Many practices find themselves in a complex relationship with theirrevenue collection processes. While often rewarding for offering excellent care to patients, these processes can also become a source of strain and headaches.
In 2018 alone, despite a staggering$3 trillionin total claims submitted by healthcare practices in the US, more than $260 billion were denied. To put this into perspective, thats nearly $5 million in denials per provider, on average. Fast forward to 2022, providers found themselves spending nearly$20 billionpursuing delays and denials across all payer types. Only half of this sum was eventually paid out, meaning that over $10 billion was wasted in futile battles over claims that should have been resolved upon first submission.
Exacerbating this challenge is the prevalent understaffing across practices, hindering teams ability to thoroughly review denied claims. Alarmingly, it has been shown that providers often neglect to take action on a significant portion of denials, with up to65%of denied claims remaining unaddressed. The repercussions of these inefficiencies can be severe. In addition to the evident financial strain, delayed payments disrupt care efficiency, triggering a ripple effect that undermines profitability.
Denials also incur indirect expenses. According to a study by the Journal of the American Medical Association, providers typically undergo an average of three rounds of reviews with insurers, each lasting between45 and 60 daysfor each claim appeal. Consequently, these delays cause almost 14% of all health system claims to become overdue for payment, leading providers to sometimes wait up to six months after delivering services before recovering costs.
Ways to Reduce Revenue Leakage in Medical Billing
The billing process, by nature, demands meticulous attention to detail. Overlooked or incorrectly processed steps in the revenue cycle can lead to serious financial losses, worsening delays in accounts receivable and undermining overall revenue streams. This is why it is so important that practices identify and seal the gaps in their revenue cycle that are causing leaks, ensuring that every dollar owed is accounted for. This means not only addressing denials head-on but also reducing the collective administrative spending on pursuing claims delays and denials.
In the following section, we discuss strategies that can help practices mitigate revenue losses:
Look For Issues Upstream in Your Cycle
Recognizing and addressing issues early in the healthcare billing process is paramount for optimising efficiency and ensuring financial health. Despite this critical importance, many practices miss out on crucial opportunities to mitigate denial risks throughout the entire revenue cycle. While coding errors can certainly complicate claims processing, the majority of challenges originate from earlier stages.
From the very first patient interaction, there are many hurdles that can prevent the accurate collection of demographic data. Mistakes during registration, inaccuracies in address details, or insufficient prior authorizations often end up getting claims rejected by insurers. Within practices, the presence ofdisjointed systems, processes and workflows breed inefficiency, causing delays in dealing with denials and hiking collection costs. Plus, when you throw in the mix complex patient accounting systems, orelectronic health recordupdates, mergers, or alterations, the result is a backlog of accounts receivables(AR)and a growing stack of denials caused by incompatible IT systems.
Switch to An All-in-one Practice Management Platform
To tackle the prevalent issue of claim denials stemming from insufficient documentation, comprehensive record-keeping is essential.
Practices can ensure accurate coding and billing by consolidating various aspects of practice management, such as scheduling, billing, electronic health records (EHR), and patient communication, into a single, unified platform. This integration joins up operations and reduces errors and omissions that can lead to incomplete or inaccurate submissions.
Furthermore, adopting a centralised billing system is recommended to mitigate challenges at the front-end. This system not only eliminates paperwork but also simplifies collaboration among departments, enhancing efficiency and accuracy in billing processes. Physicians and administrative staff should always receive proper training to navigate the continuous evolution of facility, insurance and professional coding systems and billing regulations effectively.
Ideally, this unified platform should facilitate easy capture and retrieval of patient information.
Submit Claims Promptly And Address Denials As Soon As They Crop Up
To maximise efficiency and minimise revenue loss, claims should ideally be submitted within 24 hours of the patient visit.
Preparation is paramount; your team should gather all necessary details beforehand, including demographics, insurance information, coverage details, patient responsibility, referral numbers and prior authorizations if applicable. Once your coding team provides procedure codes and modifiers, claims can be swiftly submitted, offering numerous benefits such as prompt insurance responses, opportunities to correct rejected claims and reduced accounts receivable (AR) days.
Encouragingly, research indicates that a significant portion of denialsapproximately90%are preventable, offering a promising opportunity for practices to mitigate revenue loss. Furthermore, among these preventable denials, around two-thirds can be effectively appealed, presenting a pathway to recover lost revenue. Nonetheless, its crucial to acknowledge that the expenses associated with appeals are typically substantial, and the process itself has become increasingly intricate for providers. With a median success rate of less than 50%, avoiding preventable errors, such as inaccuracies in patient and insurance details, is important to minimise the likelihood of denials and optimise revenue recovery efforts.
Using automated fee scheduling, electronic claims submission whenever possible, credit card processing, and payment posting systems can significantly expedite claim submission and ensure data accuracy.
Track and Analyse your RCM Data
Monitoring accounts receivable is vital in healthcare revenue management, enabling the identification of trends in late payments and strategies to minimise revenue loss. Regular examination of open claims, unpaid invoices, and other AR data provides valuable insights into financial health.
Additionally, tracking key performance indicators (KPIs) optimises revenue cycle management. Analysing critical metrics like denial rates and ageing of accounts identifies improvement areas. Leveraging advanced business analytics delves deep into problematic reason codes, aligning metrics with organisational goals.
Transforming raw data into actionable insights enhances revenue cycle management by uncovering hidden leaks and driving operational efficiency. Despite their importance, accurately identifying and reporting denials poses challenges for many practices.
Implementing advanced denial management processes and accurate reporting optimise revenue recovery efforts, mitigating revenue leakage and improving financial performance.
At Meddbase, we specialise in enhancing revenue collection processes by optimising the middle revenue cycle, with a focus on improving clinical documentation and patient information capture. Our proven solutions have empowered numerous practices to join up their operations, increase revenue, and deliver better patient care.
To find out more about how we have helped practices revamp their RCM, read this insightful articlehere.