Tuesday, March 6, 2012
Does speed really matter? Unfortunately, it does when it comes to getting paid for the services you deliver – because speed of payment is one of the essential elements of good cash flow. And, that’s where “revenue cycle management” comes in.
If you haven’t heard that term before, it’s one every one on your management team should know. Revenue cycle management is the business practice that allows your organization to collect your clients’ bills on time.
In this time of tight budget health care budgets, many payers are looking for a reason not to pay your organization for services – or to delay that payment. Revenue cycle management helps you build a billing and collection system that results in speedier payment.
What elements affect speed of payment for services? There is a long list – billing cycles, prior authorization documentation, clinical documentation, service coding requirements, and more. The goal for your revenue cycle management strategy is to find the best way to bill for services that results in full, prompt payment.
What are some of the elements that you should consider in your revenue cycle management program?
Clean claims: A clean claim is one with no defects (including missing or wrong information) – and it goes without saying that eliminating those defects will improve your collections.
Focusing on easy collectibles at the expense of complex claims: Many companies cherry pick the easily collected money at the detriment of complex claims. Companies need to be aware that all uncollected money is lost money.
Writing off the hard-to-collect: Turnover is high in revenue cycle management and this often leads directly to higher costs, but the subtle threat is that new management will often let old billing go as either too difficult to collect, or because they want to start their own track record.
Timely filing: Many payers have lowered timely filing limits causing challenges with appeals. The window for some claims is so short that any mistake will land your claim back in your hands with insufficient time for reentry.
So, does keeping up with RCM sound too large for your organization to handle in house? Ultimately outsourcing may be the more viable option. It can lower costs (think salary, benefits, office equipment, training, EDI, supplies, real estate, and errors) and allow you to use your extra savings on capital equipment and patient care.
You must have a high-functioning RCM to keep your organization financially viable. The big question is where are you now and how can your RCM strategy improve.