Contrary to many opinions, revenue cycle management (RCM) is not solely a function of billing. Furthermore, the two terms, RCM and billing, are not interchangeable. The focus on revenue here devalues the fact that it is a cycle with multiple contributing elements. That said, billing is certainly a core function that could use some help from its supporting cast.
Efforts to optimize RCM as a whole can help with proper data collection, streamlined patient and provider communication, and accurate cash flow reporting. If other groups are operating effectively, does billing itself really need to change?
The answer is yes. Absolutely. Billing errors cost hospitals around $68 billion each year. And the staffing for these critical roles is costly on its own. The time it takes to review and process claims, from patient to insurance company interactions, represents 25-31% of expenses for healthcare providers.
In terms of staffing alone, this comes out to an average annual cost of $99,581 per individual provider. Multiply that by however many healthcare providers are in your system, consider that costs are typically higher in emergency and surgical care settings, and you can see how optimization becomes truly critical.
The Business Impact of Billing Errors Goes Beyond the Bank Account
Administrators and operational leadership would do well to put their billing teams and processes under a microscope. Billing errors, which are rampant at a rate of 75-80%, lead to incorrect patient charges and issues with insurance claims that clearly affect the bottom line. But simply accepting this rate of error would be to leave more than just money on the table.
- Profit Projections: As of 2018, 41% of healthcare system CFOs relied on rolling forecasts, and with 31% planning to implement this, it’s clear that hard numbers are hard to project. This is largely due to delays, denials, and partial payouts when it comes to payers. And it hinders the ability to accurately assess financial health or make well-founded business decisions.
- Insurance Conflict: Constant or consistent discrepancies will make payers think twice about their relationships with health systems or specific providers. Frequent issues can lead to providers being flagged as repeat offenders and placed under fraud scrutiny. Even unintentional fraudulent billing errors can create conflicts, drain internal resources, and undermine efficiency and revenue.
- Patient Credibility: No one likes to receive a bill they didn’t expect, let alone someone who just went through a painful or overwhelming medical procedure. Mistakes in patient billing can impact health system credibility with the patients themselves, who have more options than ever before for their healthcare. Subpar patient/customer experiences can cause them to look elsewhere in the future, affecting repeat business and word of mouth reputation.
Targeting Micro-Processes to Eliminate Billing Errors
When evaluating how to optimize billing itself, it’s important to break the concept down into its constituent parts. Billing as a component of RCM as sub-components of its own. The full responsibility for billing errors cannot be placed on the teams submitting the actual claims or invoices to payers (although this is certainly part of it). Isolating breakdowns in accuracy and efficiency throughout the billing lifecycle can lead to more precise improvements in RCM as a whole.
Patient Intake Experience
Not only does this warrant examination to provide a positive patient/customer experience, but intake is also the starting point for billing. It is here that patients submit payer details that are used by billing once the visit or service has concluded. Using technology solutions or outsourced teams to verify these details before providing care can eliminate errors before they make it to billing staff.
Provider POC Solutions
Billing teams may need to review provider notes and diagnosis details to verify a billing claim. But these particulars can often be found lacking. Implementing a point of care system can simplify provider input with required fields, validation errors, and streamlined communication where clarification is needed.
Identify Data Discrepancies
An RCM system or outsourced RCM staffing can help put a second (or third) set of eyes on the data collected from the start. If patient details don’t match up, you can have a process that alerts tactical billing staff to investigate before a claim is submitted. Triggers can also warn of duplicate claim submissions before they occur, preserving credibility with payers in this regard.
In larger health systems, billing teams may not have the time to triple check every code. From an operational level, leaders can analyze claims, including denial volume and reasons to look for submission trends. This, in turn, can lead to ideas for training opportunities, better EMR integration, or intake process changes.
Healthcare providers also run into billing and payment delays when it comes to patients as payers. With an average 30-day lag between service and payment, offering options for real-time payment can bring revenue in more accurately and reliably. The new normal of online check-in, patient portal access, mobile alerts, and telehealth have helped pave the way for integrated payment methods for patient responsibilities.
The majority of these micro-processes depend on technologies and teams that provide higher returns on investment. Critical to all of this is CFO and leadership analysis of existing workflows, programs, and gaps in billing tasks. Consultants and software solution partners can offer insights and hybrid automated and manual approaches that get the most out of all available resources.
Changes to billing tactics must also remain agile. Whether implementing a new RCM platform or retraining existing staff, everyone involved must stay abreast of changes in payer rules, forms, requirements, and accepted methods. Dedicating resources for this change management or relying on outsourced billing management can help you remain current with billing solutions where they intersect various aspects of the RCM ecosystem.
Revenue cycle management takes on added layers of complexity for healthcare systems based on size, location, and demographics. The experts at GeBBS understand the nuances of RCM and insurance billing and provide a blend of technology solutions and outsourced staffing to help clients optimize precise aspects of their billing processes. This way, CFOs and administrators can have confidence in error mitigation that reduces claim denials and time to receive payment. Contact GeBBS Healthcare Solutions today for a RCM consultation specific to your organization.