A smooth and efficient revenue cycle is a medical practice’s most important systems-related consideration when it comes to maintaining a timely and robust cash flow. When there are delays and inefficiencies in activities that generate revenue, the impact falls squarely on the practice's bottom line.
1. Understand The Medical Revenue Cycle
Knowing the touchpoints that impact billable charges in your practice is an essential first step in identifying where there might be bottlenecks and areas for improvement. Most practices’ revenue cycles have seven steps, each with their own unique considerations:
Preregistration
This first step is the most important in the entire cycle. It’s where you’ll capture the patient’s insurance info and eligibility in real-time through a clearinghouse, and find out the specifics of their coverage, deductible, co-insurance, co-pays, and whether a referral is necessary to see a specialist.
This is also an essential opportunity to discuss the practice’s financial policies with the patient, including time of payment, payment methods accepted, and cancellation policies. It’s important to set the tone that your practice is firm on payment expectations at the start of the financial relationship. When the phones are ringing and people are waiting, it’s easy to skim over or skip this part, but it’ll save lots of time and headaches later.
Registration
When the patient arrives at the practice, the registration staff should confirm that the patient’s contact and insurance information is correct and collect co-payment. For specialist visits, it’s also important to confirm that a referral or authorization is in place before the patient is seen. Without either, it’s unlikely the practice will be paid for the service after it’s provided.
Charge Capture
Translating the details of the care provided during each visit into the billing side of the practice, either manually or through automation, should focus on accuracy, completeness, and timeliness. Accurately documenting the things you were considering in your medical decision-making is critical to attaining the proper level of service. In addition, documenting all testing and procedures is essential to making sure things like ancillary services are captured.
Claim Submission
This is where the practice looks carefully at its charges by reviewing the CPT and diagnosis code pairing to make sure everything is correct before it goes to the insurance carrier. The cleaner the submission, the quicker the payment.
Remittance Processing
As remittances come in, they should be double-checked for accuracy and completeness. Have a process in place for reviewing the explanations of benefits and whether allowables match the contracted amounts. This step is sometimes overlooked by practices that rely on electronic posting, where it’s easy to post remittances and never see them again. But when the process and reports aren’t reviewed, practices miss appeal windows for correcting mistakes or catching errors in the practice management system. A more active review of remittance processing will also inform an accurate fee schedule, which should be constantly monitored and updated at least annually.
Insurance Follow-Up
In this step, practices take a careful look at what items have not been paid and seek to find out why. Looking at the accounts receivable aging report is a smart way to see what’s getting stuck with the insurance company, for how long, and if the follow-up process could use some work (for instance, assigning staff to specific carriers, cross-training the team, identifying areas where appeals could be prevented).
Patient Collections
It’ll come as no surprise to most practices that this step's success rate is usually the most challenging. As we’ve discussed before, the best time to collect payment is while the patient is still in the office. This is where expectations set in step one can help patients be prepared to pay at the time of service. When that’s not possible, a regular statement cycle ensures that patients will receive an invoice every 21 to 28 days with increasingly stronger dunning messages (typically 3 statements in total) before reviewing for collection agency placement.
2. Leverage Automation
Busy practices can benefit from reducing the more mundane but essential tasks off staff plates wherever possible. Look for ways to automate and streamline portions of the revenue cycle to establish consistent procedures and a timely cadence of activities related to cash flow. Tasks that technology solutions can effectively automate include scheduling, appointment reminders, registration, insurance verification, charge capture, and collections.
Automation can benefit patient relations, too. Patients value the right balance of personal interaction and efficiency, especially regarding “have-tos” like their medical care and bills. While some practices assume that automation is automatically impersonal, auto-generated communications can be warm and welcoming with carefully chosen language, opportunities to personalize with a patient’s name, and an easy and intuitive user interface designed to make interactions with your practice quick and frictionless.
3. Implement A Clear And Transparent Financial Policy
A financial policy that’s carefully considered and clearly communicated is the best way to avoid confusion and delays in payment. When patients understand exactly what’s expected of them in terms of payment at the time of service, fees associated with things like appointment no-shows and returned checks, and the financial implications of accounts being sent to collections, they’ll be more likely to remit payment as requested upfront. A smart financial policy not only keeps revenue streams moving at pace, but it also reduces the amount of staff time spent chasing down patient payments instead of focusing on other important parts of the revenue cycle.
4. Prioritize Communication And Collaboration
Communication and collaboration between all departments and staff in the practice is key to maintaining a fast and efficient revenue cycle. It’s not only important to routinely talk about where there are bottlenecks, questions, or ongoing issues with patient billing or insurance, it’s also helpful to have established protocols and processes for finding solutions.
Clear and consistent communication is equally important in patient-facing protocols, too. Making sure that front office staff are properly trained and equipped to handle patient questions, grievances, and billing-related issues helps prepare them to communicate expectations with patients before and during their visits so that everyone is on the same page about timely payments.
5. Revisit All Of The Above Regularly
Revenue cycle maintenance isn’t a set-it-and-forget-it endeavor. Schedule time to take a careful look at each step of the cycle at regular intervals throughout the year to see if issues or changes have emerged quietly over time. Review your employee onboarding process to make sure training adequately equips new hires to seamlessly integrate into the practice’s established revenue protocols. Update grievance procedures to expedite solutions. When you’re notified of changes to compliance requirements, have a plan in place to quickly address them within your system.
By understanding the medical revenue cycle and implementing strategies to speed it up, medical practices can improve their bottom line and provide better service to patients. For access to insightful and actionable info on topics like these, join Med Practice Made Perfect, our resource hub for medical practice partners and managers.