A recent survey of office-based physicians looked into the state of revenue cycle management (RCM) across various specialties, staff and locations. The RCM Survey Report called “What’s Happening Behind the Billing Office Door” evaluated several high-level metrics including first-pass clean-claim rate, net collection percentages, average days in A/R, and outstanding collections for 120+ days.
The survey revealed some troubling statistics, namely that many providers were mismanaging their billing cycle and missing opportunities to optimize their revenue cycle. For instance:
- Nearly 50% of providers reported having only one person handling the entire process.
- Among the practices who outsourced their billing, 31% said they still handled their denial resolution in-house.
- When asked to rank their own in-house effectiveness at following up on claims denials, only 15% rated their process as a “10” or “excellent” while 31% said their abilities would be rated between a 1 and 5.
- Only 4% of providers would give themselves a 10 on their ability to ensure all electronically submitted claims made it to the carrier. 49% rated their e-submissions between a 7 and 9, and 22% rated themselves a 5 or less.
- Even more eye-opening were the responses to the ICD-10 transition question. Only 21% were “very confident” in their ICD-10 preparation, 50% were “somewhat confident” and 23% of practices were “not at all confident.”
- Billing questions and/or issues account for between one and 40% of phone calls from patients.
- Only 35% of respondents said they had implemented a credit card program, though most agreed it was a proven method for payment collection.
- Only 11% of practices said they were able get charges entered into their system within hours of service, while nearly 1/3 said it generally took them a day to enter that information.
- When it came to having safeguards in place that ensured services rendered were billed, only 15% had safeguards they considered a 10 or excellent while 55% rated their safeguards between a 7 and 9 and 23% rated them between only a 1 and 5.
- Some of the more shocking numbers came when practices were asked about their process for checking every EOB and CPT code. Only 10% rated their methods as excellent, 35% rated it between a 7 and 9, and the majority, at 46%, rated their process between a 1 and 5. Some definite room for improvement it would seem.
- The overall average number of days in A/R was 35 while 5% admitted their average days in A/R was 60.
- 62% of providers reported that their practices’ percentage of outstanding collections for dates of service older than 120 days fell between 1 and 20%. The overall average for percentage of collections over 120 days was 34%.
What do these numbers tell us? They tell us that managing a revenue cycle is one of the most complex and frustrating factors of running a practice. No doubt any doctor you ask would agree. An efficient and streamlined revenue cycle is critical to ensuring a healthy bottom line, which is why it’s extremely important that providers choose the right revenue cycle management partner.
Here are some things to LOOK for when selecting an RCM partner that will be right for you:
They Have Adequate Refund Policies
You absolutely want to partner with someone who is also going to strive to establish and maintain an excellent patient experience just like you do. Most insurance payor contracts require third party billing providers to process refunds within 30 days. When interviewing prospective RCM partners make sure to ask about their refund policies to understand whether their protocols are timely and compliant with industry standards.
Their Eligibility Write-Off Protocols Meet Industry Standards
Generally speaking, the “patient not eligible” denial is the one most received. You will definitely want to ask each RCM vendor how (and how much) research is conducted to determine a patient’s eligibility status. Go with a partner who uses digital avenues to determine patient eligibility.
Their Payment Compliance Levels are Very High
It goes without saying that your revenue cycle management partner should strive to reach maximum compliance levels. Ensure they are able to verify that network insurance contract reimbursements are being handled and processed correctly. You only want to work with an RCM vendor that performs frequent internal quality assurance audits.
They Conduct Periodic HIPAA Audits
And speaking of audits, it’s equally important your RCM partner conduct HIPAA audits as well. Yes, new technology solutions have benefited the health care industry by creating faster and more efficient processes, but it has also posed tremendous new risks to the privacy of patient information. Your Revenue Cycle Management partner absolutely needs to perform periodic audits to ensure their systems and processes are always 100% in compliance.
Payment models have changed in the industry. Insurance reimbursements have decreased while patient liability has increased. Yet it has become increasingly difficult to collect payments from patients. Look out for vendors who focus efforts on insurance payments and have no proven processes for collecting payments from individual patients.
They Don’t Review Credit Balances
Any reputable RCM company will frequently review credit balances and follow up with patients and insurance companies to make sure you get paid. Should you discover your prospective RCM partner has a habit of allowing outstanding credit balances to age without taking proper recourse, run for the hills.
A Lack of Coding Expertise
You only want to partner with a company that is able to demonstrate certified coding expertise. Make sure they can supply the appropriate documentation that support CPT codes that are being billed. Go with a company you feel 100% confident will be able to code in a manner that will optimize your revenue stream.
With each passing month it seems running a successful practice becomes more and more complicated and challenging. But it doesn’t have to be this way if you partner with the right people who not only have the expertise but your best interests at heart.
Alex Tate is a digital marketing specialist, content strategist, and health IT Consultant at CureMD.