If your organization is like most across the healthcare system, stagnant or reduced reimbursement is mangling your margins. When revenue is restricted, it becomes ever more important for physician practices to keep their revenue cycle spinning by collecting the fees due to the organization, and in a cost-effective way. Revenue cycle performance is a strategic differentiator for organizations because it funds important functions and goals, including provider compensation and growth. With that in mind, creating a well-functioning revenue cycle requires organizations to maximize their opportunities to improve performance by focusing on the three Ps: people, process, and platform (i.e., infrastructure).
Opportunity #1 – People
To build or to buy your revenue cycle competencies; that is the question. Outsourcing all or a portion of your back-end billing operations can help lower costs. However, don’t assume this has to be an all-or-nothing proposition. Instead of outsourcing all billing operations, consider specific functions (e.g., coding, insurance follow-up) or a particular subspecialty in which your organization lacks specific expertise. This can be a good option when your organization needs capable resources and/or is having difficulty recruiting and hiring talent in a cost-effective manner.
Opportunity #2 – Process
Place your process under a microscope and learn the details of how patients move through the revenue cycle, from scheduling the appointment to when a collection agency may intervene. The reality is, when performing this exercise most organizations will uncover points of variation, inefficiencies, and opportunities to streamline the process and improve revenue cycle performance. One example is the claim scrubbing and denials management work queue process. Is it worth the time and resources to review 25 claims to prevent a single denial before adjudication? Or, should your staff work the incremental denials? These opportunities can add up to significant time and cost savings.
Opportunity #3 – Platform
Streamlining processes and providing people the tools necessary to keep the revenue stream flowing requires a sound infrastructure. Most practice management systems are sophisticated enough to augment revenue cycle operations through integrated capabilities, including work queues, logic, and process tools to guide and prioritize work flows and improve communication throughout the revenue cycle. Common benefits of the tools and processes include:
- Increased revenue through underpayment analysis and follow-up management
- Improved time-of-service and outstanding balance collections
- Enhanced communication between front- and back-end revenue cycle operations staff
- Better collections yield through real-time insurance eligibility checking
- Improved coding accuracy through coding support and selection assistance
The vast majority of healthcare organizations are overlooking opportunities (both small and large) to improve their revenue cycle performance, whether they realize it or not. Identifying and properly addressing these opportunities requires hospitals and provider groups to develop a revenue cycle assessment strategy and respond by thoroughly addressing the three Ps presented here – people, process, and platform. A healthy revenue cycle not only ensures that operations are adequately funded, but is also essential for providing competitive physician compensation and supporting organizational growth strategies.