Effective Revenue Cycle Management in the New Healthcare Environment
Revenue is the lifeblood of any business. Any significant impact on a business’s revenue could have many outcomes, including closure. Revenue cycle management is important to any business. However, it’s even more so to healthcare practices because the source of revenue can come from different sources. Additionally, insurance companies have many rules that practices and providers must comply with. If they do not, they will not receive the revenue the practice rightfully deserves. As our founder and lead consultant, David Zetter, has always said, “Those who hold the gold, make the rules”.
The Ever-Changing Healthcare Revenue Landscape
Overall, the healthcare landscape has been changing, especially with the passing of the Affordable Care Act. And through this change, the patient is responsible for a higher percentage of the revenue, hence the term consumer-driven healthcare. Most of us are paying more for healthcare today than we did yesterday, last year, and in years prior. Because the landscape is changing, healthcare practices can no longer run their businesses “as usual”. The policies, systems, and tactics previously utilized in the revenue cycle management process are archaic. These policies and procedures were never a huge success. They also do not promise that you will receive revenue in today’s healthcare environment. Changes in healthcare require changes in billing and collections. Your practice must be flexible and willing to make changes in order to survive and produce profits in the future.
So what should those changes look like? We must discuss new policies, new thoughts, and new strategies. Additionally, discuss common-sense ideas that will assist you in ensuring payments arrive on time and where they belong. Although it is impossible to review every important point of the revenue cycle process, we will touch on a few. We’ve selected these important points based on the changing landscape and our experience in evaluating and improving revenue cycle processes.
The Importance of Patient Touch Points
We begin with the initiation of the patient-physician relationship. In our opinion, this begins when you first speak with the patient to schedule their appointment or when they arrive. This is where you inform the patient of your financial policies and their obligations as a patient in your practice. Zetter HealthCare begins its revenue cycle analysis process here. From the moment the patient-physician relationship begins, we conduct a complete practice revenue cycle system assessment. As a result, Zetter HealthCare offers a more thorough and beneficial assessment result than our competitors.
This is also the point where the training and education of your staff are imperative to ensure that they obtain all the demographic information needed for a smooth process for both the patient and the practice. It is crucial that all of this information is accurate from the get-go. Knowing where errors are made and how to resolve these issues once and for all is a top priority.
If there are errors in the future, there should be a protocol in place. Have your billing department communicate with those responsible for the errors and ensure they do not happen again. A little time and effort spent upfront will produce more efficiency down the road. At Zetter HealthCare, we provide staff education and clinical documentation improvement services that upgrade your current reimbursement system.
Developing Financial Policies
Most financial policies used today are outdated. Yet, they are still implemented without knowing how they will affect the practice’s cash flow and efficiency. Let’s discuss what these policies should look like. But before we do this, we must clarify that not all policies will be right for every provider or practice. You must decide what stance you want to take and what will work for you, your practice, and your patients.
Please remember this: you know what happens when you let the roosters rule the roost? You cannot let your patients dictate how you will run your business; otherwise, you have the potential of eventually going out of business. For this reason, Zetter HealthCare assists you with recruiting proper staff and/or a billing company with experience in your practice’s specialty. Additionally, because of our experience with several different EHRs and practice management systems, our skilled staff can recommend financial policies specifically suited to your individual practice.
A sample financial policy has been provided to see different options of how certain policies or procedures are communicated and handled.
With the increased percentage of revenue becoming the patient’s responsibility, it is time to consider a “credit card on file” policy. This policy automates charges for co-pays and patient balances after claims have been adjudicated by the insurance carrier. Rendered quality services should not go unpaid unless the patient has concerns about the treatment. Having staff or billing companies chase these payments is not efficient or acceptable. This can easily be handled inappropriately if the wrong person is responsible for this task. Even clearinghouses and insurance carriers are automating patient payments and collections. Why shouldn’t you? Bringing in revenue more efficiently and at less cost is what business is all about. So, how does a practice begin collecting revenue at the time of service or after patient responsibility is applied?
Financial policies must inform the patient that the preferred way of handling payments is to provide a PCI-compliant credit card on file process. This will require the proper merchant services equipment and a financial policy that informs your patients of this new policy.
You may implement this policy by asking patients to agree to pay a maximum each month via credit card. This agreed maximum pays the monthly co-payments and balances due. In this case, the patient requires little to no effort since it’s an automated process. The merchant services vendor will send an email to the patient signaling the completed monthly payment.
We suggest the following process for patients who do not have a credit card. Although, you may want to tweak the process depending on your state laws and how the owners of the practice prefer to deal with unpaid balances.
