- Insurance discovery — solves “coverage not found” errors and can identify active insurance, including retroactive Medicaid for patients presenting as self-pay
- Insurance verification — confirms eligibility and benefits, and assesses coverage, co-pays, deductibles, secondary coverage, and codes
- Deductible monitoring — monitors when the patient deductible has been met and shifts primary financial responsibility to payers
- Claim status checks — runs multiple claim status checks simultaneously to provide insight into how a claim is progressing and ensures visibility through resolution and payment
- Self-pay analysis — estimates patient’s propensity to pay and determines eligibility for charitable or prompt-pay discounts and payment plans to improve collections
3. Plan for Stronger Financial Performance in 2024
The same technology that can help clean up AR on the back end delivers even more value when applied at the front end of the revenue cycle — as early in the patient encounter as possible. In this era of persistent labor shortages, the significant gains in productivity and efficiency afforded by automated tools combined with their promise of near-immediate return on investment (ROI) are hard to ignore. Best-in-class solutions can find, correct, and verify patient and payer information to capture more revenue and reduce administrative burden. For example, the ZOLL® AR Boost® healthcare financial solution can:
- Enhance core demographic data for 82% or more of patient encounters
- Improve statement delivery, reduce the cost of claims, and accelerate payments
- Find active, billable coverage for more than 30% of patients who do not provide active insurance information (higher for specialties like radiology and laboratory)
- Find $50,000 more self-pay revenue per 1,000 claims
- Improve self-pay collection rates by more than 30%
At the same time, review any payer agreements coming up for renewal. Know your KPIs, know what your competition is charging, and know what payments look like for the same or similar services in your area. A healthcare intelligence data service like ZOLL Claims Clarity provides reimbursement rate data based on adjudicated claims. You can use it to measure your performance compared to the competition and prepare well in advance to effectively negotiate favorable payer agreements.
The new year is the perfect time to review your RCM processes and payer agreements. If you implement best practices and take advantage of available healthcare financial and data solutions, you can streamline workflows, optimize AR, and tee up your organization to capture maximum revenue in 2024 and beyond.