Here are three important questions to ask to discover the cause of a practice’s revenue shortfalls.
If your practice were your patient with a chief complaint of shrinking profitability, how would you improve its financial health?
At first glance, you may attribute the symptoms to repercussions of the Affordable Care Act and other increased regulations, or the overall decline in reimbursements from payers. But in assuming your financial issues are out of your control, you could be ignoring a significant underlying issue.
The true answers to the cause of your financial pains might be your revenue cycle processes— you may just not be asking yourself the right questions.
Do you know what your payers are paying? “I once talked to an orthopedic group that was being underpaid for a common injection they billed for quite often, which resulted in a loss of hundreds of thousands of dollars each year,” said Leighton Noel, regional field RCM specialist, “all because of a processing error.”
To bill accurately and collect what you’re owed, practices must frequently research changing payer rules, update fee schedules, and ensure payers are reimbursing the correct amounts.
Are you collecting from your patients? As unpredictable as insurance payers may be, they’re not the worst of the offenders. “Believe it or not, patients are much more unreliable payers than insurance companies,” Leighton said.
With the rise of high-deductible insurance plans, patients will more often be responsible for payments, but practices who are used to traditional billing don’t always successfully collect what they’re owed. And once patients leave the office, they’re much less likely to pay—which isn’t all that surprising, considering only 32 percent of patients who owe money receive a collection letter.
When’s the last time you tackled your claims denial backlog? “Some practices have a backlog of denials that has been sitting out there for 90-plus days,” Leighton revealed. And it’s likely they’ll never get to them. Almost 20 percent of claims are denied annually—and 65 percent of those denials are never worked.
These questions can reveal a problem common in physician practices. “Historically, billing has always been a back-office function,” Leighton said. “Physicians and other practice administrators don’t have insight into any errors that the coding staff is making, and they’re not always alerted to cash flow problems.”
To address financial issues proactively, many practices turn to professional revenue cycle management services.
This article is reprinted from Greenway Health’s blog. Learn more about Greenway Health.