Consequently, it can be challenging to fully understand your practice's revenue performance relative to its potential. Inefficiencies and missed opportunities can go unnoticed for years. Even if they're not precipitating a steep decline of your practice's revenue health, they can eat into your earnings and stunt organizational growth and stability.
This raises the question: At what point is an outside perspective on your practice's revenue performance necessary? There are many indicators of insufficient RCM workflows – some more subtle than others. For guidance purposes, we've identified four of the most telling signs that your current RCM processes might be in trouble.
This is by far the easiest-to-miss sign of RCM problems. To paraphrase an old saying, “You can’t see what you’re not looking for.” Effective revenue cycle management requires physicians or practice administrators to actively track the key processes and metrics that impact their medical billing and coding performance.
Simply put, when you have greater visibility into your end-to-end RCM lifecycle, you can begin to identify bottlenecks, and figure out how to address them. The benefit of a third-party looking in from the outside is that you’re getting an impartial, unbiased, and qualified view of what's happening on the billing and management side of your organization. This is not to be confused with simply selecting certain tasks for outsourcing, but rather, seeking an expert, consultative opinion that shows you where your practice is inefficient, or where it's missing out on deserved earnings.
If your goal is to start tracking RCM key performance indicators (KPI) internally, then poor insurer and patient-payer collection rates are tell-tale signs that your practice's RCM lifecycle is not achieving its full potential.
Health insurance companies are the largest payers in the U.S. healthcare system. The purpose of tracking insurer collection rates is to estimate how much collectible revenue from insurers is reaching your business. Of course, you want your rates to be as high as possible, preferably in the mid-to-high 90s. However, there can be many causes of troubled collection rates, including:
There are different variations of patient collection rates, but the basic idea is the same as insurer collection rates – How much collectable patient revenue are you actually bringing in? And, how quickly are you doing that? This an especially crucial metric today, due to the exploding numbers of high deductible health plans. Ideally, practices will collect the entirety of a patient's payment obligation at the point of service. Trouble escalates when patients aren’t aware of what they’ll owe or don’t understand what (or when) their coverage covers, in the first place. And, frequently, it’s up to your staff to proactively and efficiently understand and answer their questions and provide convenient mechanisms for them to meet their obligations. When these things aren’t in place, your point-of-service collections are almost sure to suffer.
There are a number of ways to calculate net days to A/R, but they all essentially tell you the same story: How long it takes you to collect the amount owed to your practice. Ideally, your practice will be reimbursed within 30 days or less or a patient encounter. An average of 50 days or more across all aging buckets is cause for concern.
Some of the most common factors that can negatively impact A/R net days include:
Pinpointing the exact cause of a high tally for total days in A/R may require careful scrutiny of your existing RCM workflows; however, it's entirely worth it if means improving your practice's bottom-line.
The most visible alternatives – local billing companies and high-volume, national vendors – frequently don’t / won’t solve a practice's deeply-rooted RCM problems, either. This is because many third-party billing/coding services offer low, surface rates that are designed to only address your low-hanging fruit or "quick wins" without necessarily doing anything to diagnose and fix problems at their roots. Worse yet, the initial rates offered by many high-volume services camouflage other add-on fees that oftentimes turn “an investment” in their services into a black hole.
Specialty RCM providers are available who can address your coding/billing issues in a relationship that functions more as an extension of your staff and less as a one-sided service. These providers work to establish true partnerships and holistically enhance your practice's medical billing and coding processes. An RCM partner supports your practice with highly-qualified, external perspectives that allow you to diagnose issues and address them, once and for all. Such a partner provides additional functions that can support your existing staff or outsource select services, reduce your overhead and maximize your practice’s true revenue potential.
Contact AllMeds today and learn how a proper RCM partnership can revitalize your bottom-line.
Certified medical billing and coding experts are becoming increasing hard to attract and retain internally. Professionals with certified credentials are in high demand, earning, on average, $52,037 annually, according to AAPC. The costs of staffing an entire team of such experts to oversee your RCM lifecycle add up quickly, and many practices find that the costs of certification, continuing education and retention are beyond their means.