It’s Your Money! Keep It!

Mike Mast

Have you ever “left money on the table”?  Chances are good that we’ve all heard that expression at one time or another.  The question always comes up… why are you leaving that money on the table?  Why wouldn’t you do the work necessary to take that money off the table and put it in your wallet?  Now what if in this case we are not talking about leaving the money on the table, but instead leaving money in your revenue cycle?  Your practice has worked hard, provided a service and you deserve to get paid for it.  But why do many practices continue to let money sit on the table instead of their wallets?

We all know that the business side of providing healthcare is extremely complex.  It requires a tremendous amount of focus on all kinds of variables.  Providers are continuously looking at their strategy and evaluating it to make sure that they are focused on the right elements that help them not only deliver great patient care, but to do so in a profitable manner. Whether you’re managing the billing for a large academic hospital a 100 physician group practice or a 5 physician practice there a ton of opportunities to lose track of claims or miss out on opportunities to maximize your net.

Just how important is it to maximize your revenue cycle performance?  Here are a few facts:

  • In Q1 of 2011, one in five healthcare providers is operating in the red[1]
  • Margins for US-based hospitals are thin: 4.1% on average for major teaching hospitals and 1.7% on average for large community hospitals[2]
  • Between 2005 and 2010 non-labor expenses in healthcare increased by 20%[3]
  • Between 5-10% of claims submitted by providers are delayed or lost between claim submission and remittance[4]

Furthermore, providers are managing adherence to government mandates while trying to stay ahead of reimbursement changes. While it’s easy to put off fine tuning your revenue cycle it’s actually more important than ever to make sure that it runs like a precision instrument. This challenging environment requires absolute attention to revenue cycle performance and, regardless of practice size; there are untapped opportunities that many organizations leave unexplored.

At GE Healthcare, we look at revenue cycle optimization in three ways: Accuracy, Speed and Transparency

Accuracy

Today we are seeing a shift in providers moving their focus from the back-end of the revenue cycle up towards the front-end by addressing financial clearance of the pre-visit workflow.  A good example here is the implementation of electronic eligibility verification. By taking the step of verifying a patient’s insurance information in advance of the appointment you can create an accurate picture of coverage as well as the patient’s payment responsibility.  Helping the patient understand their responsibility can help set the expectation with the patient that they’ll need to address their component of the service either up front or when they receive their bill. You’ll also likely see fewer denials as a result of having accurate information related to a patient’s eligibility.

One of the best ways to ensure that claims get paid quickly is to ensure that your claims are accurate. It sounds simple enough, but it’s not that easy. Claims that contain inaccurate or incomplete information will ultimately result in costly rework, delay in reimbursement or, in many cases, cause the provider to simply write off the claim. Clean claim rates are generally very high, but if you are experiencing a clean claim rate under 90% then you still have plenty of room for improvement. By focusing on the long term impact of minimizing any inaccurate claims your practice should see a pretty significant impact to the bottom line in the way of more dollars coming in and less costly rework.

Speed

Speed is fundamental to reducing A/R Days, and the fastest way to process claims is electronically.  Today, 95% to even 98% of your claims are likely being processed electronically[5]. The higher the percentage, the better the performance.  Furthermore, we believe that about 75% – 90% of remittance is processed electronically[6]. For the most part, that’s table stakes. If you are looking for the big win when it comes to speeding up of your medical billing process you need to look towards tightly integrating EDI services with your practice management or revenue cycle management solution.

EDI and practice management integration enhances your ability to process payments quickly in a variety of ways.  First, integrated workflow serves to reduce labor costs associated with claim submission, tracking transactions and hand posting. Second, integrating EDI data into your practice management solutions means you aren’t making errors by hand-keying data from one system to another.  Third, integrating claim scrubbing prior to submission enables you to fix issues that might result in a rejection before they can delay payment.  All of this translates to speed which in turn translates to improved revenue cycle performance. It’s important to note that not all vendors are created equal when it comes to developing, maintaining and enhancing integration between the EDI gateway and your practice management system.

There are also significant speed improvements on the horizon. For example, real-time adjudication is becoming a reality.  Between 7% and 10% of payers now offer the ability to submit a claim electronically at the point of service[7]. Real-time adjudication represents a significant step in building speed into your revenue cycle.

Transparency

Transparency is possibly the most important focus areas and we want to achieve transparency in different areas of the revenue cycle.  What do you know once those claims are submitted?  Do you know that they have been accepted by the payer?  Do you know if they have been delayed?

Providers should strive to understand where their claims are at any point in the process. Knowing what has happened to claims as well as denials and rejections once claims have been submitted is a critical step if you are going to attempt to mitigate the negative impact on cash flow.  A missing or lost claim file could have an enormous impact on your practice. Yet, transparency alone isn’t enough, what providers need is insight.

Insight isn’t just knowing that a claim was rejected. It’s knowing when it was rejected and how much was rejected.  Or, if it was just denied, how much was denied?  If you don’t have great insight into what is taking place once a claim is submitted then you are losing your ability to address issues before they cost you considerable time and money.

Summary

There are numerous opportunities to enhance the performance of your revenue cycle and it’s more important than ever to make sure your revenue cycle performs at its best.  By focusing on accuracy, speed and transparency you are very likely going to see a significant impact to your bottom line.

Interesting in learning more?  Check out Andrew Frost and Michael Mast presenting “It’s your money, keep it!” at HIMSS 2012 in the GE Healthcare booth.



[1] Thomson Reuters, HealthLeaders FactFile, October 2011

[2] Thomson Reuters, HealthLeaders FactFile, October 2011

[3] Thomson Reuters, HealthLeaders FactFile, October 2011

[4] GE Healthcare analysis of Centricity EDI Services gateway transaction data

[5] GE Healthcare analysis of Centricity EDI Services gateway transaction data

[6] GE Healthcare analysis of Centricity EDI Services gateway transaction data

[7] Centricity EDI Services gateway payer data


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