An efficient revenue cycle management system (RCM) can wreak havoc on your expectations for reimbursement. This pain will become especially acute with ICD-10 coming in with expectations of delayed and rejected payments (Be advised at this point the “Rejections grace period” applies to medicare only).Denied claims are one of the major culprits when it comes to missed revenues. Revenue cycle management systems belong to the backend of any health professionals’ organization, but they are as vital to success as hands-on care at the front end of the office.
As a refresher, revenue cycle management is a popular component of patient management and reimbursement employed by a number of health care facilities and medical billing assistance. But how do healthcare physician and facilities benefit from such solutions? Providing checkpoints for every aspect of the claims process, generating improved payment and revenue methodologies is just the tip of the iceberg.
How much missed revenue due to denied claims?
An article in Healthcare IT News stated that 10% to 20% of claims that are denied can contribute to approximately 90% of missed revenue opportunities. However, a company experienced with RCM is able to maintain quality procedures and measures that keep pace with today's ever-changing business needs and reimbursement models.
According to the Northern California Spring Conference, California health insurers rejected approximately 1 in every 5 medical claims, approximating $45.7 million in missed revenue between 2002 and 2009 alone (and that doesn't include claims denied by Blue Shield of California).
Even more alarming are their statistics that a managed care hospital with a net revenue of $50 million may have - at any given time - $5 to $10 million in an open state of denial.
The most common reasons for lost revenues?
- Missing codes or charges
- Inaccurate or incomplete billing processes
- Underpayments that have gone undetected (due to pricing inaccuracies or misinterpretation)
Computer-based information technologies and solutions drastically reduce the time it takes to address claims denials and promote faster as well as efficient and accurate claims processing.
RCM Systems cut down errors leading to missed revenue
Dealing with a denial not only delays payment, but takes up a huge amount of time in communication, faxing, phone calls, and endless back-and-forth that can delay payment and/or reimbursement for weeks and sometimes even months. Humans misplace paperwork, lose track of who's supposed to be responsible for which tasks in the workflow cycle.
Coding errors continue to be a major culprit in slowing down reimbursement, especially as healthcare professionals prepare for the transition from ICD-9 to ICD-10 procedure coding support. Updates provided by the Center for Medicare & Medicaid Services in for coding procedures must be reviewed in a timely manner to avoid delays.
The majority of additional requests for information from payers and/or a denials are due to a lack of authorization, duplicate claims, and limitations on third-party liability. Requests for information through numerous departments in different organizations can cause excessive delays in payment processing.
Anyone in the healthcare business knows that a denial only lengthens the amount of time between provision of services and accounts receivable. Therefore, it's important not only to track denials, but to analyze what causes them in the first place, and then make changes that address those causes.
What can RCM systems do for you? Let us count the ways:
- Improve healthcare delivery
- Provide solutions regarding confirmation of eligibility
- Instant access to account balances
- Time-saving appointment scheduling
- Cost transparency
Promoting improvement in healthcare delivery systems, whether you're a single practitioner or a facility, is vital in today's fast-paced and ever changing healthcare reimbursement method system. Attaining updates and reports regarding key performance indicators can weed out insufficiencies and improve ability to measure services, reduce paperwork, improve communication between providers and patients, as well as reducing administrative costs.
Turning to companies like CureMD, NueMD or drchrono to provide expertise when it comes to revenue cycle management is just good business. An efficient and effective reimbursement cycle understands the importance of avoiding missed revenues due to denied claims. Claims denials are the bane of medical professionals. Management of the revenue cycle is key to success in any healthcare environment, but it’s more than just billing and collection. It's gathering, validating, and analyzing data.
Utilizing RCM technology and systems accelerates the billing process by providing instant authorization regarding insurance, reducing coding errors, and reducing claims denials. Developments in healthcare industry Revenue Cycle Management software solutions have become incredibly competitive, utilized in a variety of for-profit as well as a nonprofit delivery health care systems. Today's consumer driven health care needs demand equally accurate processes to not only improve and facilitate customer satisfaction, but ensure that health care providers are being reimbursed in a timely manner.
Looking for the best in RCM Solutions
The top RCM technologies out there today should be customizable to check-in processes, patient records and billing, provide up-to-date information regarding pre-service and post-service alternatives and delivery, preventive services, and other benefits that promote customer service, transparency, and most importantly, prompt and accurate payments.
This requires a number of different processes all working together to make sure that the provider or the facility is adequately reimbursed for provided services. Chronic delays in payment and denied claims can lead to serious revenue droughts that have a detrimental impact on a provider or facility’s ability to survive. As mentioned, management of revenue cycles involves a variety of functions in addition to billing, and includes:
- Patient admissions services as well as patient access management
- Case management
- Accurate charge captures
Improving and maintaining an effective revenue cycle management system means choosing technologies that provide the ability to analyze a variety of revenue cycle indicators including:
- Identifying "unclean" claims
- Ongoing percentage analysis of claims returned
- Percentage of claim denials
- Analysis of the percentage of accounts that are missing documentation and what types of documentation are most overlooked
Compliance and inclusion of accurate documentation is essential and not only ensuring compliance with up-to-date government guidelines, but in preventing healthcare fraud.
Choosing RCM software solutions
When choosing revenue cycle management system software solutions, make a decision based on the size of your business as well as deployment methodologies (mobile, online, cloud), and the type of platform desired. Take into consideration functionality and services provided.
At the minimum, revenue cycle management software systems should be able to manage customer data, provide interactive tracking, automated workflow and tools that provide ongoing tracking of productivity and performance as well as activities logged into the system, and most importantly, revenue generated. RCM solutions will increase productivity and efficiency and prevent billable events from falling through the cracks.
Revenue cycle management software solutions are vital in today's healthcare atmosphere. Underestimating the importance of revenue cycle management systems and solutions can, and eventually will, undermine profitability.
About the Author
Alex Tate is a digital marketing specialist, content strategist, and a health IT Consultant at CureMD who provides perceptive, engaging and informative content on industry wide topics including EHR, EMR, practice management and compliance.