This can be done manually or through billing software and can cause fewer ... tasks like scheduling, or outsourcing the
How to improve practice financials A practical guide to revenue cycle management
How to improve practice financials The healthcare industry is in a state of transformation. Regulatory changes including the Quality Payment Program have moved Medicare reimbursement from a fee-for-service model to value-based care. At the same time, patients face uncertainty about coverage from the Affordable Care Act and congressional efforts to repeal it. Add to that increased patient financial responsibility as a result of more than 24% of today’s employees being enrolled in highdeductible health plans.1 With all of these influences, it’s no wonder that physician practices face challenges when it comes to collecting payment and managing revenue. In fact, a 2016 survey from Capital One Spark Business said 69% of physicians and practice owners nationwide cited cash flow and reimbursement as a top concern.2
69% of physicians
and practice owners nationwide cited cash flow and reimbursement as a top concern.
p. 2
What physicians take pains to correct Quest Diagnostics recently conducted a national survey3 asking respondents about their biggest pain points when it comes to the physician billing process. More than half of these respondents were owners, co-owners, or partners in private practice. They cited the following as their biggest concerns in regards to medical billing (respondents were instructed to pick two): Denials from insurance 46%
Keeping pace with evolving requirements from payers 35% 31%
Not having enough time or staffing for billing 28% 27%
Difficulty collecting copays/deductibles from patients Denials from Medicare/Medicaid
19% 15%
Lack of in-house expertise Denials for patient eligibility
Pain point: Denials No one wants their medical payments to be denied. But there’s an important distinction to make between denied claims and rejected claims. Rejected claims contain one or more errors or missing information that is found before the claim is sent to be processed. Because the insurance company cannot pay the bill with an error, the claim is returned to the biller to be corrected and resubmitted. This can be handled fairly quickly. Denied claims are claims that the payer has processed and has deemed unpayable. These can be appealed and sent back for processing, and that can be time consuming.
Common causes of denials include: • • • • • • • • •
Ineligibility Provider out of network Incomplete information Incorrect patient information (sex, name, DOB, insurance ID number) Incorrect provider information (NPI, address, name, contact details) Incorrect insurance provider information (policy number, address) Duplicate claims Improper coding / issues with ICD-10 Untimely filing p. 3
Pain point: Denials You can reduce denials by getting things right the first time. Invest in automated systems that help flag potential errors before the claim is submitted. For example, a practice management (PM) system streamlines the patient check-in process and reduces administrative mistakes. Other procedures can be incorporated into the patient check in, such as scanning photo identification and insurance cards at every patient visit. Call insurance companies to verify eligibility ahead of time. Stay current on billing and coding trends. Use electronic scheduling and the electronic health record (EHR) to submit CPT and ICD-10 diagnoses. Double check your work for missing digits or misspelled names. Follow through with the payer representative working the claim. Communicate with patients about how they want to receive information and submit payment. Certain billing technologies can help to flag potential coding errors before the claim is submitted. Claim scrubbing is the term for using programs to review claims before they are submitted, in order to ensure they are “clean” and meet guidelines from insurance companies. This can be done manually or through billing software and can cause fewer rejections. Posting alerts and notifications to changes within 4872 hours of the date of service. And, of course, being able to electronically submit or resubmit the claim may expedite reimbursement. Finally, consistently follow-up on unpaid claims. Having a low denial rate demonstrates healthy cash flow and, in general, fewer staff members are necessary to maintain that revenue.
Pain point: Keeping pace Keeping pace with evolving requirements from payers is a challenge for physicians who find themselves facing declining reimbursement and narrow provider networks. It can be difficult to stay current with payer contracts, to know how quickly they pay, and to stay current with reimbursement rates for commonly-used codes. Knowing the codes can also be a challenge. ICD-10 codes are but one example. The Centers for Medicare and Medicaid Services and Centers for Disease Control and Prevention have added hospital inpatient procedure codes and about 1,900 ICD-10 diagnosis codes alone for fiscal year 2017. Having a robust EHR, PM, and revenue cycle management (RCM) service can help with changes like these, because those systems include the latest information. This allows the physician to select the correct code while in the exam room and for the codes to be automatically reviewed before submission.
p. 4
Pain point: Staffing Many offices have a receptionist, an office manager, and a medical assistant. But when it comes to keeping up with billing and reworking claims, physicians say they don’t have enough employees to focus on these tasks in addition to everything else that goes into running a practice. The experience and expertise of support staff also makes a difference when it comes to the efficiency and accuracy of your billing procedures. Some practices cope by adding technology that lessens administrative tasks like scheduling, or outsourcing the billing altogether.
Pain point: Difficulty collecting from patients Today employers are trying to manage healthcare costs, and having the employee share a greater portion of the expenses is one way of doing that. Many corporations are offering high-deductible plans, where employees pay a greater share of their medical costs upfront before the plan starts making payments. According to the Kaiser Family Foundation, among Americans age 65 or under who have insurance, 20 percent said they had problems paying medical bills in the past year.4 This means practices have difficulty collecting copays, deductibles, and overdue balances from these patients. That’s why it’s important to check insurance eligibility and to ask for copays, outstanding balances, or deposits up front, as a patient checks in for an appointment. It is also important to get bills processed and sent to patients in a timely manner, and to make it easier for them to pay their balances with credit card—either through a patient portal or other electronic means.
