The revenue cycle used to be a cycle, not a maze. Today, it’s a critical aspect of every practice that needs insightful and careful management. Collecting the amount you’re owed, and doing so in a reasonable amount of time is imperative for the survival of your medical practice. If the revenue cycle maze has you lost, consider these ways to stop cash outflows before they drain.
Conduct monthly financial meetings. Although a postmortem, it is still important to bring physicians, administrators, and managers to the table for a monthly meeting to go over practice finances. It’s not easy, but to keep things on track, create (and stick to) an agenda that includes profit and loss statements, internal and external benchmarks, and any other financial information that’s relevant. your business.
Prioritize practice metrics. Practices can measure various aspects of performance and compare them to other practices. The metrics that deserve the most attention depend on the practice, but they can include monthly/quarterly patient collections or third-party payment rates.
Use appropriate benchmarking. The industry benchmarks you use should be those of peers in identical groups. Discuss any potential warning signs of poor performance, and formulate a performance improvement plan if needed.
Track reimbursement. Measure rates of reimbursement for your office’s most-performed procedures or services, and check CPT codes by payer.
Know your fee schedules. Spot-check explanation of benefits and electronic remittance advice to see if payers are reimbursing your practice properly for contracted amounts. Train billing personnel to review records to catch inaccurate payer reimbursements early.
Consider involving the experts. Should you keep revenue cycle tasks in-house or contract with a revenue cycle management vendor? Every practice must carefully weigh the pros and cons. There are multiple items to consider, including the practice’s size, patient base, and the staff capabilities.
Review every component. In addition to payer contracts, take a close look at patient scheduling, the registration process, coding and capturing charges, patient and insurer billing, and accounts receivable.
Medical practices, like any business or service organization, must produce income that exceeds expenses—preferably on a somewhat predictable cycle. This is the “management” component that drives the cycle.
