The revenue cycle management process is crucial to the financial health of any medical practice. All parts of the process — from when the patient schedules an appointment to when the bill gets paid — help determine if the practice is reimbursed in a timely manner for care it provides.
To help practices streamline this process, Ralph Catalano, senior vice president of operations for Miami, Fla.-based RCM vendor CareCloud, recently outlined common RCM problems for medical practices and how to fix them.
Problem No. 1: Understanding who impacts the revenue cycle
If a medical practice engages a partner for revenue cycle services, such as a vendor, the practice hasn't transferred responsibility for revenue cycle success to that partner. The practice retains key operational and oversight roles that must be fulfilled.
"For example, what a practice's front-desk people do, what the practice's call center does, what the billing people do and, when looking at the clinical side of it, the documentation completed by the physicians and other providers like nurse practitioners, all of those tasks are essential to making sure the financial side of the practice operates efficiently and the cash keeps flowing," Mr. Catalano said.
Therefore, the individual running the practice, whether it's a physician, a physician CEO or an administrator, must acknowledge the importance of collecting accurate patient and insurance information, making appointments efficiently and getting charges into the system on a timely basis. "Those are all things they control, and if they execute those correctly, they will set up the rest of the process for success," Mr. Catalano added.
Problem No. 2: Forgetting the basics of RCM
It's also important that practices don't forget the basics, such as ensuring accurate and updated information for every patient visit and checking patients' insurance eligibility for updated coverage.
Keeping track of these things means the practice will have the right information to submit a claim to the proper payer. And that, ultimately, will expedite the payment cycle, Mr. Catalano said.
Specialty practices in particular should also concentrate on ensuring they have a prior authorization from the insurance company for the services the patient's coming to them for.
Problem No. 3: Underestimating front desk staff
Front desk staff see patients first, and their work significantly impacts the percentage of claims that are processed successfully the first time they are submitted. They should also be trained to determine if a patient has a co-pay, and to collect any co-pay amount due.
If front desk workers fail to collect the amount a patient owes at the time of service, practices can be forced to incur the expense of generating a statement and, perhaps, following with collection efforts, according to Mr. Catalano. A study from the Medical Group Management Association, for instance, showed the cost of billing for co-pays after the office visit was approximately $8 per bill. This cost included the time it took staff to enter the charge for the uncollected co-pay, generate the bill, post the money collected and any subsequent follow up. The cost also included supplies and postage that would otherwise not have been necessary.
"So a practice shouldn't look at it like people at the front desk are interchangeable parts. They're people that are really important to the financial well-being of the practice," Mr. Catalano said.
Problem No. 4: Forgetting clinical workflow is part of billing workflow
Looking at the billing cycle as a workflow may show practices where there are improvement opportunities. Mr. Catalano said practices should remember the clinical workflow is part of the billing workflow. Many practices prefer EMR and practice management/revenue cycle systems from the same vendor because they are designed to work together seamlessly.
A provider sees a patient, services are delivered, and those services are documented in the EMR. So timely documentation and timely entrance of those charges are key to the revenue cycle process. Mr. Catalano said if a practice is able to see the patient and document the visit all in the same day, it has an efficient workflow and its process for collecting for that visit starts that day.
"It's all about looking at it as a workflow. The doctor that uses an inefficient system or documents whenever they get around to it, may think it's just a drain on them and their time, but it actually delays billing in many cases or causes inaccurate billing," he added. "I think what threatens the existence of small practices in particular is not whether they have enough patients but rather cash flow problems. And a lot of times those cash flow problems come from a poor workflow."
Problem No. 5: Failing to review financials monthly
Mr. Catalano stressed that an organization's practice management system should provide clear, transparent reporting on the practice's finances on a monthly basis. If the practice uses a vendor, it's important to review financials with the vendor to determine improvement opportunities, according to Mr. Catalano.
"That's an opportunity to hold the vendor accountable, but it's also an opportunity to take advice from the vendor on denials and any problems with codes," Mr. Catalano said.
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