7 best practices to master the revenue cycle

Over the past 10 years, patient responsibility for healthcare costs has increased dramatically. Even if healthcare providers get a great allowable from insurers, they still need to collect patient payments. The patient as the payer is a growing trend that will continue to challenge healthcare organizations' traditional revenue cycle management.

At Becker's 5th Annual Health IT + Revenue Cycle Conference in Chicago, Phreesia sponsored a workshop focused on revenue cycle optimization. Elizabeth Woodcock, MBA, FACMPE, CPC, founder and principal of Woodcock & Associates, discussed how to implement best practices within revenue cycle management while delivering a positive patient experience.

The cost of the revenue cycle is increasing

The cost of collecting payment has grown significantly in the last decade. Research suggests that it costs four times more to collect from a patient than from an insurance company. According to Ms. Woodcock, "If we run the ROI for our customer service team and patient collectors, nine times out of 10 it's negative."

Patients can be grouped into three categories:

  1. The Happies, who always pay their bills.
  2. The Nudgers, whose payment requires some nudges and motivation.
  3. The remaining patients, those who have no intention of ever paying.

The third group can't be influenced, yet health systems spend the most time and effort on them, Ms. Woodcock explained.

"A physician called me and said, 'I've sent this patient 26 statements. How many more do you think I should send?' I think the medical community is the reason the United States Postal Service still exists," she said. "We go crazy for this population instead of figuring out the cost to collect. We should focus on our Happies and cultivate them. They will be our champions and our loyal patients."

Revenue cycle management plays a significant role in patient satisfaction and the patient experience

Typically, RCM is relegated to one corner of the medical practice. However, RCM must be at the table when organizations discuss patient experience. Now that financial responsibility is in patients' hands, big problems can emerge at the end of the customer experience when it comes time to pay the bill.                 

Patients are rebelling against billing errors and complex, inconvenient processes. They want to make choices about their care — including the financial aspects. "This is a huge 'a-ha' moment. From a financial perspective, RCM offers an incredible value proposition to healthcare organizations. When RCM works well, it generates long-term gains in terms of patient loyalty," said Ms. Woodcock.

The revenue cycle touches all aspects of the customer journey

The revenue cycle is more than a back-office function. Approximately 50 percent of RCM follow-up work occurs because an error occurred on the front end. Revenue cycle management must account for the front end, mid-cycle and back end of the customer experience.

Ms. Woodcock offered seven best practices for mastering the revenue cycle:

  1. View schedulers as your "vice presidents of business development." When patients call to schedule an appointment, the scheduler can ask the patient if they want to pay their existing balance.
  2. Think about exceptions on the front end. Depending on the market, between 5 percent and 30 percent of patients may have changed insurance plans. Capture this information up front.
  3. Conduct the self-pay discovery process up front. Take patients who have no intention of paying and figure out if there is some insurance involved.
  4. Understand where financial clearance is vulnerable and close the loop. In the ambulatory setting, financial clearance is pretty good. It is often vulnerable in the dialysis center, infusion suite, nursing home or telemedicine.
  5. Remember that receptionists are "directors of first impressions and denial prevention." When receptionists take care of patient copays, they can also ask whether the person wants to pay their outstanding balance at the same time.
  6. Focus on claim accuracy. Automation may help. Rejections — that is, mistakes that are caught before they go to the payer and are denied — are OK. Organizations with high rejection rates often have lower denial rates.
  7. Move to bi-weekly, paperless bills. Since most Americans are paid on a bi-weekly basis, send bills on a bi-weekly basis. If patients want a paper statement, charge an administrative fee.

Conclusion

In this time of increasing patient financial responsibility and declining reimbursement, revenue cycle optimization can't be underestimated. "It's getting more expensive to collect from patients, but deploying automation technology can be a game changer." said Ms. Woodcock. "What I love about revenue cycle opportunities is that they are all margin. What can we attack that will generate the most value? If we can get it, it's 100 percent profit."

About Phreesia

Phreesia gives healthcare organizations a suite of robust applications to manage the patient intake process. Our innovative SaaS platform engages patients in their care and provides a modern, consistent experience, while enabling our clients to optimize their staffing, boost profitability and enhance clinical care. Learn how Phreesia helps create the capacity for more.

© Copyright ASC COMMUNICATIONS 2019. Interested in LINKING to or REPRINTING this content? View our policies by clicking here.

 

Top 40 Articles from the Past 6 Months