October 2016 brought major changes in the ICD-10, and the freeze is over. Going forward, annual updates to the coding system will be the norm once again. Keeping up with ICD-10 changes will be an ongoing challenge, making RCM even more critical to maintaining and increasing your profitability.
Hospitals and physician practices face a number of challenges in effectively managing the revenue cycle, including:
Patients are becoming more assertive in terms of deciding when and where to receive health services. As a result, health care organizations need to have clear and effective patient access processes in place. New patient registration, insurance verification and accurate billing are more critical than ever before.
Billing and Collection Errors
Billing and collection errors are a large source of lost revenue. This issue is even more critical as the coding schemes change. Improper coding not only delays revenue, but without accurate tracking, payment may never be received.
Collection errors are becoming more common as responsibility for payment changes. Patients are increasingly responsible for more out-of-pocket costs, and insurance providers have a dizzying array of payment levels depending on the policy terms.
Monitoring the Entire Claims Process
It is only possible to catch and correct billing and collection errors when processes are in place to monitor the claims process from beginning to end. Hospitals and physician practices need to invest in technology to track claim metrics and prevent problems.
RCM Action Items
Focus on Staff Training
Every staff member within a health care organization needs to have a working knowledge of patient and insurance payment issues. However, staff members who are directly responsible for managing patient access and coding must understand the importance of the information they deal with.
Getting the right information when a patient is registered lays the groundwork for the entire revenue cycle. In addition, coders need training that will keep them focused on staying accurate even as ICD-10 changes take place.
Establish Clear Patient and Insurance Company Communications
Sensitivity is required to communicate with patients concerning their financial responsibility, but clear upfront communications certainly help. You can pre-register a patient by collecting the information you need to verify their insurance coverage when an appointment is scheduled.
Contact the insurance company to verify the patient’s coverage, and to identify requirements for copayments, coinsurance, deductible amounts and out-of-pocket maximums. Estimate the amount the patient will need to pay and have an open discussion with them about their financial responsibility and the options that are available to them for making payment.
Take Advantage of Technology
Managing the claim process from beginning to end can be a strain on your staff. Use technology wherever possible to improve processing accuracy and reduce the burden on employees.
When you have an automated system in place, be sure to track the critical metrics that will help you troubleshoot your processes and collect all the revenue to which you’re entitled. Important metrics include:
- Insurance company denials – Track the percentage of denials for each insurance company. Work to reduce these percentages by identifying and fixing problems that are causing denials.
- Copays collected when service is provided – Once they leave your facility, the odds of collecting from patients go down precipitously. Accurately estimate patient responsibility and work with patients to process payment at the time of service.
- Collection as a percentage of gross charges – Tracking collection ratios for both patient and insurance company billing will let you know where there are opportunities for improvement.
Operations may be getting easier now that the major updates to ICD-10 have been made, but ongoing changes are inevitable. The time is right to review your revenue cycle management systems to ensure that you’re on the right track moving forward.
If you have questions, we’re here to help. Feel free to get quick answers by submitting your question to Ask the Experts.