Common revenue cycle pain points physician practices should address now

The latest statistics show physician practices are seeing a slight rise in patient visits, but many are still in peril and need all the help they can get to ensure survival after a period of low volumes.

According to the Common Wealth Fund, the number of patient visits declined nearly 60% by early April. Although we saw increases in the last few weeks, the number of visits is still roughly one-third lower than what was seen before the pandemic.

The drop in patient volume affects physician revenue directly, so it is crucial to squeeze every possible dollar from the revenue cycle.

Here are some actions to take today to maximize payer reimbursement:

• Contract adherence: If your revenue cycle platforms support contract adherence and you are not leveraging them, now is the time to take action.

Some organizations keep a close eye on how carriers process claims. They upload contractual allowables in the practice management system or to a third-party vendor in order to maintain them on a regular basis. This enables automatic routing of underpayments after payments have been posted to worklists for end users to address. Other organizations perform monthly, quarterly, and/or annual audits outside of their revenue cycle platforms and for the most part work all variances from a report.

Unfortunately, there are other organizations that do not have the tools and/or bandwidth to support this process and are unaware if carriers are processing their claims according to their contracts.

Ideally, underpayments should be identified and routed to end users daily. According to a poll conducted by MGMA on April 3, 2018, only 24% of respondents follow this type of process.

If you perform random audits, this is the time to run some of those reports and identify revenue opportunities. 

• Denied claims: Let’s review some surprising statistics about the impact of denials:

• 30% of claims submitted for the first time are denied or rejected for various reasons
• 50% to 65% of denied claims are never worked due to lack of time or knowledge
• 90% of denials are preventable
• More than 70% of denied claims can be overturned
• It costs around $25 to appeal a claim

If 30% of the claims are denied and 60% of the denied claims are never addressed, that means practices are leaving 18% of their total revenue on the table. This is another area of opportunity to address right now.

Implement processes that avoid and eventually eliminate these denials. Start by leveraging your denial management tools to identify the reasons your claims are being denied. If you do not have a denial management tool, consider running reports from your practice management system that include reimbursement comments and remark codes.

Once you have the data, categorize all denials based on responsible party. For example, you can use the following groupings:

• denials caused by demographic inaccuracies (front office)
• denials caused by missing authorizations (pre-auth)
• denials caused by coding errors (coding)
• denials caused by billing errors (billing).

The purpose of categorizing these denials is twofold:

1. Identify which area of the organization might need additional training to complete their tasks
2. Identify which area of your practice management system needs to be leveraged to help you prevent these denials

Once you have identified why your claims are being denied, consider tackling the issue in two steps. First, go after the dollars that you have left on the table. Second, focus on implementing processes that leverage technology and training to prevent these denials from happing in the first place.

• Aged accounts receivables: Yes, it is true! The longer you wait to collect what is owed you, the less likely you are to collect those dollars. If you are trying to squeeze every dollar out of your accounts receivable, this might be a good area to consider. It might also be a great opportunity to clean up your Accounts Receivable. If it has been a long time since you last touched the account, you most likely will need to write those off.

To get the most out of your aged accounts receivable, run an open balance report by insurance and make sure you are concentrating on accounts that are collectable, meaning, you are looking at claims that are still within the filing timeframes. Then, prioritize these claims based on dollar amount, working your highest dollar amounts first. 

• Missing encounters: This is another area that sometimes gets pushed aside when we are overworked and understaffed. Take this opportunity to look for possible missing encounters. Leverage your practice management system to identify missing encounters and track those encounters to make sure they are captured. Also, consider building a custom report if you don’t already have one that marries all post-op visits with a surgery. This way, you can identify possible missing surgeries that were not scheduled in your practice management system.

Another beneficial report covers missing hospital rounds. This report looks for daily treatment continuity to identify possible gaps. For example, if a patient was seen on Monday, Tuesday, Wednesday and Friday, the report would highlight the fact that Thursday is missing.

Self-pay collections: Proactive self-pay collection practices are of growing importance due to high-deductible plans. They are even more important now considering that the pandemic is leaving millions of Americans without health insurance due to unemployment. Take this opportunity to update self-pay policies for uninsured and underinsured patients and consider checking eligibility for every patient at every visit. Also, focus on leveraging technology to facilitate the collection of outstanding balances. Strategies to use include online and mobile payment options, automated credit card deductions for payment plans, estimation tools and automated collection letters and phone calls. 

• Other places to look for money: There are two additional areas I recommend considering:

1. Identify claims where the charge amount equals the payment amount. If the insurance company allowed 100% of what you charged, most likely you are undercharging and are leaving money on the table.
2. Identify claims where the full amount has been adjusted off. It is not unusual to find claims that were automatically adjusted off in error because the practice management system has not been configured appropriately.
   
   For both cases, make sure you audit collectable claims, meaning claims that are still within the appeal filling timeframe.

If you need assistance assessing and implementing the infrastructure to future-proof your revenue, Allscripts revenue cycle management experts can work with your organization.