June 10, 2015
The revenue cycle management plays a big role in the well-being of a physician’s practice or a hospital. Reimbursement cuts and stringent compliance rules have made it difficult for independent and hospital employed physicians to maintain a continuous flow of money and grow revenue. Understanding the technicalities of billing and coding and its impact on revenue is crucial. The level of financial expertise required is most of the times not available in-house.
There are a growing number of physicians and hospitals that witness negative profit margins, decline in methods of reimbursements as payers make a shift from fee for service to value based reimbursement and growing risk under accountable care models.
A recent study has shown that about 200 million claims get rejected every year for untold reasons. Approximately 10-15% of the medical practice revenue goes uncollected. On the basis of the AMA analysis, denied, rejected and underpaid claims can cost as much as $100,000 every month and is speculated that the ICD 10 implementation will significantly increase the rates of claim denial. Primary concerns of physicians are lack of AR management, ICD 10 and denials.
Lack of AR Management Strategy-
Accounts Receivable is the total amount of money owed to a practice which has not yet been paid for. This is an indicator of the deteriorating economic structure of the practice. The following points are important in order to assess the AR management. Any of the information missing shows a lack of receivables management.
Monthly charges- The total amount of fees charged from first working day through last working day of a month are the charges for the month.
Monthly receipts- A receipt must correspond with the charges that were entered for the current month.
Total AR at the end of month- This is the balance that is due on the last day of practice. Ideally the total AR should be the amount of money that can be collected eventually.
Denials and Appeals
As mentioned above, around 200 million claims are rejected every year, and so there are various ways in which these can be cleared, of which he most important is to keep reapplying. On being denied, the first step is to find out the reason for denial after which appropriate steps can be taken. However, following up the denials, making them go through can almost all the time prove to be a tedious and a long procedure.
According to a research, it is affirmed that denials end up costing almost 3% of the total revenue of the physician.
ICD 10 Integration
Transition from ICD 9 to ICD 10 works in coordination with the aim of healthcare which is to improvise on the quality of healthcare and make it cost effective. Physicians practice will be impacted in every way and will be challenging although if received proper training, it comes with an array of benefits ranging from appropriate reimbursements to reduced claim denials. Code mapping for ICD-10 should not hamper your revenue and nor should the EHR system that is compatible with ICD-10 codes.
A systematic streamlining of procedures can be applied for resolving concerns of the doctors and this can be achieved by partnering it to billing companies which can certainly help in managing your revenue cycles, leaving you focusing on only your profession.
Revenue Cycle Management