How to Improve Revenue Cycle Management

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Revenue cycle management is essential to operating a successful medical practice. For one, it directly affects your bottom line. More importantly, revenue cycle management, or RCM, directly affects the patient and their experience.

To make the most out of revenue cycle management and keep up with healthcare industry changes and trends, you should fully understand what revenue cycle management is and look for ways to improve your RCM. So, how can an organization improve its revenue cycle management?

With changes in technology and patient preference, there are many ways a healthcare provider can improve their RCM strategy. By doing this, you'll improve your financial health, as well as the quality of your patient care. Let's dive in.

Why is Revenue Cycle Management Important?

The goal of revenue cycle management is to increase provider revenue. This makes RCM an important strategy for healthcare organizations to utilize, considering it allows them to keep their doors open to treat more patients. However, providers are not the only ones who reap the benefits of revenue cycle management. With increased revenue, providers can invest more money and time into patient treatment.

In addition to increasing revenue, revenue cycle management also decreases the likelihood of insurance-denied claims by ensuring that patient information and coding are accurate on submitted claims. When claims aren't denied, providers don't have to spend resources investigating and appealing the denial, searching for correct codes, and correcting mistakes. Thanks to this, administrative staff members can dedicate more time to the patient.

The revenue cycle consists of many steps, all of which are crucial to ensuring prompt provider reimbursement. Because they require accuracy, tasks like account creation, claims processing, pre-registration, insurance eligibility verification, and medical coding take more time to complete.

But in order to receive reimbursement quickly, these tasks also require speed. That's why you'll need to make adjustments and advancements where you can. One helpful advancement is an automated workflow system.

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Implementing Workflow Automation

Workflow automation systems are an excellent tool for revenue cycle management. They can be used to:

Focus on front-end tasks to move claims along quickly
Migrate patient files and create non-patient files when necessary
Proactively verify and correct patient information
Automatically add coded comments
Confirm insurance coverage prior to the patient's visit
Update outdated or missing policies before an appointment
Implement electronic patient intake
Automate prior authorization and eligibility verification

Implementing workflow automation is one of the most significant improvements that healthcare organizations can make to their revenue cycle management. Why? Because front-end tasks such as coding and billing processes or data entry require accuracy, errors can easily occur in the first stages of revenue cycle management, resulting in a denied claim. Most errors are due to things like inaccurate or missing patient information and coding. In fact, about 90% of claim denials are completely preventable.1

By ensuring patient and claim information is accurate, workflow automation systems minimize the risk of claim denials. This benefits the provider in two ways:

Increased revenue

When claims are denied, providers are not reimbursed for the services they provided. Since providers perform services before submitting claims, they end up losing that money if a claim is denied. Patient service revenue is one of the most important parts of your revenue cycle so paying special attention to your claims submission process can be a valuable investment.

Plus, to investigate and appeal a claim denial costs providers about $15,000.2 So, even if they appeal the denial, re-submit the claim, and get approved, you've already lost revenue. That's why effective prevention of claim denials can result in more than $5 million3 in additional revenue for the average hospital.

Increased time

Investigating and appealing a claim denial takes time. It pulls administrative staff away from their regular duties. By avoiding claim denials in the first place, administrative staff has more time to dedicate to patient care. Aside from saving money by avoiding denied claims, implementing automated workflow systems for front-end tasks is actually more cost-effective than manually performing these tasks.

Manually checking prior authorizations and eligibility, for instance, costs providers an average of $7.50 per transaction.4 However, electronic prior authorizations only cost providers $1.89 per transaction. While providers may spend money upfront to invest in these automated systems, the systems themselves will more than make up for the cost.

Investing in Staff

Technology is not the only investment that a healthcare facility can make. It's just as important to invest in administrative staff. Often, front-end tasks are delegated to certain administrative staff, while back-end tasks, such as revenue collection, are delegated to other departments.

By training staff in all areas of RCM through employee education programs, they can have a better understanding of the full revenue cycle, not merely their specific part of it. This makes it easier for administrative staff to understand how they can work together to make the transition from front-end tasks to back-end tasks seamless and efficient.

Understanding Patient Preferences

Patients are the most important factor to consider when running a medical practice. After all, providers can't experience increased revenue if they don't have any patients. But quality patient care is more than just providing treatment. It's providing a satisfactory experience where patients feel heard, acknowledged, and guided through what may be a very stressful time in their lives. For many patients, healthcare and insurance can be intimidating and confusing. Because of this, you should aim to make the patient experience as stress-free as possible.

One of the best ways to increase patient satisfaction is by streamlining patient tasks. Automated workflows can make it easier for new patients to:

Schedule appointments
Receive appointment and payment reminders through emails and texts
Pay medical bills online
Set up automatic payments
Access clinical and financial information through online portals

Patients actually prefer these automated systems. Not only do these systems allow patients to feel more involved in their healthcare, but they're also straightforward. With automated systems in place, there's no more confusing and time-consuming back and forth between patients and administrative staff.

By providing a more satisfactory patient experience, you can guarantee those patients will return the next time they need medical care, and that means higher profitability. Put simply, serving the patient serves everyone.

Collecting Payments Upfront

Aside from patient preference, another reason to set up an automated workflow system is to ensure payments are made on time. Late and underpaid patient financial responsibility slows healthcare revenue collection cycles. With an automated workflow system, providers can give patients financial estimates upfront so that the patient has a better understanding of their financial responsibility.

Another RCM improvement that providers can make is to require patient payment upfront. Point-of-service or pre-payment options can be implemented with automated systems so that patients can easily make payments before services are rendered. These systems also allow for credit-card-on-file services to help boost payment collections and ensure timely payments. By enforcing these practices, providers can be paid for their services promptly, avoiding late or lost patient payments altogether.

Tracking Performance

A data-driven revenue cycle uses certain metrics to help providers better understand their financial health and revenue cycle performance. By tracking their financial performance, you can get a clear picture of the areas in your healthcare organization where improvements can be made. Some key indicators to keep track of include:

Net days in accounts receivable
Claim denial rate
Percentage of collections
Cost to collect

In fact, an RCM expert can utilize data analytics to help you make better decisions about your revenue cycle, highlight areas for growth, and set you up for revenue cycle management success.

Outsourcing RCM

Providers can also improve their RCM by outsourcing it to a third-party company. By hiring an experienced and knowledgeable company to manage your revenue cycle, you can guarantee your revenue cycle's success without having to commit excess time to it. You can feel confident that administrative tasks are completed accurately and in a timely manner.

Plus, by not managing the revenue cycle yourself, you have more time to devote to quality patient care. An increase in prompt, accurate provider reimbursement while boosting patient focus is a win for patients, providers, and administrative staff alike.

Improving RCM for Patients and Providers

The healthcare industry is constantly changing to keep up with technology and patient preferences. There are always new advancements being implemented that work to benefit the provider, as well as the patient. That's why healthcare providers must never stop asking how to improve revenue cycle management.

With a company like PayrHealth, you can ensure that your revenue cycle stays efficient by placing strict payment guidelines into your payor contracts. We guarantee providers will get the most out of their revenue cycle so that they can go back to focusing on what matters most providing quality patient care.

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