7 Ways to Improve Your Revenue Cycle

Margaret Dowling, vice president and product team manager for PNC Healthcare, a division of PNC Bank, National Association, discusses seven processes providers can implement to increase revenues at various points in the revenue cycle.

Admission and eligibility

1. Use a checklist to ensure proper registration.
The beginning of the revenue cycle presents several opportunities for financial growth. According to Ms. Dowling, eligibility and claim status have a current electronic utilization of 40 percent, meaning healthcare providers have a "huge opportunity" to reduce the 20 percent of claims that are rejected due to bad eligibility, patient not found or service not authorized. "The best practice that a provider should implement in admission and eligibility should be a checklist in registration for every patient encounter," she says. "The person registering the patient should photocopy the insurance card, review the insurance and verify patient information, identity and contract information at registration. There's so much flux with insurance changes that it's amazing to me personally when I visit my doctor and they don't verify that I have the same coverage."

2. Practice pre-admission contact.
For elective or scheduled procedures, Ms. Dowling says many providers are moving toward a pre-admission or pre-service contact, where the patient is contacted prior to service. During this contact, the patient can update any out-of-date information and make a plan for paying his or her co-pay, if applicable. "When you reach out and call the patient, you can say, 'You're going to have a co-pay. How would you like to pay that?'" She says at this point, the staff member can offer the patient the option of paying with a credit card now, paying when he or she arrives at the hospital or setting up a payment plan.

3. Establish a retail mindset.
In order to collect payment without damaging patient relationships, Ms. Dowling recommends providers take a cue from the retail industry. This might include sending patients more information on the upcoming procedure and their payment expectations, offering a lollipop when asking for a co-pay or putting up a sign that lets patients know they can pay with a credit card.

She says providers should also establish payment collection as a routine part of the registration workflow. The physical set-up of patient registration can assist in this process. "My doctor is part of a large academic medical practice, and they have the registration set up physically so before you can go and register, you have to go past the payment desk," she says. "They take your card and collect your co-pay, and they've actually established a physical process."

She says many providers hurt themselves by failing to offer different ways to pay. For example, a hospital might not take every credit card, meaning some patients are unable to pay even if they want to. The hospital might also have equipment to authorize payment in the regular registration area, but not in the registration area for a lab procedure. She says technology can also be a barrier. "Credit card terminals have a lot of different settings on them, so very often, providers don't understand how to use the technology," she says. "I've seen situations where the terminals can be set to settle automatically … and providers don't realize [they can do that], so the payments just sit there."

Claims submission

4. Incorporate ongoing review into the claims scrubs process. There are several major reasons for claims denials. According to a 2006 PNC e-Health study, payors' reasons for denying claims included patient ineligibility, incomplete patient or plan information, missing supplemental attachments, incomplete service information, duplicate claims, claims submitted to the wrong payor and coding errors. All these mistakes can be fixed relatively easily with some oversight of claims submission. "You really want to look at a payment when it comes back if it's a partial pay or a zero pay," she says. "If a bunch of claims come back denied because they're missing medical record information, [for example], go back to the medical records department [and find of why]."

Denial management

5. Regularly examine contracts with major payors. Most providers have contracts with major payors that include prices for different services. "It happens fairly often that [providers] do not get paid according to the contract," says Ms. Dowling. Whether your payment is suffering because you billed the payor incorrectly or the payor made a mistake, you should review both situations to find out where the problem lies.

Obviously contract review is time-consuming, so Ms. Dowling recommends looking at major payment discrepancies immediately and conducting reviews on smaller payment problems on a regular basis. "If it's a really big item and I was in the hospital for weeks and the provider sent out a $100,000 claim but the payor only paid $10,000, that's going to get attention immediately," she says. "But an area of opportunity is smaller discrepancies." She says she hears a lot of providers say, "If [the discrepancy] is under $10, we just write it off." Unfortunately, those $10 discrepancies add up to a significant loss over time.

If your facility has a contract with a payor, Ms. Dowling recommends bringing up discrepancies during contract review or periodic payor status meetings. She says one of her clients holds a lunch meeting once a quarter with his major payors where he sits down and talks about the denials he's seeing. "When he has contract negotiations, he includes denial rates in those negotiations and says, 'You've routinely denied five percent of claims, so I need to be paid more under my contract because this is the cost of doing business with you,'" she says.  

Remittance and payment management

6. Ask payors to send remittances and payments electronically. Around 46 percent of claim remittances are sent electronically, and only around 10 percent of payments are sent electronically. "There's a huge area of opportunity to receive electronic payments," Ms. Dowling says. "This doesn't happen for two reasons: sometimes payors don't have a great way of originating payments, and sometimes they have two separate systems — one for claims adjudication and one for creating electronic payments — and those systems may not talk." For these reasons, she says payors are not aggressive about offering electronic payments, so you may have to request the service.

She says electronic remittances may also not be as detailed as paper remittances, and the industry is currently discussing how to close the gap between the detail of paper remittances and the convenience of electronic remittances.

7. Match electronic remittances with payments. Going forward, Ms. Dowling says providers must find a better way to match electronic remittances with payments, which don't always correspond one-to-one. "Payors will send bulk payments, which may include payments for five different electronic remittances," she says. At many of her clients' facilities, the matching is organized in a spreadsheet and matched manually. "They don't want to post the electronic remittances before they get paid," she says. "You don't want to update your A/R without having cash in the bank, and there are very few systems that allow an automated match between remittances and payments."

Your facility should be vigilant about researching potential systems that allow automated matching. In the meantime, make sure your remittances are matched accurately with your payments.

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