Tuesday, April 24, 2012
Welcome to the era of shrinking funds – where reluctant creditors, unmatched government funds, and a move away from cost-based reimbursement means the already important issue of cash flow will take on a new earnestness. Add to this the high prevalence of bone-deep budget cuts, and organizations who are already operating on a very thin margin will need to manage cash flow extremely closely (see Five Ways To Navigate The Fiscal Crisis ).
My colleague and Business Development Vice President Tim Fazenbaker touched on the importance of managing revenue last month in his piece, A Revenue Cycle Management Primer all members. Many providers (and you might be one of them), who have been accustomed to receiving a lump payment at the beginning of the month from their payer will need to find ways to adjust to a new payment methodology in which you provide the service, then bill your payer, then wait 30-45 days for payment (see Beyond FFS all members).
With the possibility of even more drastic revenue fluctuations becoming the norm organizations must learn to act quickly (see 32% of Non-Profit Organizations Reported Decrease in Revenue in 2010 and 41% of Non-Profit Human Service Contractors Report Delinquent Government Payments ). Providers must bill and collect on every service provided and this heightens the importance of good billing processes and software systems (see The Collections Conundrum all members) Here is a quick checklist of billing questions you should ask yourself:
Are you collecting at point of service?
Are you correctly billing for everything you can?
Are you collecting correct information before providing services?
Have you eliminated coding and procedure problems?
Are you prepared for denials?
To improve your collection efforts, you need to be able to answer “yes” to all of those questions. And to do this most organizations will need to take another look at their consumer interface and find ways to both make the collections process simpler for consumers, and to adequately collect the data that their organization (and payers) will require. A lack of accurate data at the point-of-service was recently cited as the number one reason that less that less than 30% of bills are collected from consumers (see 70% of Hospitals & Health Systems Collect Less Than 30% From Patients at the Point of Service , Consumers Can & Will & Must Pay for Services: Mastering the Self-Pay Process is a Necessity for Your Organization and Are You Ready to Write Off 14% of the Market? all members).
Improving point-of-service interactions will also help your “up-front” billing and collections efforts, as well as effectively responding to payer denials. As public funds shrink, or remain locked at out-of-date reimbursement levels, it is more important than ever to correctly bill and collect everything you can. To be successful at this, admissions staff must do an accurate job before the rest of the process has a chance to succeed (see Improving Your Back Office Collections: Steps For Better A/R Practices and Maximixing Your Medicaid Billing & Collections ).
And, if you are thinking about pushing cash-flow responsibilities off on the finance department, or the chief financial officer, you should rethink your approach. Operating a financially viable organization is the responsibility of your entire management team – including clinical managers (see Metrics-Based Management: How To Improve Your Bottom Line With Better Use Of Data all members).
Rejean Carlson, MBA
President, OPEN MINDS
For another free resource, see: Prevent Revenue Leakages From Flooding all members
This is free for the next sixty days to all registered OPEN MINDS Circle members.