Agencies of all sizes are liable to face risk due to under-optimized operations. In the world of post-acute care, a common issue that staggers an agency’s profits and progress arises within the revenue cycle, specifically mistakes within Revenue Cycle Management (RCM). Revenue Cycle Management is used by care providers across the country to track patient revenue from beginning to end. Overall, healthcare RCM is the process responsible for payment following quality care. This essential process sounds straightforward enough, however there are many hidden nuances within the cycle that commonly receive sub-optimal attention, ultimately leading to staggered profits, slowed progress, and lack of agency compliance. Luckily, actions exist to optimize these processes to, upgrade RCM practices and improve the satisfaction of the entire agency.
Pre-claim Review
It is important for agencies to ensure their bases are covered through an extensive pre-claim review. A pre-claim review is essentially preliminary protection through charting, documentation, and best practices by nursing staff. Compliance must occur before care begins. It is the first step in RCM. An extensive pre-claim review process happens at the patient level; the care practitioners filling out charts must ensure data is collected and documented with utmost confidence, complying with regulations and rulings. This necessary action ensures all billed services are essentially immune to audits after they have entered the revenue cycle. Following an extensive and compliant pre-claim review, the focus shifts towards optimizing every level of the revenue cycle to reach its full potential of RCM excellence.
Billing
The backbone of the RCM process exists within billing, the phase where agencies collect payment for services provided. In a post-acute context, payment is received from large payor entities such as Medicare. To optimize the billing process, it is important for agencies to satisfy payor requirements. This can involve knowing specific criteria, such as coverage policies and authorization requirements, and ensuring that all billing documentation meets these requirements. Failure to comply with payor requirements results in claim denials, delayed payments, and even potential legal issues. With a comprehensive understanding of specific payor requirements, the opportunity to further refine the billing process materializes through the following:
- Proper Coding: Accurate coding ensures that services are billed correctly and that payors are charged appropriately. This involves selecting the correct codes for each service provided and verifying that the codes are compliant with current regulations. In addition, it is important to have a system in place for educating staff to prevent coding errors before claims are submitted.
- Timely Submission: A huge factor in claims billing is the time frame in which the claim submission occurs. The window of time varies depending on the type of care, but overall, it’s the agency’s responsibility to educate staff on timeframes and submission best practices. Failure to submit timely claims will delay or deny payments, ultimately staggering cash flow. Practicing timely submission of claims is important when conducting billing.
- Utilization of Technology: Advanced developments in technology such as Artificial Intelligence (AI), or Robotic Process Automation (RPA) transform the success of RCM efforts. An agency that considers utilization of these systems will enjoy fully automated billing that ensures the achievement of complete compliance and accuracy.
Collections
Agencies enter the collections phase following the billing process. This phase refers to collecting any outstanding payments from patients, insurance companies, or any other payor entity. To streamline this process, agencies must establish a strong follow-up strategy with payors. This begins with a robust contracting strategy to ensure mutual agreement over timeframe and collections is upheld. Following up on collections, due diligence to review outstanding balances will further polish this process. Creating standardized methods to review outstanding balances can help eliminate errors and increase profits. After a fully optimized collections process is in place, strong management is essential to maintain stability. This involves developing and implementing policies and procedures to streamline the collections process, tracking, metric analysis, and continuous improvement, ultimately maximizing revenue, and minimizing the risk of bad debt.
Reducing Denials
Erroneous documentation work leads to claims denial which invalidates the entire process leading up to submission. Denials occur when a payor entity rejects submitted claims due to a plethora of reasons including, but not limited to, missing or incorrect information, coding errors, and failed criteria. Reducing denials is an essential step to uphold healthy RCM practices and prevent unnecessary costs. A comprehensive action plan against denials is the best practice to eliminate this nuisance, and it begins with staff training and education. Ensuring an agency’s staff remains up to date with changing regulations and rulings will tighten documentation and increase compliance. From there, the implementation of a structured denial management program empowers management to quickly address the root causes of remaining denials, while establishing the framework for a denial-free RCM process.
Increasing Reimbursement – Renegotiating Rates
Once the revenue cycle runs smoothly, agencies can shift focus to refining and perfecting the process. During this refinery period, the opportunity to renegotiate payor rates and increase reimbursements presents itself. Agencies with a fully compliant revenue cycle should prioritize intensive data collection on the full range of provided services. Leveraging this data to gain a comprehensive overview of operations, an outline of costs and dollar allocation acts as a bargaining chip to renegotiate rates. This opportunity empowers agencies to take the final step, maximizing profits and positive payor relations, while overhauling agency satisfaction and productivity.
This blog was originally published as "Best Practices in Revenue Cycle Management" by Harper Dion on June 6, 2023, for Maxwell Healthcare Associates. The Maxwell TEC editorial team has since updated this article to ensure accuracy and relevance.
