Did you know that according to the financial benchmarking of the American Academy of Family Physicians, the number of overall days spent in accounts receivable should ideally be 30 to 40? Yet, most clinics suffering from low collection rates record about half of their claims above the 90-day mark. Improving the revenue cycle in medical billing is the goal of many, but attained by only a few who pay attention to the details. If you are struggling with a low collection rate, you should probably break down your existing system into specific steps and identify the flaws holding your payments back.
This article will take you through a step-by-step guide on how to improve your clinic’s financial performance. Read on to know the factors that you should consider.
1.Evaluate your Revenue Drivers:
- The revenue cycle is composed of several steps and often requires specialists for specific sectors.
- But another part of improving the revenue cycle in medical billing is by understanding the stakeholders who drive the payments and collections.
- The internal revenue drivers are composed of the number of providers in the organization, the patient volume that the organization caters to, and the fees charged for each of the medical services rendered.
- The internal revenue drivers are called such because the provider organization has reasonable control over these factors.
- The external revenue drivers are Government and private insurance rates, claim management policy of the insurance panels, the collections from the insurance claims, and pending amounts from the patients.
- In the first step, divide your specific factors into these two parts and compare them. You need to understand which of the factors you can change considerably.
- Dividing them into short-term and long-term goals can help you improve your revenue cycle steadily without putting too much pressure on your existing system.
2.Charge v/s Collection:
- The billing charge for the medical services at your clinic falls under internal factors. But it is practical to say that the costs and the collections are never relatively equal.
- After carefully going through the details of the services and codes, the insurance panel pays a part of the claimed bill.
- The rest of the payment should ideally come from the patient, known as the out-of-pocket expenditure, and includes the co-payments and deductibles.
- Most clinics have a hard time collecting these payments due to several disputes between the insurance coverage.
- The other pressing issue is that the patient out-of-pocket expenditures continue to rise at about 23%, making it difficult for the patients to arrange for the payments.
- Clinics in recent years are gradually shifting to improvised payment methods like text-to-pay or installments to make it easier for the patients to pay and therefore improve the collection rate for the clinics in the long run.
3.Claim Management:
- Managing correct claims can make a massive difference to the clinic’s revenue cycle in medical billing.
- There are mainly two kinds of insurance payers that the clinics have to deal with- Government and private.
- Government plans like the ones offered by the Centers for Medicare and Medicaid Services cover a large part of the patient volume.
- The guidelines and any other updates on the claim management system of the Government insurances are readily available on their web portals and somewhat have a standard method.
- However, private insurance panels can be tricky to handle. Each of the payer panels has different kinds of rules and regulations for the claims to be filed.
- The administrative staff responsible for billing at the clinic should be familiar with these panels’ rules.
- In many cases, the clinics lose out on potential revenue because they file their claims with redundant methods.
- Rejected or denied claims also affect the billing expenditure of the clinic negatively. Given a refilled claim costs around USD 25, hospitals and health systems could be spending more than USD 12,000 on each account every year.
- If you have an understaffed team working on common duties other than billing, you might want to reconsider outsourcing the job to billing specialists.
How do Outsourcing Partners help Revenue Cycle in Medical Billing?
Outsourcing billing partners can show significant improvement in your collections. The billing companies have experienced professionals working on each account so that you do not have to invest a hefty amount in improving your in-house billing team. Here are few ways that leading billing companies can help you:
- The revenue cycle management companies evaluate your financial performance with data-driven analyses. They take into account factors like the AR days, aged AR days, reimbursement rates, collection rates, and denial rates for your claims.
- They provide you with a comprehensive road map on how to improve your performance and increase your collections, targeting each problem with a specific solution.
- They have experienced professionals working on different medical specialties so that you have a more focused approach towards each department.
- They work with several clinics and have experience in handling a range of insurance panels. If you are facing problems with handling unique rules of different insurance panels, you can leave it to them to take care of the issues.
- Since most of them charge according to the rate of successful collections, they will always remain accountable to your clinic and see to it that you perform well.
- They are experts in managing denied claims. They use advanced software tools to get data reports on the correct claim details.
- The denied claims due to errors in document details mount to around 60% of denied claims. By eliminating manual errors through the use of improved software solutions, the chance of denied claims decreases significantly.
- Overall, the outsourcing partners can take care of the end-to-end revenue cycle in medical billing, decreases your billing expenditure, and improves your collections.
We hope this blog helped you understand how you can improve collections through the revenue cycle in medical billing. If you have any queries, please comment down below. Your feedback is valuable to us. Subscribe to our blog and our social media handles for more such updates on healthcare, medical billing, technology, and management.