Know Your Numbers: Improving Financial Health through Revenue Cycle Management

At a glance

• The main takeaway: Within the medical profession, “revenue cycle” is a term that describes the many processes and touchpoints between initial patient registration and final settlement (payment) for care rendered.
• Impact on your business: A well-established RCM fosters the complete, accurate, and compliant submission and payment of services.
• Next steps: Aprio’s Healthcare Advisors offers specialized CPA and advisory services tailored to the healthcare industry, and we are here to help you achieve your business objectives.

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The full story:

For healthcare organizations, Revenue Cycle Management (RCM) is an important step in managing the entire lifecycle of a patient’s account. The process starts from patient registration to final payment settlement. And as the medical industry continues to get busier, one of the top concerns is viability. Historically, a full patient schedule was a reliable forecaster of practice prosperity; however, practices have been absorbing expense increases, payor reimbursement decreases for years, and many are now at a breaking point.

A well-established RCM fosters the complete, accurate, and compliant submission and payment of services. It masters the best processes, puts the right people in the right roles, provides verified training and resources, maintains current and accurate patient and insurance information, and advocates for the right payment levels.

Some processes might be difficult to accomplish and sustain, so, let’s break down the important areas of RCM to get it right.

Front End RCM | Processes before a patient receives care

Tasks	What’s Important to Get Right?
Personnel Placement	Consider front end roles as gatekeepers to correct claim submission and payment Attention to detail and task subject matter knowledge is critical Hire and compensate for accordingly
Patient Registration	Obtain the complete and accurate capture of demographic and insurance information before every visit/scheduled service Consider providing patients the current information on file and asking them to only update changes
Appointment Scheduling	Should align with available practitioners and support staff Consider self-scheduling software to promote patient ownership, reduce no-shows Send visit reminders (not too many to be frustrating or ignored) Create a cancellation list with advance notice requirements Track no-show rates and consider overlapped scheduling for high-rate patients
Prior Authorization	Create a list of procedures and payors that routinely require prior authorization Inquire about and obtain required insurance approvals as a function of the scheduling process
Patient Responsibility	Promote payment compliance by informing patients at the point of scheduling and/or service on anticipated amounts they may/will personally owe, payment policies and eligible payment plan options

MIDDLE RCM | Processes that merge the financial and clinical aspects of care

Tasks	What’s Important to Get Right?
Personnel Placement	Task subject matter knowledge is critical Consider well-vetted or credentialed coders (e.g., CPC, CCS, CMC) for complex services, provider specialties or payors
Charge Capture	Identify all services rendered (including noncovered services) to track resource needs and guarantee proper payment levels Mitigate revenue leakage through routine documentation audits for missed charges; educate on meaningful findings
Coding	Services are paid only at the level they are documented and coded so routinely audit for same; educate on meaningful findings Inaccurate coding can result in rejected and denied claims; consider adding scrubbing tools to catch problem areas prior to submission (e.g., prohibit inaccurate code combinations, requisite modifier use)
Claim Submission	Consider billing software that submit claims quickly via standardized series of prescribed steps (i.e., mitigates human shortcuts and errors)

BACK-END RCM | Processes after the claim has been submitted

Tasks	What’s Important to Get Right?
Denial Management	Staff knowledge of payor-specific points of contact and billing requirements is key; consider assigning billing staff by payor not provider to promote depth not width in this area Learn from your denials (analyze, categorize, train on patterns and adjust middle RCM processes to mitigate) Create custom tracking codes to post any post-payment denials at the claim level since original remittance advice and denials reporting will not include these claims or related reason codes
Appeals	Appeal promptly, clearly and concisely to demonstrate resolution of all denial reasons Consider practice cost to appeal to guarantee net positive result Consider larger strategy where warranted (e.g., an addiction treatment provider might negotiate higher frequency drug test coverage by showing metrics on successful patient outcomes)
Coding	Services are paid only at the level they are documented and coded so routinely audit for same; educate on meaningful findings Inaccurate coding can result in rejected and denied claims; consider adding scrubbing tools to catch problem areas prior to submission (e.g., prohibit inaccurate code combinations, requisite modifier use)
Adjustment Posting	Track claim adjustment reason codes (CARCs); validate material amounts or patterns that result in unexpected or avoidable non-payment Create detailed, meaningful non-contractual adjustment categories that inform on non-payment reasons Make necessary process changes for material and unexpected patterns (e.g., adjusting off charges covered by a research grant is expected, adjusting off charges for lacking a required prior authorization or coding error is not)
Payment Posting	Implement internal controls when automating payment posting to quickly identify and report erroneous amounts Maintain a standard, written procedure for manual posting steps to guarantee accuracy Perform regular audits of expected vs actual payment amounts; promptly follow up on discrepancies Track aging and reason for unapplied payments
Secondary Claim Submission	Automate conversion steps where primary and secondary payor requirements are different (e.g., bilateral use of modifier -50 vs -RT/-LT)
Patient Statements	Web-based payment options are preferred by patients and result in faster, better A/R resolution
Credit Balances	Proper management and refund of credit balances is critical for regulatory compliance and revenue cycle integrity
A/R Follow-Up	Consider patient satisfaction when developing the manner and frequency of follow-up A dedicated, approachable person in this role can promote timely, more complete resolution Consider empowering A/R follow-up staff to inform on and approve patient payment plans within defined parameters Consider lower payment amounts more often (e.g., $25 every two weeks vs $50 per month)
General	Keep a paper trail for any payor communications, including payor point of contact and next steps (email or call notes); retain for quick recall

The bottom line

Revenue cycle management has a host of tasks that can be unpredictable, inconsistent, and ever-changing. We hope the tips shared are helpful in building, refining, and supporting successful, profitable RCM at your practice. Be on the lookout for Part II of this article, “Proven Metrics to Monitor RCM Effectiveness.” Aprio’s Healthcare Advisors offers specialized CPA and advisory services tailored to the healthcare industry, and we are here to help you achieve your business objectives.