In our previous blog, we have read why it was critical to have an efficient claims processing system to help improve profitability for medical services rendered. To ensure that the cash inflow is seamless, an efficient and effective revenue cycle management (RCM) process is vital. Whether the medical practice is large or small, with the focus on reimbursements being channeled into the Value-Based Performance mode of payment as against the earlier Fee-for-Service, it is very vital today for healthcare practitioners to focus on their core practice- the health of their patients.
Many healthcare practitioners are looking to outsource the administration and operations department to cut overheads and the perennial problem of keeping updated with the constant changes in healthcare rules and regulations and dealing with payers whose rules are not always similar. Many of the healthcare practitioners have voiced that if their billing/revenue cycle was managed by a professional billing company, there are 5 important things that will immediately help them concentrate on their core job.
Let’s see here what the 5 good things listed would help them bring back the declining revenue:
1. Staff Absenteeism will go down:
this is most crucial especially the front desk which helps fill in the forms with their details. Others who verify and check the eligibility of the patient’s insurance coverage. If even one person is absent, errors can creep in. But if outsourced, there is always a replacement brought in even at the last minute and moreover, if the vendor will provide verification of the claim’s status within 48 hours, is definitely a good start to get the cash rolling in.
2. Minimal Investment in administrative & operational expenses:
Investment in hardware and software together is the most expensive expense that medical practices face, besides the investment in medical equipment. Given the new regulations and changes, and the insistence on Electronic Health Record (EHR) maintenance and the online reports to be submitted, coding & modifier updates, practice management processes, and claims management process, all of which require investment in hardware and constant updates in software.
If they outsource certain sections, then the constant expenses and the training of staff will also be reduced, and thereby using the extra cash inflows to invest in the medical equipment to improve their practice.
3. Reduction in Need for Regular Staff Training:
Even if it’s only a day in training, the expenses made to meet this outgoing is heavy on the financial budget. Nobody to replace the staff for the day and the regular expense of sending them to be updated about new changes in medical billing & coding due to healthcare regulations is an administrative and operational burden. Outsourcing will help optimize their clinical workflow.
4. Noticeable decrease in Claim denials and/or Rejections:
When a third party takes over the medical coding & billing process, then vigilance improves, given that their payment will be based on bringing in claim reimbursements as per the days. The higher our cash inflows, the higher will be their percentage of payment.
So it is beneficial and a win-win for both parties, and hence outsourcing the medical billing and coding, and the claims management process, will help physicians to focus on their clinical performance rather than an administrative performance, and the result will be an improvement in the practices’ net collection ratio, reduction in days in accounts receivable (A/R) and increase in the per-encounter reimbursement.
A company that claims to provide at least 95 percent of the medical claims in the first 120 days of managing the revenue cycle will indeed be a welcome break.
5. Improvement in Meeting Healthcare Compliance’s:
Due to the administrative and operational burden, especially with the need to be compliant with the audit and fraud prevention programs being conducted by the federal governments and quality control organizations, it is very essential that the billing process & documentation be kept as per requirement. Inconsistencies, if prevalent, can be dealt with the third-party vendor who can do the collation and collection of documentation required, so that healthcare practitioners can continue to go about doing their core tasks – improving the health of the patient.
Thus, good medical billing services will not only increase the collection rate, reduce rejections and denials, but help to even provide analysis of the Accounts Receivable (A/R). All this will help physicians to generate on-demand reports, and at the end of the day, help views the day-to-day finances.
Thus, without allocating one’s own staff to the arduous tasks of coding and billing, the practice will be able to still generate cash inflows as the staff will be spared of the burden of administrative overheads and concentrate on the patients more.
