5 Tips for Improving Revenue Cycle Management at Your Practice

Tue Jan 16, 2024 by Evercommerce

How can a healthcare organization improve its revenue cycle management (RCM)? It’s a complex question considering the many aspects that affect it. You may have multiple concerns, as many points of failure exist. Optimizing the cycle should be a priority. Without strategies to improve revenue cycle management, you could be in financial peril.

To improve, you’ll need to understand the importance of RCM. Then, address its challenges. Keep reading to learn about these and find tips to improve the process.

Why Is Revenue Cycle Management Important in Healthcare?

For a medical practice to be successful, it must generate revenue. It involves accurate submissions to insurance companies and collecting from patients. These are two unique revenue cycles. Each is crucial to your financial health.

Effective RCM through processes and technology offers insight. You can understand cash flow and its blockers. Because it’s complex, many practices struggle with all the nuances. It strains resources and affects operations.

Failure to prioritize RCM creates financial struggles. A healthcare payments trends study offered context. It found that 41% of providers depended on external funding to remain open. The reasons included:

Larger past-due balances due to self-pay, co-insurance, and high deductibles
Staffing shortages that led to fewer patient visits
Relying on mailed paper statements for collections (69% of providers wait 30+ days to collect)

In addition, your practice, like many others, may have seen an increase in claim rejections. With so many opportunities for error, most providers deal with payor reimbursement delays.

Doctor writing on clipboard

Impact on Patient Satisfaction

Efficient revenue cycle management positively influences patient satisfaction. It can go the other way, too. Without it, the impact is negative.

Today’s healthcare consumer has expectations around transparency and convenience for medical bills. There are direct links between revenue cycle management and patient satisfaction.

First, there’s the need to provide clear estimates of their responsibility. There’s a disconnect here; only 47% of consumers said they receive accurate pricing. If there’s miscommunication, patients may leave.

Second, there’s adapting to how they want to pay. A payments survey concluded that 79% of consumers want to pay medical bills digitally. Thus, transitioning to electronic statements is critical. Doing so gives patients convenience and simplifies RCM.

Third, there are payment options. This can mean the ability to pay with credit or debit cards online. It can also relate to payment plans. Providing these upfront can stop the collection work. It also allows people to get care they can’t immediately afford.

Your practice must evolve to deliver on patient expectations. If you fail to meet them in terms of transparency or convenience, they have other options.

You can achieve this by:

Delivering accurate estimates and communicating payment options
Providing a user-friendly patient portal that allows users to review statements and pay them
Offer digital payments so patients can quickly and easily pay for treatment from any device, anywhere and anytime

Identifying Challenges in Your Practice’s Revenue Cycle Management

Answering “How can a healthcare organization improve its revenue cycle management?” starts with challenges.

When evaluating how to improve revenue cycle management, these challenges are likely on your list:

Inefficient data entry. If staff does coding and billing manually, it’s time intensive. As a result, there may be delays in submission, slowing down reimbursements.
Coding errors. Old-school approaches to coding are ripe for mistakes. They can range from typos to upcoding and not including documentation. These can pile up and require even more work for resubmission.
Claims denials. If there are errors, claims kick back. They aren’t the only cause of rejections. You may not have requested preauthorization. There could be duplicates, or the verification of coverage was inaccurate.
Low collection rates. Getting payment for patients can be an obstacle. If there was no collection before the service, you’ll have to chase them. Doing this with mailed invoices adds more time to the cycle.
Incomplete information from patients. Revenue cycle management begins with registration and insurance verification. If there’s no digital way to do this before the appointment, it’s all manual. This can lead to issues with accuracy and eligibility.

If these challenges sound familiar, you’ll appreciate the tips to overcome them.

FROM ONE OF OUR PARTNERS
Revenue Cycle Management Challenges Facing Healthcare Providers Today

5 Tips for Improving Revenue Cycle Management at Your Healthcare Practice

Doctor writing on clipboard

How can a healthcare organization improve its revenue cycle management? Following these best practices can make a huge difference:

1. Ensure Digital Access for Patients

Patients overwhelmingly want digital healthcare tools. They are also key in revenue cycle management. They support patient engagement and simplify the registration and billing process.

