‘Revenue leakage’ refers to situations and sources where a healthcare provider has delivered care and services to a patient but does not receive payment either from the payer or the patient. Typically, revenue leakage occurs when accounts receivable (AR) remains unpaid for too long and unintentionally goes unnoticed. Providers cannot afford to ignore revenue leakage in their practice. Even before the effects of COVID-19, some of the US’ top hospitals demonstrated an inability to keep pace with growing expenses and posted losses of hundreds of millions of dollars. Assuming patient and revenues return to expected levels in July 2021, private physicians in the U.S. have lost an estimated $158.35 billion in revenue since the start of the pandemic. In this article, we discussed the top causes of revenue leakage as well as tips on how to avoid revenue leakage in your practice.
According to Effy, a company that leverages big data analysis for healthcare organizations, revenue loss or leakage can be attributed to ten primary causes. We discussed the top four primary revenue leakages causes and resolutions to avoid them:
Most claim denials are due to not properly verifying benefit information prior to services being provided. Eligibility and benefits verification is the first and vital step in the medical billing process. The insurance verification process is crucial for all encounters, whether inpatient, outpatient, all new patients, hospital admissions, high dollar procedures, and any patient with changed insurance coverage. Eligibility verification is the process of checking a patient’s active coverage with the insurance company and verifying the authenticity of their claims. To avoid claim rejection, the verification process must be done at least 2 to 3 days prior to the appointment.
Payers are expanding the number of visit types and procedures that require prior authorization which is leading to an upswing in denials. It is estimated that 80 percent of denied claims have to do with no authorization being obtained, or authorizations being requested improperly. Many payers require authorization for services prior to or within fourteen calendar days of services rendered. Below are a few reasons for any payer wants prior authorization:
To reduce revenue leakage due to the absence of prior authorizations, make prior authorization as part of your eligibility process for every visit, order, procedure, and referral. But most importantly, never be afraid to appeal a payer’s decision. Phone calls to the health plan’s medical director, while time-consuming, can be extremely effective in changing outcomes. Similarly, tracking denials by payer can help your practice identify trends that uncover coverage positions on certain procedures and improper coding practices that can be adjusted.
Sending reminders to payers and patients of outstanding bills costs providers money. Approximately, claims tracking can cost $3.59 and $4.74 per claim and remittance advice. Allowing patients to leave with the expectation of billing them later results in a 20 percent decrease in collections. Making a quick reduction in your outstanding AR could be as simple as making a concerted effort to achieve consistent co-pay collection before patients have left your premises. You can reduce outstanding accounts receivable (AR) by following methods:
Medical coding and billing are complex processes that include patient, payer, and procedure. Even the most diligent medical billing team experiences claim denials. Common billing errors include non-specific coding; missing accurate claim data; timely filling errors; incorrect patient identifiers; submitting duplicate claims; upcoding and unbundling; and not supporting medical necessity. If your team is not well experienced to handle denials due to common errors then all denied claims become the cause of revenue leakage.
If you are suffering from revenue leakage for your practice then consider outsourcing your medical billing and coding functions to MedicalBillersandCoders (MBC). Partnering with MBC allows providers to focus on providing quality patient care while we manage the burden of minimizing losses. We can leverage our experience and analysis of your processes and data to identify the main sources of revenue leakage for your practice. Outsourcing to a revenue cycle management (RCM) company like MBC, could help in minimizing revenue leakage and the associated financial damage. To know more about our medical billing and coding service, please contact us at firstname.lastname@example.org / 888-357-3226Back