“Strategies to Boost Medical Practice Revenue Growth“
In today’s healthcare landscape, managing and growing a physician’s practice has become increasingly challenging. Healthcare providers need to deliver exceptional patient care while ensuring strong financial performance. Striking the right balance between quality care and financial stability is crucial for the success of your medical practice. There are many challenges involved in running a medical practice today – from paperwork and administrative work, EHR use and prior authorization to government regulations, rising costs, declining reimbursements, and negotiating with payers. As a result, more and more practices are relying on medical billing outsourcing companies to manage their revenue cycle. A December 2022 Revenue Cycle Management report noted that up to 61% of providers plan to outsource revenue cycle management tasks in the future.
Experts say that there many things that physician practices can do to stay competitive and boost revenue growth.
Before we dive into that, let’s take a look at the specific challenges that medical practices are likely facing in 2023.
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Challenges Facing Medical Practices in 2023: What Studies Say
Deloitte’s Outlook for Health Care, which is based on several surveys, predicted that healthcare providers are likely to face multiple challenges in 2023, including optimizing patient experiences, ever-changing industry regulations, impact of COVID-19, and technological integrations:
- Inflation and reduced reimbursements: Hospitals are facing increasing costs of labor and supplies, while cuts in Medicare reimbursement rates are posing financial challenges. These factors have the potential to negatively impact practice revenues.Moreover, healthcare systems can no longer depend on federal COVID-19 relief funds, leading to potential reductions in profitability for medical practices as the year progresses in 2023. Medical practices are facing cash flow issues due to increase in accounts receivable (A/R).
- Hiring and training staff: In September 2022, healthcare job openings reached an unprecedented high of 9.2% (Fitch Ratings). This surge required healthcare organizations to prioritize effective strategies for recruitment and employee retention. Staffing remains a challenge due to escalating costs and growing demand for experienced healthcare professionals. Engaging third-party revenue cycle management (RCM) companies for medical billing services can offer a solution.
- Patient engagement and retention:The healthcare industry is experiencing shifts in insurance payers, leading to larger patient responsibilities in terms of payment. This creates difficulties for healthcare facilities in retaining patients and providing satisfactory customer service. Consequently, healthcare providers are expected to face increased competition as they strive to deliver the best patient experience and retain their clientele.
- New regulatory mandates:Medical practices are facing substantial regulatory hurdles, particularly pertaining to prior authorization and the Medicare Quality Payment Program. These challenges have often increased over time. Physicians must respond and adapt quickly to new regulations like the No Surprises Act. A Medical Group Management Association (MGMA) survey found that regulatory hurdles are increasingly interfering with clinical goals and improving patient outcomes.
- Acquisitions or closures: As they may not be able to operate with low margins, many hospitals, especially small and local facilities could face acquisitions or closures.
How to Boost Revenue Cycle Management
Here are 7 viable strategies to enhance RCM:
Focus attention on the right areas: Practices need to focus attention on the specific area or areas that are lagging. Experts recommend that practices compare their financials and benchmark to that of similar-sized practices. This will give them a clear idea as to how they rank and if their performance meets the standards of an average practice. Things to assess include: the number of patients seen per day, the average reimbursement levels, and revenue per provider. Practices can improve their financial performance by focusing on the right areas.
Leverage technology: To optimize operational efficiency and financial performance, physician groups can leverage the power of fully integrated workflow technology and intelligent automation. By implementing a comprehensive platform that seamlessly integrates with existing systems, these groups can streamline their revenue cycle, reduce cycle times, and achieve greater consistency in their performance. Keeping pace with the rapidly evolving healthcare landscape requires a state-of-the-art, innovative platform that enables physician practices to proactively stay ahead. Outsourced medical billing support can help practices make the most of their technological capabilities.
Standardize processes: To address revenue leakage and cost overages that can adversely impact the bottom line, it is crucial for medical groups to standardize their processes. Many medical groups currently operate with fragmented systems and procedures, making it challenging to identify and rectify these issues. Standardizing best practice processes becomes even more essential in an era of lower operating margins. By implementing standardized processes, medical groups can effectively reduce unnecessary expenses and minimize waste.
