When a revenue management cycle is properly optimized, it can make any medical practice a successful one. However, the lack of proper RCM strategies can only lead to chaos. When a revenue cycle management (RCM) has effectively streamlined the process of medical billing along with the collection of revenue then the challenges that can come as a result of coding and billing gets eliminated.
When a hospital promises its patients to deliver the best possible treatment to them, they often forget about putting enough stress on the financial aspect of the organization. Without proper revenue management, a hospital will not be able to function properly. Therefore as important as it is for hospitals to keep their promises of delivering excellent healthcare, they also need to put proper focus on their financial health.
Problems Faced By Revenue Cycle Management
There are some common problems that often obstruct the smooth running of the revenue cycle management.
- Incorrect use of medical codes can lead to a payment denial from the insurance payers.
- Delay in handling all of the important insurance payment denials can lead lead to a prolonged time between getting paid for the services rendered and taking proper care of the patient.
- Administrative errors can occur right from the time of the registration of the patient thereby leading to denials that are non-clinical in nature from the insurance company.
- Not using digitalization in a proper manner can lead to a damaged communication link between the patient and the provider. It also leads to a lack of time management when it comes to insurance payments.
All of the above challenges pose the same threat to the majority of health organizations, that is, they lose out on revenue. However, the challenges can be conquered by using some of the most successful troubleshooting procedures.
Solutions To Tackle the Problems Faced by Revenue Cycle Management
The problems that are faced consistently can result in a loss of revenue for many health organizations, therefore to tackle that it is crucial to follow some of the best solutions to get an improved result overall.
1. Get the latest technology
Getting the latest technology for your organization so that the administrative team can easily have all the claims rightfully coded and meet the requirements by the insurance payer is crucial. This can lead to the successful submission of the claims without any unnecessary delays. Unpaid claims take time to be investigated, corrected and then get submitted.
One of the revenue cycle management best practices (RCM) is to make sure your organization has all of the automated software systems that can help in the streamlining of medical coding, eligibility, billing and prior authorizations. Latest technology such as RCM software that is automated will help the healthcare revenue cycle management team to cut down on the time of rechecking unpaid claims.
2. The patient is the centre of the entire RCM process
If your administrative staff has control over each of their action then it can help in building a positive relationship and also improve the satisfaction level of the patients.
The staff should be able to provide both written and verbal explanations to the patient about the payment options, financial responsibility and the expectation they can have on their next visit. Many patients tend to find the entire financial process to be rather intimidating and confusing.
3. Automating eligibility and proper authorizations
One of the most crucial steps in medical practice revenue is to ensure that the insurance coverage of the patients is always verified. Many of the insurance companies are now focusing on the creation of stricter requirements for coverage eligibility and prior authorization. This sudden surge in demand has shown a slowdown of the reimbursement rate thereby leading to more claim denials. Automating eligibility and prior authorizations help in the optimization of the clinical process and also speeding up the entire revenue cycle.
What Is the Best Method to Evaluate Revenue Cycle Management Performance?
The key performance indicators (KPIs) help hospitals understand how good their financial health is. These are the KPIs that can be used in order to track the revenue growth your medical organization has.
1. Days In AR (Accounts Receivable)
This is representative of the average time it can take for a claim to be paid. Medical practices should have a definite goal of having to reach 33 days in accounts receivable. Your financial health will remain sane if the metric stays well under 45 days at least. It is also important to be mindful of the deadlines that the insurance company gives to file the claims, the majority of the time it is within a period of 90 days starting from the day of the service has been rendered to the patient.
2. CCR (Clean Claims Ratio)
The first-pass ratio or the CCR refers to the percentage of clean claims that get paid right when it’s submitted for the first time. A clean claim is one that has never been denied, has no errors and has never been filed for more than once. If your medical practice’s CCR is between 90 and 95 per cent it shows that the RCM strategy your organization has been following is successful.
3. Bad debt rate
In order to calculate this key performance indicator, divide the total monetary amount that has been written off due to the allowed charges.
4. Denial rate
Outsourcing medical billing ensures that your medical practice has a low claim denial rate and a higher CCR. Dividing the total number of denied claims with the number billed will give you the denial rates.
5. Net collection ratio
This total percentage of the total collected amount is reimbursed out of the total amount that is allowed. The metric is representative of the RCM’s efficiency and indicates the collection’s success.
6. Gross collection rate
Your practice’s total reimbursement that has been received out of the total amount that has been charged will help you determine your medical practice’s gross collection rate.
Therefore, to meet all these challenges it is crucial to partner up with the best medical coding and billing company, and this is where you can find the services offered by Synergy HCLS really helpful.