5 Best Practices for Effective Revenue Cycle Management

October 8, 2022

Revenue cycle management (RCM) in healthcare facilities is used to track and collect patient payments. It begins when you schedule a patient for a clinical encounter and lead through the final payment for the rendered healthcare services. This guide will discuss the 5 best practices for effective RCM to help you stay profitable.

Best Practices for Effective Revenue Cycle Management

Keep Patients Updated on Medical Billing

One of the best practices is to train your clinical staff on patient education early in the care procedure. It will ensure patients are not dumbfounded when they receive a medical bill after an appointment or discharge.

Financially clearing patients consistently and quickly should be the top priority for any healthcare facility and medical practice. It will serve as an effort to manage bad debt. Staff should also learn to estimate the costs for different care services to guide patients and encourage them to pay their bills in a timely manner. Additionally, they should also update patients about any financial assistance programs they are qualified for.

Invest In Your Staff and Medical Billing Software

Continually educating staff is important whether they work at the front-end dealing with patients or back-end looking after reimbursements since all the improvements begin at ground level. Thus, you need to understand the processes and assist your team with the correct guidance, including patient-payer communication, data entry, payer rules, workflow tools, etc. With training, your practice productivity increases.

Conversely, providing patients with more payment options such as online payment will lead to stronger revenue cycle management (RCM) solutions - enabling feasibility and convenience. Additionally, you should focus on online payment options’ capabilities and strive to implement the latest technology to stay on top of your practice.

Prior Eligibility Verification

For effective RCM, you should verify patient insurance coverage before providing the care service. The regulations and requirements of insurance companies are ever-evolving. The rigid rules of payers may slow the reimbursement process, and increase the claim denial rate. However, automating prior authorization can optimize the clinical process, boost the revenue cycle and minimize the time and effort spent on this task by front-end staff.

Optimize Charge Collection and Coding

To efficiently collect payments for the rendered care services, develop and implement proper processes. Common areas where practices lose revenue are outpatient nursing procedures such as injections and IV procedures because of a lack of formal nursing documentation. On the flip side, you lose pharmacy revenue due to errors in reporting units and missing charges.

Therefore, pharmacy and nursing teams should double-check charts and claims for missed charges. Submit proper nursing documentation with starting and ending times and regularly review pharmacy charges to report the rightful pharmacy dispensing units.

Track Financial Performance

For your practice to run smoothly you need to maintain a consistent cash flow. To achieve it, you must put extra care into managing your finances. There are some key performance indicators (KPIs) you need to regularly analyze to gain a better understanding of your practice's financial health and identify the potential revenue leaks affecting your overall cash flow.

Following are the important KPIs you should consider tracking:

  • Net Collection Rate - It provides insights into the lost revenue as a result of delays in claim filing, uncollectable debt, and other non-contractual adjustments.
  • Account Receivable (AR) Analysis - Use your practice management software to analyze your percentage of AR over 90 days to determine whether it is an issue from the payer's side or patient's end, or both.
  • Charge Posting and Billing Lag Analysis - It helps you determine how long it takes for the provider to enter a charge and the biller to submit that claim to the insurance company.

Bottom Line

Whether you outsource your medical billing and collections to companies providing revenue cycle management solutions or do it in-house, using these best practices will help you increase your cash flow, reduce expenses, minimize account receivables, streamline workflow and improve control over your practice.