Patients who Opt-Out of Automated Payments
Once an insurance carrier has paid their portion of the claim, the patient receives a statement. This statement details the patient’s responsibility to complete the payment within thirty days. It also tells patients they need to complete the payment within the given timespan to avoid a run-in with collections.
At this time, the patient will incur additional expenses for collection or attorney fees and possibly court costs. Management and ownership should review each account considered for collections to determine the appropriate action. There is no legal requirement or a good rationale to send three statements to a patient. If the patient does not pay their responsibility after receiving their first statement or call to set up a payment plan (this option should be communicated on your statements), it is not the practice’s responsibility to continuously send statements. Once an account is sent to collections, the account is written off. A note is taken under the patient’s account of the balance still owed. If the patient calls for an additional appointment, collect the payment prior to scheduling the appointment.
Practices should no longer carry the responsibility of collection costs. In this scenario, the patient decides whether their account is sent to collections. Additionally, if the patient is not responsible, what will change the behavior of not paying for services? This policy has trained the patient that someone else will pay for it.
Making Changes to Financial Policies
Changing financial policies deserves a lot of attention and care. Practices must follow these policies consistently and fairly. However, it is unwise to change your financial policy on a regular basis. A good idea is to find a financial policy that is tailored to your practice. Distribute your practice’s financial policy to each patient with a required signature. Remind your patients to review the financial policy at the time of scheduling their appointment and at checkout. Additionally, post your policies on your website and review and update as the needs of the practice change.
Each patient touchpoint is your opportunity to inform the patient of a more efficient way to handle their payments. It is also a good time to set up payment plans for patients that have balances on their account. Lastly, use this touchpoint to ensure the patient is happy with the care they received. Patient satisfaction is a benchmark of continued care and the cornerstone of payment as the healthcare landscape evolves.
Every day, more people are paying bills online or have automatic debits to their bank accounts or credit cards. Healthcare practices can do the same. Automatic debits will remove the need for your reception desk to ask for payment of copays or account balances. Your staff will have more time to focus on the needs of the patient, rather than act as collection agents on behalf of the practice.
The last area we must focus on is denied claims. One of the most perplexing issues in a revenue cycle assessment is when a payor has to communicate why the claim has been denied.
In many cases, one may correct and resubmit claims properly for payment. This is what we call low hanging fruit. Alternatively, the payor has communicated a policy that does not allow the service to be submitted. Occasionally, the payor is incorrect. In that case, you may educate the payor on their own medical policies. For whatever reason, if denied claims are tracked, you can use this metric to your advantage.
Hire someone to use this metric to evaluate which claims can be paid or which practice service policies need to be altered to meet the requirements of the payor. You may use this information to gain data to help negotiate your contracts. We understand claim denials are overwhelming. At Zetter HealthCare we will be at your disposal throughout the entire process. We can assist your team in claim denial education, hiring qualified staff, and answering any questions you may have. Unique to other revenue cycle management firms, you will have direct access to our company’s founder and our experienced staff for assistance in any step of the revenue cycle.
Focusing on denied claims may result in fewer denials down the road. However, policies and procedures must be enacted to prevent these types of communications from payors in the future.
If your practice needs help creating an effective revenue cycle management system, call Zetter HealthCare at (717) 691-6768.
Revenue Cycle Management Assessment
Today, a practice’s financial success requires different systems, processes, policies, and procedures than those in the past. Using old policies and procedures while maintaining staff that is not up to date with the healthcare industry is a recipe for disaster. With today’s consumer-driven healthcare, more of your revenue is collected from the patient than ever before. Chasing revenue is an old process that requires sending patient statements, calling them at home, and utilizing collection agencies that take a higher percentage of your money. This has never truly worked, and it certainly does not work with consumer-driven healthcare. Healthcare practices today are required to take a more proactive view of the revenue cycle, with new policies and procedures, and an educated and trained staff that is proactive in the revenue cycle process.
Your practice’s success relies largely on the effective management of your revenue cycle. You must understand the revenue cycle to evaluate it. Zetter HealthCare can give you the most comprehensive review of your current billing processes, policies, and procedures, and can help you discover where your practice is missing revenue and growth opportunities. Our staff can directly access your practice’s financial systems remotely and provide a full evaluation efficiently. We will even be there to assist your practice with cleanup after the assessment and help to make any changes we suggest. Additionally, we answer any questions you may have regarding your assessment quickly and directly.
For more information on Zetter HealthCare’s Revenue Cycle Best Practices, click here.
Zetter HealthCare can provide you and your practice with a thorough review of your current management cycle. We can help you evaluate your systems, policies, and procedures to ensure your practice is efficient and brings in more revenue. For more information contact us at (717) 691-6768.
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