How Medical Practices can Better Handle Revenue Cycle Management in 2023

Revenue cycle management (RCM) is the process that healthcare facilities implement to obtain reimbursement for services provided. It involves many steps, from patient eligibility verification and registration to medical coding, claims submission and denials management. Every healthcare organization needs a smoothly operating revenue cycle with compliant billing and coding processes that maintain cash flow. However, the past two years posed unique challenges for RCM that threatened the survival of medical practices and other healthcare facilities. With new administrative regulations and billing and coding requirements and challenges of collecting payments from a financially-depleted patient base, practices struggled to manage RCM.

Many practices are working with medical billing companies to maintain their cash flow, reduce operational costs, and stay compliant while delivering high-quality care. Looking ahead, there are many things that practices can do to better handle RCM in 2023 and beyond.

• Focus on Revenue Optimization: Managing the business aspects of a medical practice requires considerable skill. While prioritizing quality patient care and improving customer service aspects, effective cost management is crucial to the survival and growth of a practice. Overhead costs include direct costs (staffing and medical equipment, and other costs related to patient care), fixed costs (office rent and malpractice insurance), and variable costs that change with the practice’s activity level (such as medication and supplies). During the pandemic, practices faced increased costs related to COVID-19 (such as PPE equipment costs) and lost revenue due to cancellation of outpatient office visits and elective procedures.

To ease financial strain, practices need to plug revenue leakage and strive to maintain a regular, optimized cash flow by:

• •  Paying attention to money going out in the form of overhead costs, payroll and miscellaneous expenses and cutting unnecessary expenditures to save money
  • Prioritizing collections and manage denials management to capture every dollar owed

Outsourcing is a viable strategy to reduce costs in these challenging times as it helps practices avoid major investments in infrastructure, software, and personnel.

•  Ensure efficient insurance verification and prior authorization: Patient financial responsibility has increased. Verifying patient coverageand determining their responsibility for payments (copayments, deductibles, and co-insurance) before the office visit is a key RCM step. Many medical services also require prior authorization and most specialties struggle to obtain them on time. Neglecting or ignoring these aspectscan lead to claim denials, affect cash flow, and negatively impact the patient experience.

Best practice to manage these important but time-consuming tasks is to hire an insurance verification and authorization expert.

• Improve medical coding quality: Medical coding impacts every part of the revenue cycle that follows it.Accurate medical coding is crucial to ensure accurate claim submission and reimbursement for a smooth revenue cycle. ICD-10 and CPT codesand guidelines change every year and practices need to stay on top of these changes to report their services correctlyFor instance, CPT 2023 has new and revised codes in every section except anesthesia. Accurate coding is also important to report services correctly in new value-based care programs.

Implementing computer-assisted coding (CA) solutions to identify the appropriate medical codes from clinical documentation and performing internal coding audits are key strategies to improve medical coding quality. Outsourcing is an ideal way to leverage expertise of AAPC-certified coders and implement suchmedical coding improvement strategies.

• Focus on reducing denials: Prevention is better than cure and every practice should prioritize claims denial prevention. However, denials can occur due to many reasons and practices end up spending a lot of time and money reworking unpaid claims. Timely filing write-offs occur when claims are filed after the payer’s deadline. All of this can significantly impact a practice’s revenue cycle.

Recent reports say that healthcare organizations are stepping up their denials management strategies in 2023. In a survey by Experian Health nearly three out of four respondents reported that reducing denials is their highest priority, and 70% said that it is more important than prior to the pandemic (www.healthleadersmedia.com). Every practice should have proactive strategies in place to manage denials. The process involves identifying the root cause of why a claim was denied, evaluating denial trends to identify if they are typical to one or more payers, and most important, implementing strategies to prevent or reduce the risk of future claim denials.

• Implement strategies to collect patient balances: With their low monthly premiums, high deductible health plans (HDHPs) are becoming increasingly popular. But HDHPs have high deductibles, requiring patients to pay the cost of care up to a set amount before coverage begins. Millions of people lost job-based coverage during the pandemic and collecting balances from patients who are uninsured or underinsured is a major challenge for practices. Collecting payments from self-pay patients is a challenging task. The following strategies can help:

• • Create a payment policy and make it available on your practice website
  • Offer payment plans
  • Identify patients with large balances owed and reach out to them to determine what they will pay at their next appointment
  • Make it easy for patients to pay – Offer multiple payment options. Encourage prepayment via patient portals and offer online payment options
  • Generate proper statements
  • Make sure front desk staff are educated on collections

Reach out to patients in a friendly manner and make sure sensitive payment conversations are conducted in a private setting. Significant legislative and regulatory changes have occurred over the last two years, and many changes that will impact RCM are expected in the foreseeable future. Tracking days in accounts receivable, ensuring payment is received and following up on denied claims is necessary to ensure efficient RCM processes that maximize revenue generation. Having human expertise to manage RCM will be key to ensuring practices receive timely and accurate reimbursement. Outsourcing medical billing to an experienced service provider is the best way to improve medical billing and coding practices and better handle RCM.

Written By Julie Clements

Julie Clements, OSI’s Vice President of Operations, brings a diverse background in healthcare staffing and a robust six-year tenure as the Director of Sales and Marketing at a prestigious 4-star resort.

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