5 ways to improve your revenue cycle and limit denials
Hospitals are rethinking their revenue cycle management.
From patient access to proper reimbursement and accuracy of clinical documentation and coding, hospitals understand that nothing represented on the UB-04 claim form is generated in the business office. They know it all emanates along the continuum prior to bill creation.
The impetus for change is often an increase in bad debt or accounts receivable days. CEOs are focused on trying to capture every dollar for services rendered. However, their challenge is to ensure there is positive revenue and quality outcomes with charge integrity and health information management activities.
Reimbursement challenges threaten the cash flow of many healthcare organizations as they deal with denials. Payers are increasingly using prepayment review vendors who will challenge single-line items to prevent paying.
So, how can an organization improve its revenue cycle management and help prevent denials?
We’ve put together a list of five key areas to address:
1. Know your numbers: How many denials do you have?
Denials erode providers’ bottom lines, impede timely reimbursement, and waste time and money to appeal. Recent data reveals that national denial rates are climbing, with 86% of denials being potentially avoidable and 26% being not recoverable.
Often, organizations can’t quantify their denials. But knowing exactly how many denials you have makes it easier to choose what areas to target and prioritize.
It’s also important to track your denials by reason and root cause to see where correction might be needed. Without tracking these denials, it’s difficult to know where to begin when addressing potential issues.
Denial prevention
When working denials and denial prevention, attention to detail is key.
Inattention with medical billing and coding can cause clerical errors with:
- Patient data (wrong name, date of birth, insurance company)
- Provider details (incorrect address, name, contact information)
- Insurance information (wrong policy number, address)
- Confusing codes (too few or too many digits, wrong modifiers, place of service discrepancies)
- Mismatched codes (entering ICD-10 codes with CPT or vice versa)
- Omitting procedural codes
- Duplicate billing (submitting claims without checking to see if the service had already been paid or reported)
Your organization also needs to understand your deadlines.
Each claim submitted has a filing deadline and an appeal deadline. 180 days and 365 days are the two most common time frames, with a 34% chance that an insurance company has a deadline of 180 days and a 46% chance that the deadline is 365 days.
2. Put together a revenue cycle committee
Creating a revenue cycle committee can help your organization better think about your revenue cycle as a continuum.
The committee’s main function should be to identify the places along that continuum where things are going wrong and then determine how to correct course. Ultimately, you want to become a learning organization that can identify and solve gaps in your revenue cycle and continually improve.
For example, by drilling down into the processes along the continuum, your revenue cycle committee may find that patient eligibility is being checked the day of service instead of during scheduling, and that’s causing a lot of denials downstream. You can then enact a change in process to check eligibility during scheduling.
3. Perform a revenue cycle claims tracing analysis
Getting a midcycle view of your revenue cycle can help mitigate denials, which is why your organization should consider a revenue cycle claims tracing analysis.
By using registration information, claims data, clinical documentation, EOB/remittance advice information and patient account data, you can trace from the initial patient contact through complete reconciliation of the patient’s account. You can then gain information about lag times, missed charges/codes, documentation issues or deficiencies, revenue code/CPT/HCPCS code mismatch, chargemaster or pricing errors, reimbursement issues, and efficiency of the billing and collections process.
When performing revenue cycle claims tracing analyses, its typical to discover that:
- Clinical documentation was generic or copy-pasted, and medical necessity for the service was unclear.
- Charges were missed, including for high-cost items.
- Diagnosis coding did not accurately portray the documented severity of the problem.
- Unpaid claims were simply being refiled monthly.
- Reimbursement was 100% of the fee for common CPT codes, suggesting lower-than-typical fees.
Identifying issues such as these can help your organization make valuable changes.
4. Streamline point of service (POS) collection
Making those crucial front-end changes can help mitigate denials and rework on the backend. Things like checking eligibility during scheduling, identifying the right payer and entering the correct insurance information can all help reduce rework. And changing and streamlining processes — and implementing training on the new processes — can help reduce mistakes made.
But it’s also important to streamline your POS collection. Getting copays prior to the service being delivered or collecting the payment before the patient leaves can do a lot to help improve your revenue cycle.
5. Set goals and monitor KPIs
One vital question to ask during a revenue cycle assessment is whether billers, collectors, cash posters and other back-office personnel have productivity standards.
Employees who have set standards are more motivated to achieve those standards. And it also helps for them to know how much revenue they are expected to bring in.
Without set expectations, you can have billers at wildly different levels of productivity. One biller may be dropping 200 claims a day, while the another is dropping 30.
Another benefit to setting standards is that it helps keep your financials up to date. If your cash posters are a week behind in posting, you can’t close your month-end, and you can’t get financial data to the people who rely on it to make business decisions.
Creating standards and tracking progress helps you make decisions on whether you’re properly staffed and whether processes need to be changed or streamlined to help your cash posters stay up to date. And knowing your numbers each day makes it easier to identify potential issues before they become problems.
How Wipfli can help
Whether you could benefit from advice on putting together a revenue cycle committee, having an experienced third-party perform a revenue cycle claims tracing analysis, or implementing revenue cycle best practices, Wipfli can help. Contact us to learn more about how we can help you improve your financial processes.
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