We all know the revenue cycle management (RCM) process is complicated. And launching into that process requires a practice to track patient encounters.
Tracking encounters goes hand-in-hand with submitting claims to insurance, collecting patient co-pays, and collecting patient balances.
But nearly 80 percent of medical practice administrators struggle to keep track of and reconcile patient encounters.
The result of this struggle is a falloff in the crucial step of submitting claims for billing. According to a survey by the Medical Group Management Association, 7 percent of medical claims are never submitted to insurance companies for reimbursement. These encounters get lost in the shuffle. And in that shuffle, money is lost, for medical practices and hospitals alike.
If a practice can’t track an encounter, they aren’t tracking co-pay collections. According to a report by the Advisory Board, 40 percent of copays go uncollected. That adds up to a significant amount of lost revenue.
Co-pays may sound like (financial) peanuts. But to showcase the importance of collecting them, according to a study by the Medical Group Management Association, medical practices actively tracking and collecting co-pays (meaning they collect at least 90 percent of them) see an overall 10 percent or more increase in practice revenue.
The third area where revenue takes a hit when tracking efforts overwhelm staff is patient financial responsibility. When tracking measures are off, 68 percent of these patient responsibility balances are left unpaid, according to a study by TransUnion Healthcare.
Overlooking insurance submissions, co-pays, and patient financial responsibility balances are three areas that lead to substantial lost revenue. All of these are avoidable, however, and all originate with the ability or inability to track and reconcile patient encounters.
So, how does a practice sort it out?
It’s human nature to become complacent, and do things “the way we always did them.” But with today’s complexities, it’s time to set aside the paper and spreadsheets.
The first step is implementing more sophisticated tools and software to track, reconcile, and streamline the billing and claims process.
We’ve talked about affordable technologies available today that can track which patients were seen by which providers, on which days, and at which location. It’s a logistics dream for administrators, practice stakeholders, and finance teams, and an easy way to increase the number of claims that get sent in to insurance for reimbursement.
The second step is to prioritize the collection of co-pays in order to maintain – or improve on – a healthy financial position. Technology that gives a heads-up on the front end of an appointment, with respect to eligibility, prior authorization, and co-pay, prepares staff to collect what is owed when the patient is standing directly in front of them, stopping the wasteful cycle of mailing out continual invoices, which remain unopened and unread.
The third step is to collect patient responsibility balances – and close the gap on the almost 70 percent that remain unpaid. When encounters aren’t lost in the shuffle, patient balances aren’t lost either. This is an enormous financial win for providers.
By addressing these everyday struggles on the front end, with readily available tools and the RCM technologies offered today, medical practices can improve their financial position and provide better quality care to their patients.
Programming note: Listen to Susie Vestevich report this story live today during Talk Ten Tuesdays, 10 Eastern, with Chuck Buck and Dr. James Kennedy.