p. 5
Understanding the cost of doing business
26% denial rate unkown rate
The American Academy of Family Physicians (AAFP) says that 5-10% is the industry average, but less than 5% is more desirable.7 With approximately 75% of our respondents above that average, the AAFP estimate may be a little generous. Reducing denials is easily one of the best ways to improve your practice’s financials. There are many reasons a claim is denied. Survey respondents said claims are most commonly denied for these reasons (respondents were instructed to select three):
53%
Service not covered
39%
Patient not eligible
32%
Insufficient information
24%
CPT to ICD-10 coding mismatch
23%
Out of network
21%
Problems with modifiers
16%
Duplicate claim
16%
Other
8%
Untimely filing
3%
Outdated codes p. 8
Turn your practice pain points into dollars Many physician practices have found that dealing with these challenges and managing revenue in today’s evolving, value-based healthcare model is becoming overwhelming, especially as they try to focus on providing care to patients. Some practices see RCM as an “ounce of prevention” for these revenue problems, and an alternative to in-house billing. With in-house billing, practices need adequate PM software to keep up with balances and to send bills. Someone must respond to rejected and denied claims in a timely manner, as well as stay on top of regulatory changes. It can be quite time consuming. A complete RCM solution offers the ability to track patient visits from registration and scheduling and through final payment. These tasks are usually handled by a service for a percentage of collections or for a subscription fee. One advantage is that it automates numerous functions so that physicians and staff may focus on other work. Some of these tasks can include reminding patients of appointments, or performing audit functions for the practice. The RCM team handles submitted patient claims, manages denials and appeals, and collects patient payments. It can help prevent many of the problems physicians typically deal with throughout the revenue cycle.
The medical billing cycle explained Follow up with payer or patient for payment of outstanding balances Balance bill for amounts not covered or denied
Schedule patient appointment, verify insurance eligibility Check in patient. Collect insurance card and photo identification
Manage denials, rejections, and appeals
Collect copays, deductibles, and outstanding balances
Customize reports and share information
Easily access patient records
Monitor claims, key indicators, and financial reporting on dashboard Prepare and electronically transmit insurance claims and patient statements Check coding and billing for compliance and accuracy
Ensure patient receives healthcare services and prescriptions Document full clinical encounter Check that services are ICD-10, CPT, HCPC5 coded and billed
A successful RCM service will reduce the amount of time from patient service to receipt of payment. This is accomplished by integrating technology throughout the patient care experience. According to the Quest study, those that are using an outside billing company have these top 4 goals (multiple responses allowed): 51%
Reimbursement in a timely manner
Increase revenue though a reduction in denials
Alleviate staff /time savings
18% 18% 12%
Proper coding
And these respondents feel that the most compelling benefit of a medical billing service is (multiple responses allowed): 53%
Save time / staffing 45%
Keeping up with payer requirements 34% 34% 29%
Denial management Claims tracking Additional expertise not available in-house
The best RCM services provide on-demand reports and a practice dashboard to help staff know at a glance where the practice stands financially. If a practice can assess all the RCM processes, it will be able to identify practice strengths and weaknesses throughout the revenue stream, from the time the patient is seen until the claim is paid. Dashboards convert data into insight, identifying problems and allowing organizations to better manage accounts receivable. RCM ultimately connects the patient visit and treatment information with insurance coverage and billing. All of this is increasingly helpful as the industry transitions from a fee-for-service model to value-based reimbursement as the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) is implemented. Data that the EHR and RCM systems together provide on patient population can be invaluable in identifying areas for improvement. p. 10
Just what the doctor ordered To determine the best solution for your practice, consider what it will cost in time and money to keep billing in house, versus the financial cost to outsource it. Ultimately, it comes down to a potential increase in not just the revenue, but in the time it takes to receive it. Should you decide to choose an outside billing or RCM service, look for one that offers these primary features: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15.
Denial/rejection/appeals management Payment posting and monitoring Printing, mailing, and emailing patient statements Unpaid balance management Patient and insurance payment posting Fee schedules and contract maintenance Financial reporting Monthly consultations Support, training, and upgrades A billing dashboard and comprehensive reporting Compliance with HIPAA, OIG, and ICD-10 regulations Insurance payer management and fee schedule review A dedicated account manager leading a team of billing experts Scheduling, PM, and EHR software included in the RCM package Easy options for patients to pay
The main focus of your practice should be caring for your patients. Having healthy financials is critical to running a successful practice. Take care of both your patients and your business by having the best technology available supporting you continuously. For more information on RCM call 1.888.491.7900 or email us. References: 1. Brooke Murphy, “21 statistics on high-deductible health plans” Becker’s Hospital Review, May 19, 2016 2, 4. Natalie Tornese, “Cash flow and reimbursement, the top challenges physicians face in 2017” Healthcare News, January 11, 2017 3. Quest Diagnostics Survey, May 2017; 173 respondents:
53% owner/co-owner/partner of private practice
23% employed by hospital or institution
24% group practice; 4% accountable care organization
3% patient centered medical home
5. Paige Kutilek, “Spotlight statistics about medical debt you need to know” YouCaring, June 23, 2016 6. “Five key metrics for success in your practice” AAFP 7. Ibid Quest, Quest Diagnostics, Care360, Care360 EHR, any associated logos, and all associated Quest Diagnostics registered and unregistered trademarks are the property of Quest Diagnostics. All third-party marks—® and ™—are the property of their respective owners. © 2017 Quest Diagnostics Incorporated. All rights reserved.
