In the past year, services like revenue cycle management have become somewhat of a buzzword in the healthcare industry. ICD-10 was delayed of course, and if your organization wasn’t focused on preparing for that shift, they should have been searching for ways to enhance and strengthen their revenue cycle. After all, most healthcare organizations expect some friction and payment problems after ICD-10 implementation, regardless of your preparation level.
It’s one of the reasons revenue cycle solutions are becoming so highly sought after. In the case of insurance denials, for example, there’s an an increasing concern for hospitals and their financial counterparts, as denials are tedious to maintain and waste valuable time and revenue that could be put towards more important tasks—like improving patient satisfaction, or maybe your organization’s bottom line.
And that’s what leads many health organizations toward the questions:
Do I really need a revenue cycle solution?
Are payment issues like denied claims bad for my business’ bottom line?
The truth is, there are many ways insurance denials can hurt your bottom line, but we’re here to give you some insight on how to avoid these problems and prevent them from further-damaging your business’ brand and bottom line.
Insurance Claim Denials
If you’ve been following our blog over the last few months, you understand the importance of effective denial management. At the end of the day, every denied claim is another source of incoming revenue that your organization isn’t taking advantage of. But your business shouldn’t sit back and accept your losses. Be proactive and analyze your denial management strategy for insight into what’s working, and what’s stalling the process from getting you paid.
Pick a date range and analyze trends, common denials, and other key performance indicators. You want a visual representation of these denial causes, as well as their frequency of appearance. This way you can compare the month-to-month status of your denials to prevent, or at least limit, future occurrences.
If poor coding is causing an uptick in denied claims, you may need your coding staff to go through additional training. Many hospitals and practices that are finding denied claims due to coding errors would be wise to look into revenue cycle management solutions to help streamline the process.
Declining Reimbursement Rates
One of the leading payment problems hospitals face in 2015 is declining reimbursement rates. Of course, the decline of reimbursement rates is nothing new for hospitals and practices, but the challenges caused by dwindling reimbursement rates have intensified due to the introduction of the Affordable Care Act. For many smaller practices, it feels like the costs are skyrocketing while the money they receive back from Medicare and Medicaid continue to decrease.
What are those practices and hospitals to do? For starters, they should review their payer mix, i.e. the percentage of revenue that comes from private insurance, government insurance, and patient payments. By comparing different insurance payers and patient payers, you can start to build a better understanding of where most of your reimbursement profit stems from.
Analyze over a year’s time for a clear view, as it can help you prioritize your reimbursements to ensure you’re getting a healthy in-flow of revenue. Those revenue cycle services I mentioned before can consult your team to help determine whether or not those lacking payers (both patients and insurance providers) are even worth your time to begin with.
Insurance companies have placed greater responsibility on patients in terms of managing their own healthcare and expenses, and while that sounds nice, many of these patients don’t understand the complexities of the insurance system. So of course, that leads to less revenue entering your organization. What you should be doing is educating your patients on their responsibilities, but don’t just leave it to them. Find a way to make it easy for them to pay, and they’ll be that much more likely to go through with it.
That’s why many hospitals and practices are beginning to require payment at the time of service, at least in the form of a credit card. That way, your organization at least has your patient’s financial information on file, which can ensure faster payments, especially for automatic payments. You should also offer patients an option to pay online through a secure web portal.
The easier you make it for the patient, the easier time they’ll have providing you what’s owed. Taking care of some of these concerns can also help maximize your patient satisfaction score. They should have options, guidelines, and support to help them pay off what they owe to ensure they have a positive experience the next time they visit you.