A revenue cycle assessment isn't just a checkbox on a to-do list. It's a vital examination of your practice's financial health, akin to how annual physicals are crucial for patient wellness. Neglect it, and you risk inefficiencies, lost revenue, and, ultimately, a weakened bottom line. So, what’s the best way to dissect and diagnose your revenue cycle?
Define the Scope
First, decide what you’re assessing. Are you looking at the entire revenue cycle, from patient scheduling to collections? Or is the focus on specific pain points, like denials or A/R days? Clarity here sets the stage for a meaningful assessment. A practice with 10 locations might face different challenges than one with 50, and your scope should reflect that.
Gather Relevant Data
Data is your diagnostic tool—so gather it smartly. Pull reports from your EHR and billing systems, focusing on KPIs like denial rates, A/R days, and first-pass resolution rates. Make sure you're comparing apples to apples. A denial rate of 10% might seem manageable until you realize it's concentrated in high-dollar codes like 99213 or 99214.
Don't forget payer-specific data. Some payers love to dance around claims with endless requests for additional information (hello, UnitedHealthcare). Knowing which payers contribute most to your denials can help target your efforts.
Engage Your Team
Bring in the billing team, RCM directors, and even front-desk staff. These are the people who interact with the system daily—and they know its quirks firsthand. Ever been on hold with a payer for 45 minutes only to be told you need a different department? Your team has. Use their insights to identify common bottlenecks and frustrations.
But don't just listen—act. If your front-desk staff indicates that insurance verification is causing delays at check-in, that's a red flag. Ignoring it could mean more denials down the road.
Analyze Denials
Denials can be a gold mine of information. Sort them by reason code and payer. Look for trends. Are you facing a lot of CO-50 (not medically necessary) denials? This might indicate a documentation issue—or a need to negotiate payer policies more effectively.
Drill down into root causes. Is it poor coding or lack of pre-authorization? Or maybe it's a systemic issue with a specific payer's policy updates not being communicated effectively. Quantify the impact. Even a modest 5% reduction in denials can translate to tens of thousands of dollars in revenue.
Examine A/R Aging
Look at your accounts receivable aging report like a detective analyzing a crime scene. Focus on claims over 90 days old—these are the most likely to turn into bad debt. Identify patterns. Are certain codes or services routinely stuck in limbo? Or do some payers consistently push you past 60 days?
Consider your follow-up processes. Is your team equipped with the right tools to effectively pursue old claims? If your billers are spending 30% of their time chasing the same types of issues over and over, it's time to reassess priorities and procedures.
Review Patient Collections
Patient responsibility has become a notable source of revenue—and frustration. High-deductible plans mean patients owe more, and collecting from them is often more complex than dealing with payers. Review your current patient statements and payment plans. Are they clear? Do they make it easy for patients to pay online?
Survey your front office staff on their interactions with patients about financial responsibility. Often, a simple script adjustment can make a big difference in collections. If patients aren’t clear about what they owe, it's an internal communication issue.
Assess Technology Utilization
Is your technology working for you or against you? Examine your practice management and billing systems. Are they integrated smoothly, or is data entry a manual, error-prone process? If you're not using automated eligibility checks, for instance—why not? Automation can free up your staff to handle more complex issues rather than being bogged down with data entry.
Check if your EHR updates are keeping pace with payer policy changes. Outdated systems can inadvertently lead to increased denials or non-compliance issues.
Implement and Monitor Changes
An assessment is only as good as the actions it prompts. Once you've identified areas for improvement, implement changes methodically. Prioritize based on impact and ease of implementation. Tackle low-hanging fruit first.
But don’t stop there—monitor the results. Set up regular follow-ups to assess the impact of changes. Did denial rates drop? Are A/R days improving? Look at the data quarterly to ensure improvements are sustained.
Continuous Improvement
The revenue cycle isn't a "fix it and forget it" process. Continuous improvement should be embedded into your practice's DNA. Encourage ongoing feedback from your team and keep an eye on industry trends and payer policy updates. Regular assessments should become a routine part of your operational strategy.
The takeaway? A thorough revenue cycle assessment can uncover hidden inefficiencies and revenue opportunities. By following these steps, practices can position themselves better financially and operationally. Facing the facts head-on, making informed changes, and keeping the cycle healthy—this is how practices succeed.
Related Articles
