November 2, 2018
Written by: Scott Williamson
The efficiency of an O&P practice’s billing operations has a critical impact on financial performance and optimizing that is a key component of revenue cycle management (RCM). RCM is the core financial process of any healthcare organization. Healthcare practices, hospitals and labs all need to establish an efficient and effective RCM process if they want to survive and turn a profit. But what is RCM exactly?
Beyond just tracking a claim, your revenue cycle encompasses all the steps from when a patient first makes an appointment to the time when there is no longer a balance on that person’s account. It includes front-end office tasks like appointment scheduling and insurance eligibility verification; tasks related to clinical care like coding and documenting; and back office tasks like claims submission, payment posting, statement processing and the management of denied claims. The extent to which your practice has a handle on these steps directly impacts your ability to get paid the full amount you are owed as quickly as possible.
At OPIE Choice, we have spent a lot of time working on the internal drivers in our MasterMind™ programs and the lessons learned are now being taught at OPIE Con and blogged about here. Now we know the typical practice is less effective when it comes to managing external revenue drivers, including payer reimbursements, patient payments and collections. Unfortunately, the odds of being optimal in these areas are stacked against you because the way we bill for services lends itself to lengthy payment cycles. Very few claims are processed at the point of service, but instead are bounced around at the payers over months, if not longer – before finally either being collected or written off by the practice.
By focusing on your payments and collections, you can optimize your revenue cycle and have a healthier cash flow. Because third-party claims reimbursement comprises the bulk of the receivables in most practices, the speed and efficiency in which you turn claims into cash can determine whether or not your practice thrives. At the “Fundamentals of Excellence” conference next week, we are focusing on the tools and the processes that will help you get a handle on your RCM.
Here’s how the process generally works from start to finish:
- Eligibility verification: A patient arrives at a practice. Their insurance eligibility is verified, and essential patient information is recorded in your OPIE or Futura electronic health record (EHR) system.
- Charge capture and coding: The patient receives the practice’s services. The visit is coded into a bill using HCPCS coding standards.
- Patient collections: The patient pays any deductible amount due prior to leaving the practice.
- Claims submission: The coded bill is sent to the appropriate payer, typically through a clearinghouse. Many times, billing departments will have to follow up to ensure a payer’s timely response.
- Reimbursement: After the payer has reviewed the claims, they will determine how much the provider receives based on the patient’s coverage. Sometimes, claims will be denied for coding errors, incomplete patient data or other reasons.
- Denial management: When a claim is denied, billing departments make the appropriate changes and resubmit the claim. This involves scrubbing for coding errors, reviewing patient data and working with the payer directly.
- Patient collections:If a patient received services for which they are not covered, providers need to send them an additional statement for the services rendered. Billing departments will need to continue to follow up on patient statements until the outstanding balance is paid.
Your reimbursements on claims filed and the money paid out of pocket by patients are the basis of your revenue cycle. The extent to which you effectively manage your payment processes and have a handle on collecting payments that are past due is an indicator of your practice’s financial health. While this makes sense intuitively, actual execution of effective revenue cycle management is a challenge to the average practice owner. Not only is the U.S. health care payment system designed to work against you, but you may otherwise lack the time, expertise or internal systems to ensure that you get paid the maximum you are owed as quickly as possible. Having appropriate technology, adequate workflow and experienced billing personnel are important steps on the path toward a prosperous and efficient practice. The more that you can integrate these assets into your billing function, the stronger influence you can have over financial outcomes.
Scott Williamson, MBA, CAE(ret), is the Executive Director of the OPIE Choice Network. He founded and is President of Quality Outcomes, LLC., a company dedicated to establishing a consensus building approach to identify broad-based Orthotic and Prosthetic (O&P) outcomes data to identify and teach professional best practices. Scott was recently certified in Lean Six Sigma.
Scott is a member of the National Quality Forum and is active on the Quality Measures Research Council. In addition, he is a member of the Board of Directors of the Center for Orthotic and Prosthetic Learning, he is a member of the Agency for Healthcare Research and Quality (AHRQ) and is past-chair of the Healthcare Knowledge Taskforce for ASAE. He is the President of OPAF and is Treasurer of the Pedorthic Research Foundation Board of Directors. He has worked in professional certification since 1992, and most recently worked for the American Board for Certification in Orthotics, Prosthetics and Pedorthics, Inc. (ABC) from 2002 – 2010 as the Director of Facility Accreditation. In that position he played a key role in establishing and maintaining the national standards for quality O&P care. Scott has been a key liaison between the O&P profession and CMS during the development of the CMS Quality Standards and their mandatory accreditation program. In 1995, Scott earned his Masters of Business Administration from the University of Richmond and his undergraduate degree is in Management Economics from Hampden~Sydney College. While earning his MBA, Scott worked for MWH MediCorp (a hospital holding company) where he developed and maintained billing and performance data and was responsible for corporate safety and security. In 2005 Scott earned his Certified Association Executive (CAE) credential from the American Society of Association Executives (ASAE). Scott is a frequent speaker on value-based healthcare and its impact on the provision of O&P services, as well as business process improvement and change management in a small practice setting. He has taught DMEPOS accreditation processes and standards and explained the CMS Quality Standards. Scott, his wife, Colleen and daughter Nicole live in Fredericksburg, Virginia.