An efficient RCM (revenue cycle management) team can make your practice’s revenue processes sing, but how do they do that? Moreover, how do they track success for your practice, and what exactly does successful medical billing look like?
In a recent episode of our podcast, On the Health Record, we spoke with DrChrono’s Director of RCM, Tiffany Wells, to understand what her RCM team does to boost the billing efficiency of DrChrono RCM users. Have you ever wondered how an expert medical billing team operates? Read on to learn what Tiffany has to say! Then make sure to listen to Tiffany’s full interview here for even more insight.
What is the difference between a software account manager and an RCM account manager at DrChrono?
A software account manager helps the practice try to find their best workflow in DrChrono by using the software and also adding on partner applications that could help in areas in which they may be struggling. An RCM account manager focuses on overseeing their revenue. Once a provider does their work on the front end and submits their claims to us, an RCM account manager is responsible for making sure the claims go out the door as clean as possible for the payer.
Then they start to dive deep in the AR process. We have clear policies and workflows in place for following up on very particular types of denials that may be specific to that practice and their specialty. Because we work with many practices, there may be some similarities we can leverage from one practice’s situation to another to solve more unique problems.
How does the RCM process work?
RCM, or revenue cycle management, consists of all of the pieces that go into getting claims paid. That starts at the front end when an appointment is scheduled. Benefits must be verified to ensure that the provider is going to get reimbursed, and the patient has coverage for the services they require. We also need to see if authorization is needed for the type of service that the patient is getting treated for.
Those steps lay the foundation for how quickly we’ll be able to get that claim reimbursed. Then the clinician does their documentation in their EMR, and that translates into the type of codes that they’re billing for. That’s what gets submitted to the insurance company. In most practice management systems, DrChrono included, there are level one scrubs that happen to make sure that we have all of the data points necessary. That includes the patient’s name, date of birth, the policy number, CPT code, diagnosis, and more.
The claims are then transmitted to the clearinghouse, and they have level one scrubs, as well as a few of the level two. Level two scrubs are more in depth, and that’s where your medical necessity is built in. Each payer has their own guidelines that they follow, but your clearinghouse will have some of those level two scrubs. Next, the clearinghouse passes it to the payer, and the payer does their scrub before deciding to either pay or deny that claim.
If it’s rejected, we can work the claim for anything that did not pay, and then we can follow up or send medical records for anything that substantiates that level of service. RCM has a lot of moving parts, but that is the overall gist of the cycle.
How long does the RCM process take?
Clean claims can be paid as quickly as 14 days. If the claim has issues, resolving that can potentially go on for months depending on the payer. For that reason, the more electronic enrollments you have with your payers, the better, because then we get all of our remittances back electronically. That allows us to work things more timely, but it can still go on for four, five or even six months depending on the reason for that original denial.
Coding is an essential step in submitting claims. Can you talk about why the step is important and what makes it difficult?
Coding consists of a few different pieces. One is your CPT codes, and that’s going to describe what you did at that visit today. The other is your diagnosis codes, and those explain in detail as to why that service was done. A lot of it will have to do with the patient’s history as well. What makes coding so complex is that your diagnosis code and CPT code combinations have to work together to support medical necessity.
Every payer has their own rules that they follow, but luckily, most of the payers will generally decide to follow their medical care contractor because it’s simpler that way. However, we do have other payers that add rules on top of it, and it’s hard for providers to know each payer’s medical necessity rules when they aren’t in their billing day in and day out. That’s one reason why many practices benefit from RCM services.
Is there one area that’s more of a struggle for providers?
It depends on how well the provider knows the insurance that they’re in contract with, but coding is always going to be a pain point. Rules constantly change with payers. There are new updates every year, and it’s really hard for a provider to stay up to date. That’s where having a team does help because we do that for you. We also retrain the clinician on how to chart and what should be documented. For example, there may be other activities that happen outside of the visit that can be included in the total time of the visit, and providers need to be aware of those. Our coders have to make sure that providers know how to create documentation that substantiates the codes that are billed.
What metrics indicate successful revenue cycle management?
We use six metrics to assess an account on a monthly basis. First, we look at the clean claim rate to understand how many claims have gone through the clearinghouse without having any rejections come back. The main goal is to get clean claims out of the door. Part two is the denial rate. We want that denial rate to be under 8%. Then we also check to see how many claims billed within the month were paid in 30 days.
That will indicate how well we set that practice up for success. We also need to have the ERAs which are essential as it comes to timely filing and filing for appeals. The faster we get that information back, the faster we’re able to act on it. Another factor is identifying how many claims did not pay on that first pass submission. Once we get past those, we look at days spent in AR which is the average length of time a claim is sitting on your books. Ideally, we want that to be under 35 days for all claims or appointments.
Additionally, we have your 90 plus which demonstrates the aging of a claim. Every claim starts aging from the time that the charge is inputted. Then we count that claim in 30 minute increments until we get to 120 days. Each time that claim moves throughout the process, it becomes more critical to address it as soon as possible. Only around 25% of claims should be 90 or older because the older your claim is, the harder it is to collect on it. The last metric is your net collections percentage which is a calculation of the total charges that you billed that month, how much came back in dollars and then subtracting any adjustments from there.
Revenue cycle management is complicated, and that is why so many medical providers choose to outsource it to a team of billing and coding professionals like those on Tiffany’s team. If you want to learn more about RCM and Tiffany’s experience leading our RCM team, make sure to listen to the full episode of On the Health Record here.