What are the most significant revenue cycle management challenges in your medical practice? Healthcare revenue cycle management is a complex cycle of interactions between the patient, provider, and healthcare plan/ insurance company. Although technology has helped streamline medical coding, billing, and claims processing to a great extent, most providers will agree that there is scope for improvement in the RCM in their medical practice.
Here is a list of the top healthcare revenue cycle management challenges that medical practices often face and tips on how to overcome these challenges.
Common Healthcare Revenue Cycle Management Challenges
Even before the pandemic, medical practices faced the increased administrative burden of collecting payments from patients with high-deductible health plans. According to a 2020 study by InstaMed (a J.P.Morgan Company), 78% of providers take more than a month to collect patient bills greater than $1000.
The delays in collecting patient payments are often the result of inadequate patient collection strategies. The chances of collecting patient payments decrease significantly when the patient walks in for an appointment without prior knowledge of how much the medical service is going to cost them. Yet, many medical practices continue to rely on manual processes to verify insurance eligibility, which can result in delays and inaccuracies in determining patient payment responsibility. Adding to the risk of delays in revenue collections are manual errors in charge billing, inaccuracies in capturing patient demographics, and outdated knowledge of medical billing guidelines.
Claim denials significantly increase the chances of a medical practice not getting paid by either the insurance plan or the patient. Unless the medical practice has obtained an ABN (advanced beneficiary notice) before performing the medical service, the likelihood of collecting payments from a patient for a claim denied by an insurance company decreases even further.
Medical coding and claims submission requires knowledge of the latest billing guidelines and systematic tracking for payment posting. Medical billing staff must ensure that any claim denials are rectified and resubmitted to the insurance company or posted as out-of-pocket expenses to the patient’s account.
Customer communication on out-of-pocket expenses both prior and post the doctor’s office visit is vital. Sending physical statements is the main mode of customer communication for most small and medium-sized medical practices. As per the InstaMed survey, only 23% of providers send electronic invoices to their patients, which contrasts with patient preferences because a majority of 83% of patients prefer to receive eStatements.
Apart from the added complexity of billing guidelines, medical providers must also contend with increasingly demanding customers. The inability of a medical practice to improve the patient payment experience is likely to impact future behaviors of customers. Millennials and Gen X, who are unsatisfied with the payment experience at a medical practice, are 28 percent more likely than Baby Boomers to shift providers.
How to Overcome Challenges in Healthcare Revenue Cycle Management
Call it a ‘retail’ revolution in healthcare, but post the pandemic, many medical practices realized the need to customize the payment experience to offer more flexibility. A patient-centric approach will allow providers to manage revenue flows as well as build long-term patient relationships.
With many patients finding it challenging to pay their medical bills, as per a Healthcare Financial Management Association (HFMA) survey, many practices deployed patient-centric patient collection strategies, which included
(a) increased patient payment options (contactless payment, discounts on prepayments, and flexible payment terms)
(b) adjusted bad debt placement timing, and
(c) delayed credit reporting.
A patient portal has become a prerequisite in healthcare revenue cycle management. Patient portals can be used to register new patients, capture the latest insurance information details, send e-statements and payment reminders. Delivering value-based healthcare becomes that much easier when you can communicate directly with patients and at their convenience, sending them reminders of upcoming health checks and offering information about the other valuable services your practice provides.
Implementation of the No Surprises Act 2022 means that patients can no longer be made liable for balance billing (for services received by out-of-network providers at an in-network healthcare facility). To avoid falling into the loop of an arbitration process for denied claims, medical practices must improve accuracy in the pre-service stage, including patient information capture and prior authorization for insurance. An automated patient eligibility report must be run (using an eligibility verification program) before the patient visit to check insurance validity and the copay amount. The patient’s out-of-pocket amounts must be collected prior to the appointment.
Letting a patient walk out the door without collecting payment or establishing a payment arrangement diminishes the likelihood of a practice receiving payment. Chasing for payments after the service is provided is also time-consuming and costly. The medical practice staff handling appointment booking must be trained to talk money with patients, including communicating the insurance eligibility, copays, deductibles, and the preferred mode of payment. Make patients aware of your medical practice’s payment policy, preferably before the first appointment.
Streamlining the multiple steps of healthcare revenue cycle management can be daunting for even the most established medical practices. Failure to keep up to date with changing medical billing and coding guidelines will spike the claim denials, result in piling accounts receivables, and add to the administrative costs of owning a practice. Outsourcing medical billing will give you access to the latest healthcare billing technology and a team of billing experts. Choosing the right medical billing service can make all the difference for your patients and your financial future.
As a medical coding and billing service (that has worked with hundreds of medical practices and healthcare organizations over the last two decades), we know that revenue cycle management is one of the most daunting aspects of medical practice ownership. After all, the sustainability of your medical practice depends on how accurately you bill and how much of the billed services you can collect. We are here to help you overcome the roadblocks in efficient RCM. Connect with us today for a free RCM consultation.