Addressing chronic problems in revenue cycle

Every employee contributes to the success, failure of billing and collecting.

By John Williamson

Providers continue to suffer from chronic problems in the management of their revenue cycle processes. Office managers and revenue cycle directors are under intense pressure to maintain revenue in the face of increasing challenges from payers. The battle to get paid has never been as costly as it is today.

Many providers have chosen to outsource much of their billing department, while others continue to rely on key staff to keep the revenue engine running. Both management strategies are facing declining reimbursements and the issues must be combatted collaboratively across the organization.

Source of Problem

Most of the problems come down to workflow, or the lack thereof. The reality is that every employee in a physician practice or health system contributes to the success or failure of billing and collecting payment. All too often the blame is placed on the billing and accounts receivable staff members, when the issues exist upstream.

The smartest approach to making the right changes in your practice is to reverse engineer the problem. The following approach can focus your efforts.

Denials: Start by assessing the types of denials you have received over the last 12 months. Organize them by payer, then by denial type, and rank by financial impact. Ignore the bottom 20 percent of the list.

Contracts: After you have organized your denials, gather your payer contracts and fee schedules. Look at the allowable amounts for your top procedure codes and verify that the reimbursement rate matches the contracted amount. Compare the top denial reasons to contractual terms. Record any accounts with an underpayment or invalid denial reason. These issues can be taken to your payer representative in bulk for resolution.

Coding: Combinations of diagnosis codes, procedures, modifiers, place of service and rendering provider can all affect your payment. Look at the denial reasons by payer with the contract in hand to identify issues that can be resolved by changing the way claims are coded. Sometimes these issues can be fixed during the billing process, but other changes need to be instituted by the rendering physician.

Attachments: Not every claim can be paid with a single submission of an electronic claim. Look for issues where claims have been pended by the payer, especially when additional documentation has been requested. Processes should be put in place when billing payers with specific diagnosis codes and procedures that result in documentation requests. You will still want to bill the electronic claim, but you should send a paper claim with the appropriate attachment either at the same time or two weeks after submission. You should not have to wait for a denial to submit the appropriate attachments.

Registration: Eligibility, benefits and prior authorizations are major issues for most providers. It should be the responsibility of the front office staff to follow through with confirming each of these items before the patient is seen. Looking at the related denials should give you guidance on which payers and plans to focus on. The best practice is to use a combination of online eligibility tools and phone calls to the authorization department before the scheduled date of service. When using online tools, be sure that you can see the specific type of benefit required, as not every software vendor displays a comprehensive list of benefits.

Credentialing: With the complexity of state licensing and payer enrollment procedures, issues with credentialing providers can create major problems if left unattended. The very first credentialing-related denial should trigger immediate response and redirecting of patients accordingly. The individual provider should be aware of the issue and responsible for submitting necessary paperwork before seeing any additional patients from the affected payers.

Appeals: Far too often, when a claim isn’t paid the first time, the charge is either written off or the patient is billed the full amount. This results in a significant amount of unnecessary revenue leakage and ill will from patients. Most major payers allow an initial appeal to be submitted through their website, followed by a paper appeal. When filing a paper appeal, be sure to use the form supplied by the payer. Based on your most commonly appealed items, standard appeal response letters can be used. It is especially effective to include relevant contract terms in your appeal letter. For recurring issues, a formal complaint through your payer representative may be an effective approach to preventing ongoing invalid denials.

There is no getting around the hard work required to improve your revenue cycle processes. If you are managing your own billing department, you already have the necessary staff to systematically work through the issues costing the practice the most revenue.

If you are outsourcing your billing processes, it is time to collaborate with the vendor to address issues in the practice and ensure that the collective organization is learning from what is going wrong to improve the outcome. Just as patients are expected to manage their chronic conditions, providers need to manage the chronic problems in their revenue cycle.

-John Williamson is founder and CEO of RCM Brain Inc. in Louisville, Ky.