As technology continues to grow and evolve, the number of cold calls I receive from software vendors seems to increase.
Benefits verification software, patient notification systems, online pre-admission solutions; there is some fascinating stuff out there. Intrigued by the revenue cycle benefits some of this technology has to offer, I couldn’t help but wonder where these tools might fit within our current model. This was the impetus for a review of our surgery center’s revenue cycle workflow.
As the administrator of a busy surgery center, it is easy to get caught up in complex issues; so much so that we sometimes forget the fundamentals. That is why I developed a best practices checklist for implementing a revenue cycle program (based on managing billing in-house).
Because the revenue cycle directly affects a surgery center’s cash flow, it is the proverbial lifeblood of the business. Therefore, a periodic check-in to make sure your workflow is still appropriate is a wise investment. To help other busy administrators, I developed the following list.
1. Schedule with accuracy. While obtaining accurate information at the time a patient is scheduled seems pretty standard, it is a task many centers struggle with. If you don’t get it right the first time (patient name, insurance numbers, birthdate, etc.) a lot of time will be wasted later chasing it down, which can potentially result in denied claims and delayed collections. Unfortunately, the demographic and insurance information supplied by physician offices is sometimes incorrect.
Online pre-admission technology can assist with ensuring accuracy. Enabling patients to complete their medical histories (including demographic and insurance information) at a time and place that is convenient for them typically yields more accurate information. Systems like One Medical Passport offer facility-wide secure access to pre-admission information which is very helpful for nursing staff and the billing department.
2. Perform benefits verification in advance. Making sure a patient has coverage well in advance of a procedure will allow you to identify any potential issues upfront. If an HMO patient doesn’t have a referral, the claim will be denied and you won’t be paid. There are several online sites that can assist with insurance verification. For example, the cloud-based EASE eligibility application tracks insurance data, surgery coverage qualifications and benefit details.
With deductibles increasing, it is important to know what has been met. For large deductible balances and self-pay patients, collecting payment prior to the date of surgery will help you keep collection costs down, reduce bad debt, and avoid potential last minute case cancellations if payment can’t be made.
3. Partner for coding and billing success. While coding and billing is something that can be successfully outsourced, particularly for those centers without the software, staff or space to do it themselves; for those that opt to keep it in-house, a clearinghouse is a must. Partnering with a clearinghouse typically results in claims being processed more quickly and with greater accuracy. A clearing house’s responsibility is to ensure everything is properly formatted and that files are transmitted to the insurance carrier in a timely manner. Look for a partner that can integrate with your existing revenue cycle management software such as ZirMed and SourceMedical. The ability to pull information already entered into a center’s existing software eliminates time spent on manual data entry and ensures accuracy which minimizes costly billing delays.
4. Go electronic. With the exception of some worker’s comp submissions, electronic billing, electronic remittance, and electronic remittance advice (EOBs) is the standard today. The move to electronic billing will accelerate a center’s cash flow as well taking advantage of electronic remittance. With electronic remittance, insurance companies directly deposit payments using electronic funds transfer rather than mailing a paper check. Anything that eliminates paper, postage and manual processes is best.
5. Plan ahead for ICD-10. Because coding will be more complex when ICD-10 takes effect, you want staff that is not only current on coding, but understands the increased level of detail required by physicians; physician education is equally as important to ensure all necessary details are provided within the physician’s operative reports. Inquire with your software vendor to make sure they are ready for the conversion. Because hiccups are likely to occur, consider opening a bank line of credit. In the event there is a slow down or crash of claims processing at the time of conversion. This line of credit will help centers to meet payroll and vendor obligations while the fix is underway but the cash is not flowing.
6. Don’t forget clinical details. Capturing clinical details, including staff hours and supplies used on a case within a center’s clinical management software is essential for performing case costing. The ability to use this information to create a financial profile of a case will help determine if the case is profitable or if it is losing money. Case costing should be done initially for all new cases and then periodically thereafter.
7. Make a plan for outstanding balances. Run statements for patient-due balances frequently as they age up (weekly or even daily, as opposed to monthly); this will help centers stay on top of outstanding balances. Establish a set schedule for statement production and collection phone calls and have a set policy for making payment plans. Studies show that after 90 days collectability drops significantly. At this point consider writing off the balance as bad debt (so that the value of the receivables on your corporate balance sheet is not inflated), and placing the account with a third party collection agency.
If the collection agency recovers money on the account, deposit the funds in your accounting system (e.g. QuickBooks or Peachtree) as “bad debt recovery,” but not in your practice management system, as the account is already zeroed out.