In healthcare, the revenue cycle begins when a patient makes an appointment and ends when that particular line item is paid in full. It is not uncommon for one patient to have multiple cycling’s simultaneously. Effective revenue cycle management (RCM) is crucial for financial performance in healthcare.
Optimizing financial performance and improving RCM processes can lead to increased healthcare revenue, reduced costs, and enhanced patient satisfaction.
In this blog, we’ll explore actionable strategies to help you achieve these goals.
Understanding Revenue Cycle Management
Revenue cycle management encompasses all administrative and clinical functions that contribute to the capture, management, and collection of patient service revenue.
From the moment a patient schedules an appointment until their account balance is zero, RCM involves various steps aimed at ensuring healthcare providers are paid accurately and promptly for the services they deliver.
Understanding the steps involved in revenue cycle management can help you find areas for improvement.
- Patient Registration and Scheduling
- Insurance Eligibility and Verification
- Patient Encounter and Documentation
- Medical Coding and Charge capture is completed for the patient encounter
- Claim Submission
- Remittance Processing
- Denial Management
- Patient Billing and Collections for any balances due after insurance payment
- Reporting and Analysis
Revenue cycle management is a complex but essential aspect of healthcare administration. By effectively managing the revenue cycle, healthcare providers can ensure financial stability, compliance, and high levels of patient satisfaction.
Each step in the process, from patient registration to reporting and analysis, plays a critical role in achieving these goals.
10 Ways to Optimize Financial Performance
Here are ten strategies to optimize revenue cycle management and improve financial performance in ambulatory healthcare.
1. Implement Advanced EHR and Practice Management Systems
Advanced Electronic Health Records (EHR) and healthcare practice management systems are transformative tools that can significantly enhance revenue cycle management (RCM) in healthcare. By integrating clinical and administrative functions, these systems streamline processes, reduce errors, and improve financial performance.
Not only do EHR systems like Harris CareTracker’s EHR software streamline administrative tasks, but advanced integrated healthcare systems reduce manual errors, ensure compliance, and enhance data accuracy. For example, integrated medical billing can verify insurance eligibility and provide accurate coding assistance.
2. Regularly Train and Educate Staff
Studies show that coding errors account for approximately 63% of medical billing errors and accurate medical coding can increase healthcare providers’ revenue by 20%.
Additionally, according to the American Medical Association (AMA), coding errors cost around $36 billion annually to the healthcare industry and the average cost of medical billing errors is approximately $100 per mistake. Regular staff training can go a long way to mitigating these errors and reducing administrative costs.
Continuous education and training for staff involved in revenue cycle management can enhance their skills and knowledge, leading to improved financial performance. Provide regular training on the latest billing codes, compliance regulations, and best practices.
Staying up-to-date on compliance and regulatory updates is vital for maximizing reimbursements and improving financial performance in healthcare.
3. Conduct Regular Audits and Reviews
Timely and accurate claims submissions are critical in the revenue cycle, so it’s important to conduct regular audits and reviews to improve accuracy.
Use EHR software to aid in submitting claims efficiently and accurately, however, it’s important to ensure claims are reviewed by healthcare administrative staff and coders to ensure there are no errors.
Additionally, it’s important to perform regular internal audits to identify and rectify coding errors and compliance issues. Regular audits can help to review submission processes for efficiency and identify trends in claims denials so issues can be addressed.
4. Optimize Patient Scheduling and Registration
Patient scheduling and registration are the first steps in the revenue management cycle, so they are foundational to effective RCM. According to data from the Medical Group Management Association (MGMA), the median no-show rates are between 5 to 7% and one estimate suggests these no-shows could cost medical providers around $150 billion annually.
First, it’s important to ensure that patient information is collected correctly to reduce coding errors. And, secondly scheduling processes should aim to minimize no-shows and cancellations.
Practice management software can help optimize patient scheduling, ensure accurate and complete patient registration, and reduce no-shows with automated patient alerts.
5. Enhance Communication Channels
Enhanced communication channels are crucial for optimizing RCM in healthcare. Improved internal communication leads to streamlined processes, accurate information sharing, and better compliance, while enhanced patient communication results in higher engagement, better payment collections, and increased satisfaction.
By prioritizing effective communication, healthcare providers can significantly improve their financial performance and deliver better patient care.
6. Utilize Data Analytics for Performance Improvement
Leveraging data analytics tools can provide insights into financial performance and identify areas for improvement. Track healthcare performance metrics such as claim denial rates, days in accounts receivable, and collection rates.
Data analytics in healthcare are crucial not only to revenue cycle management but for improving operational efficiency and ensuring regulatory compliance. By leveraging data analytics, healthcare providers can make informed decisions, optimize processes, and ultimately deliver better care to patients.
7. Implement Proactive Denial Management
Even with pre-submission reviews and advanced EHR systems, it is impossible to completely eliminate claims denials. Proactive denial management is critical for maintaining financial stability and operational efficiency.
When coding denials occur, it’s critical to address them quickly, so create a dedicated team to handle denied claims and ensure issues are resolved.
Additionally, it’s important to perform root cause analysis on denied claims to determine the cause of the error and prevent future denials.
8. Focus on Compliance and Regulatory Updates
As a part of regular staff training in healthcare, it’s important to include the latest regulatory changes and ensure compliance with all payer requirements.
Advanced EHR systems help ensure compliance with regulations such as HIPAA and ICD-10 through automated updates and built-in compliance checks. These systems also maintain detailed audit trails of all transactions, simplifying the audit process and ensuring accountability.
9. Streamline Billing and Collections Processes
Billing and collections are the cornerstones of financial stability, so streamlining these processes can go a long way to improving revenue cycle management.
Integrated and automated billing systems can help by automating billing processes like insurance verification, charge capture, coding assistance, and claims processing. This improves efficiency, reduces errors, and maximizes healthcare revenue, allowing healthcare providers to focus more on patient care.
In cases with unpaid claims or outstanding balances, having an effective and efficient collections process can make all the difference.
For outstanding claims, EHR software can provide updates on the status of claims and generate reminders for follow-up.
For outstanding balances on the client end, patient portals can support clear communication and facilitate online payments to make it easier for patients to settle their balances.
10. Leverage Patient Portals for Improved Engagement
Patient engagement through EHR patient portals can improve communication by allowing them to view statements and outstanding balances and make payments online. This reduces misunderstandings and reduces the time spent by healthcare administrative staff on billing and payments.
CareTracker’s Integrated Patient Engagement solutions supports patients through every step of the revenue cycle. Before their visit, patients can schedule or request appointments, receive reminder notifications for their appointment, and fill check-in forms and more. After the visit, the patients receive their e-statements, can conveniently pay their bills online, and provide feedback of their experience through surveys.
By understanding their financial responsibilities in advance, patients are less likely to encounter surprises or disputes over billing.
Conclusion
Optimizing financial performance and improving revenue cycle management are essential for the sustainability of healthcare practices.
By implementing advanced technologies, enhancing staff training, conducting regular audits, and focusing on compliance, you can significantly improve your RCM processes and boost revenue.
Consider leveraging Harris CareTracker’s solutions to streamline your practice management and enhance financial performance in healthcare. Ready to optimize your revenue cycle management? Contact CareTracker for more information or to schedule a discovery call.
