Authored by: Paul Koes
With an ongoing physician shortage, the supply and demand equation appears to be stacked in a practice’s favor. However, as practices know, this doesn’t mean that revenue challenges don’t exist. With inflation driving up patient expenses and some choosing between paying living expenses and visiting the doctor, it’s critical that practices don’t let revenue slip through the cracks.
Whether your practice is incredibly busy, not as busy as you like, or anywhere in between, fixing weaknesses in your RCM process can help manage the ebbs and flows of economic changes and uncertainty.
RCM processes and understanding the impact on revenue
A recent story highlights a situation that has become common in the current economic environment: A patient facing increased living costs, layoffs and high deductibles chose to skip an annual dermatology skin check due to worries about financial strain. The patient explained it was necessary to prioritize her children’s health needs and decided her own routine care could wait.
A Gallup poll shows a record number of Americans delaying medical care due to cost as inflation began its upward march. As more patients delay care, retaining revenue on services becomes increasingly important for practices. And that starts with evaluating existing RCM processes and identifying opportunities for improvement.
How to improve revenue cycle optimization in any economy
A practice might complete hundreds of procedures and send the related claims to insurers for payment, but it’s unlikely that 100% will get paid. However, the closer your practice gets to 100%, the better. Improving success starts with visibility into key metrics to isolate RCM problem spots.
For example, you might believe your revenue cycle is great, but once you look at your clean claims rate – say, 80% – you realize it could be significantly better. For a practice collecting $1 million per month, that’s a $200,000 revenue loss. If you improved the clean claims rate to 95%, you’d increase revenue by $150,000 per month ($1.8 million per year) without seeing more patients.
If you’re still using paper charts and superbills, you likely don’t have the visibility required to catch revenue leaks, and improving that visibility becomes critically important.
Improving RCM processes and collecting revenue on the spot
In addition to getting visibility into key metrics, you’ll also want to make it easier for patients to pay. If you’re waiting for months to collect a $20 co-payment, that slows down your revenue cycle.
A small amount here and there might not seem significant, but it quickly adds up when spread over hundreds or thousands of patients. Also, with more patients struggling financially, collecting revenue after service isn’t ideal.
For example, a patient might visit your office and owe a $20 co-payment but not pay it because she left her wallet at home. Previously, you might have mailed a paper statement and waited weeks or months to collect it. But digital payment options allow you to send a text message, so the patient can pay once she arrives home, which creates less friction and generates more revenue.
A starting point for collecting more revenue
You can’t change a patient’s financial situation or their decisions about care, but you can tighten up your RCM processes. If you’re looking for a good starting point, know your numbers: What are your clean claims rates? Could they be higher? Do you have a way to measure them? If not, consider adopting a solution that provides that visibility.
With the right solution, you can compare similar periods to prior years. For instance, you might discover that revenue has dropped $150,000 per month from January through June compared to the same period last year. Understanding this data helps you answer the important question: Why?
Once you identify the reason, you can proactively find solutions to help recapture that revenue and improve the health of your practice. And if you need help with this process, contact us, we’re here to assist.