Top 5 provider mistakes in revenue cycle
In a typical primary care or other office-based practice, prompt payment from insurers and patients is essential to smooth operations. When providers mismanage the revenue cycle, the financial impact may seem relatively small on an individual claim, but when multiplied by hundreds of visits a week, the effect on the bottom line is the equivalent of death by a thousand paper cuts -- slow, agonizing and certain. The good news is there is a remedy.
Let's begin with some common revenue cycle management mistakes providers make.
1. Not staying current with payer requirements
Just reading your insurer's newsletter isn't enough. In many instances -- such as a change in structure of provider identification numbers -- you can't just resubmit the claim. Your system must be updated first to support the payer's modification, which requires administrative time and further delays payment.
Bottom-line impact: sluggish cash flow, high claim reject rates and administrative expense.
Solution: Due to the thousands of payers and even more claims policies, partnering with a revenue cycle management vendor can greatly simplify your claims filing processes. These partners must always maintain current policies and you can take advantage of their expertise.
2. Failure to monitor the entire claims process
If you can't manage the claims process at every point in its lifecycle, you can't identify where it went astray and resolve the issue. Without automated alerts as to why a payer is routinely denying claims for a given procedure or code, your staff will spend countless hours researching the issue.
Bottom line: lagging accounts receivable and high administrative costs. According to a recent study by James Kahn, MD, from the University of California, "Billing and Insurance-Related Administrative Costs: Burden to Health Care Providers, practices typically spend 8 to 14 percent of overall revenue on clerical follow-up on rejected claims.
Solution: Claims are complicated and ever-evolving regulations ensure mistakes are easy to make, yet hard to track. To help lighten -- or even eliminate -- this burden, implement a business process for timely, thorough follow-up. Take the time to research affordable tools that can help to generate proactive alerts. There are plenty of options available, so make sure to identify the right system for your organization. With the right tools, the ROI will happen quickly.
3. Not resubmitting rejected claims
When claims are rejected due to coding errors, many providers are reluctant to resubmit to certain payers because they lack access to data that can support the challenge.
Bottom line: lost revenue.