Key features to seek include:

Self-service of account to update contact and insurance information
Insurance verification
Payment plan setup
The ability to view invoices and remit payments online
Mobile-friendly formats
Communication tools to remind patients about past-due amounts or billing changes

By offering this portal, you engage patients and enable them to have current information relating to their medical bills.

2. Upgrade Medical Billing Technology with Automation and AI

The revenue cycle has a lot of efficiency opportunities. Streamlining tasks through automation solves issues related to:

Staffing shortages
Loss of productivity
Moving data from EHRs to medical billing software
Inaccurate charge capture

With automation, your staff gets more done. Reducing administrative strain is crucial to a healthy practice. It allows you to see more patients and render more care.

The second technology innovation is AI in medical coding. An AI tool as part of your revenue cycle management is an error finder. It’s like having an expert coder that can view submissions at speed. It can alert you to inaccurate codes, missing information, and other issues.

With AI as your evaluator, you will experience fewer claim denials due to coding errors. These small changes can have a significant effect on your cash flow.

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How Medical Billing Companies Can Avoid Medical Billing & Coding Errors

3. Tap into Your RCM Data for Insights

Since revenue cycle management has many aspects, there’s a lot of data. You may not have access to this. Even if you do, it may be hard to analyze for insights. With the right RCM platform, analytics are available in real-time.

You can view dashboards and run many reports on data points. If it’s accessible and in one spot, you’ll be more easily able to identify bottlenecks. It can also pinpoint the common errors or denial reasons so you can work to address these.

4. Fill Staff Gaps by Outsourcing

Some practices choose to outsource medical billing with RCM services. In this scenario, experienced coders do the work for you. They use your platform, so you still have access and oversight.

It can be a cost-effective way to streamline claims submission. Since they are such experts and leverage technology, claims are more accurate. It takes burdens off your team’s plate, allowing them to focus on patient care and revenue growth.

5. Manage Claim Denials More Effectively

Health insurance claim form

Can you eliminate all denials? Not likely, but you can respond to them quicker to resolve the problems. When payers kick back a claim, you need to follow up accordingly.

These may be falling through the cracks. If you never resubmit, you lose revenue. Having software that flags these claims is vital. It separates them from others so that you can address and resubmit them.

In all these tips, remember to continue to track your revenue benchmarks. After you applied these new strategies, did things improve? If not, you may have other hidden challenges.

RCM is an ongoing process to optimize. It’s something to assess often with the help of analytics and reports.

How You Can Start Enhancing Your Revenue Cycle Management Right Now

What can you do right now to improve your healthcare organization’s revenue cycle management? The tips above involve assessing and implementing.

Before you begin, take these actions right now:

1. Document the Current Steps of Your RCM Process

Creating a formal RCM process document ensures consistency. It also helps you determine gaps. You’ll need this in your evaluation of potential changes (e.g., new software, outsourcing).

2. Develop or Revisit Revenue Cycle Key Performance Indicators (KPIs)

These metrics include days outstanding, denial rates, clean claims, and collection rates. By implementing successful KPI measurements, you have more visibility into your financial performance. Setting them and monitoring them is essential to improving revenue cycle management.

Offering a patient portal doesn’t mean people adopt it. They may be unaware of it, so start with awareness. Enroll any new patients automatically. For established patients, review it during appointments. You can also send email reminders.

4. Get Feedback from Your Employees

Send those responsible for medical billing a survey about issues. Ask them questions about the challenges and issues they face.

5. Understand How Patients Pay

Look at any data you have about payment preferences. Even if you don’t have online payments, you can still review how they pay. Do most send a check? Or call to pay by credit card? With this information, you can design a strategy to convert people to electronic invoicing and payments.

6. Standardize Estimates for Patients

Be sure these follow any compliance guidelines and are accurate. Doing this creates consistency and meets patient needs.

Your healthcare organization can improve its revenue cycle management with these actionable steps.