Revenue cycle management is the foundation for a successful medical practice. Without a profitable and organized management structure, a practice can lose thousands – if not tens of thousands – of dollars a year in lost earnings.
Having healthy revenue cycle management means knowing how to avoid and mitigate a lot of common problems with managing revenue. These problems are widespread and can happen to any practice if you’re not careful.
Here are three common revenue cycle management problems that your practice can avoid and overcome to improve the practice’s revenue.
Lagging – or No – A/R Follow Up
One major problem that occurs to many practices is difficulty with following up with accounts receivable.
A/R is the lifeblood of a practice. Without efficient A/R, the practice doesn’t get paid. Unfortunately, following up with A/R and collecting from accounts either lags behind in many cases or just doesn’t happen. This results in backlogs and high volumes of outstanding A/R, which is money that should be going into bank accounts but isn’t.
A/R follow up needs to be timely, consistent, and punctual. There needs to be a system of accountability in place that ensures the practice follows up in a rigorous manner with A/R, in order to collect what is owed and reduce outstanding balances.
If your practice has consistently-high volumes of outstanding balances, your follow up with A/R and collections could be to blame.
Inaccurate Coding and Billing
Inaccuracy in coding and billing costs practices across the nation hundreds of thousands – if not millions – of dollars per year.
This will be especially true now that ICD-10 has been implemented. Inaccuracies result in denied claims and delayed payments, which both cut into revenue cycle management efficiency. This is often the result of poor staff training and education, or perhaps entrusting coding and billing to overworked internal staff.
Inconsistency in Processes
Another problem that emerges with revenue cycle management is inconsistency in processes. This can include anything from capturing patient data to filing a claim, communicating with patients, and more. Some of this can lead to higher claim denial rates, which costs a practice revenue.
- Is the practice getting paid quickly?
- Are co-pays being collected consistently?
- Is your denial rate unsustainably high?
Inconsistency in processes and how the practice is run from a billing and revenue management perspective can lead to negative answers for those questions. That, ultimately, contributes to poor revenue cycle management that eats into revenue.
Outsourcing Revenue Cycle Management
To avoid these problems and others we haven’t talked about but are very prevalent, consider outsourcing your revenue cycle management to trained professionals who are skilled at managing revenue for medical practices and have the experience necessary to navigate problem areas and resolve them with proactive solutions.
Talk with Medical Business Management today for more information on revenue cycle management and how outsourcing can solve your problems today.