Improve the patient experience: Consumer engagement has become increasingly important for the healthcare industry. Many studies have found that a positive patient experience can generate higher revenue. Today’s patients are seeking an overall satisfactory digital experience with personalization, various virtual access points, online scheduling, online payment options, and price transparency. This implies that to stay competitive, practices need to innovate and focus on meeting consumer needs and improving the consumer experience.
Combine front- and back-end responsibilities: Healthcare RCM typically consists of two main functions: the front-end and back-end processes. The front-end of the revenue cycle involves patient-facing activities such as gathering patient information, insurance eligibility verification, and registering new patients. On the other hand, back-end revenue cycle management encompasses tasks like claims management, denials management, medical billing, and the collection of the final patient financial responsibilities. According to a revenue cycle intelligence report, improving front- and back-end revenue cycle management collaboration can enhance financial performance. Partnering with an experienced medical billing company can ensure comprehensive support for both front-end and back-end processes.
Consider adding staff: The growing burden of chronic conditions has increased the complexity of care, and practices need to build a staff that can deal with all patient needs. Adding non-physicians providers and staff can help deal with this challenge and improve practice efficiency. Having support staff to manage patient messaging, prescription refills, and lab reports frees up physicians to spend more time with patients. Consultations can be improved with the help of scribes or medical transcriptionists.
Take steps to eliminate inefficiencies: Inefficiencies in the medical practice can lead to errors and waste of time, reduce productivity, and annoy physicians, staff, and patients. Proper time management is crucial to avoid backlogs and increase the number of patients that can be seen in a day. The layout of the office can also affect productivity if the physician has to waste time walking between exam rooms (www.medicaleconomics.com). Optimal design would be one that allows both physicians and patients navigate their way around easily, without wasting time.
Efficient patient scheduling is another key aspect when it comes to office efficiency and revenue. The goal should be to balance between seeing a sufficient number of patients to meet the financial needs of the practice while providing quality patient care. This can be achieved with the right mix of patients with chronic conditions and those with simple concerns.
Generate revenue via value-based contracting: Value-based programs compensate physicians with incentive payments for the quality of care they give Medicare patients. To take advantage of these incentives, providers need to evaluate Medicare’s value-based principles and measures and determine their potential earnings. They would have to focus on developing high quality, transparent, and secure data reporting capabilities as well as standardized processes and internal controls to reap the benefits of value-based reimbursement. Handling value based opportunities efficiently can boost revenue.
Negotiate higher rates with payers: Bad economic conditions may lead to disputes between payers and providers regarding the amounts paid for services (Medical Economics) Physicians should negotiate favorable contracts with commercial payers. Showcase the value that your practice offers and ask for more money based on that. Here are some expert recommendations on this:
- Organize and analyze your practice’s data before entering into negotiations. Understand the fee schedules of all payers and understand your break-even point. A proper data analysis will help demonstrate the value your practice brings to the payer’s members.
- Conduct a thorough SWOT analysis (assessing strengths, weaknesses, opportunities, and threats) of your practice. This will provide valuable insights that can be used during negotiations.
- Share practice data that showcases compliance and improved outcomes. If you report quality data for HEDIS measures (Healthcare Effectiveness Data and Information Set), present that data and use it as a basis for negotiating rates.
- Highlight how your services or offerings differentiate your practice from competitors. If you are seeing an increased number of patients due to opening additional office locations, growing patient volume over time, or offering extended hours or weekend clinics that reduce costly emergency room visits, emphasize these factors to demonstrate your value.
- Clearly communicate the rising costs of running your practice to negotiate a higher rate.
- Support your data with positive patient reviews, such as testimonials from satisfied patients.
By following these guidelines and effectively presenting your practice’s strengths, outcomes, differentiators, and cost challenges, you can negotiate with payers and maximize your chances of achieving favorable terms.
Effective medical practice management with implementation of careful approaches according to the latest trends can lead to success. While focusing on patient care, physicians should not lose out on revenue by submitting incorrect claims. Medical billing and coding outsourcing companies can help practice resolve their RCM challenges, including negotiating with payers to get the most out of every claim.