Keeping watch for revenue cycle leakage, what to know
Late filings, missing authorizations and inconsistent collection follow-up can add up.
On the financial side, revenue leakage can be caused by a number of factors, including late filings, missing authorizations and inconsistent collection follow-up.
As the October 1 deadline for ICD-10 nears, healthcare organizations are under pressure to improve operational efficiency so that the transition to the new medical and diagnostic coding system is relatively smooth.
While expecting a seamless conversion to ICD-10 is unrealistic, healthcare providers can minimize the impact of claims errors and denials on the revenue cycle by anticipating the most likely mistakes and working to optimize internal processes or workflows.
The two internal workflows that most impact the revenue cycle are clinical and financial. Both are where you typically find revenue leakage caused by outdated processes, inadequate communication and lack of follow through.
For example, revenue leakage can be caused on the clinical side by:
Archaic procedures – While a general practitioner may refer a patient to a specialist within the healthcare network, there's no guarantee the patient will see the specialist. Much depends on how the referral process is handled. A study by the Journal of American Medicine from 2009 shows that nearly half of referrals (46%) faxed to specialists within the network did not result in a patient appointment. For referrals made electronically, the follow-up failure rate was only 17%.
Human error – A clinician performs a procedure that isn't covered, or a coder records the wrong code. In the first case, the provider won't get paid by the intended insurer, and likely won't get paid by the patient if the bill is large. Coding errors can lead to claims rejections and delays.
On the financial side, revenue leakage can be caused by a number of factors, including late filings, missing authorizations, and inconsistent collection follow-up. These can be the result of employee mistakes, poor technology (such as confusing forms), or a combination of the two.
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The larger the organization, the more challenging it may be to locate and stop revenue leaks, especially if clinical and financial workers aren't aligned in support of the organizations goals, a common situation. One long-term approach to creating this alignment is to form an ongoing informatics team comprised of key employees in each stakeholder group, including IT, finance, and clinical and process workflows.
Healthcare organizations also can turn to analytics to uncover flaws in their revenue cycles and move toward eliminating leakage. Analytics provides transparency into the complicated interplay between healthcare clinical and financial processes, identifying bottlenecks, recurring problems, and siloed information. Properly deployed, analytics can reduce miscoding, overcharges and readmissions, while increasing collections and referral revenue.
By adopting a team approach, periodically reviewing processes and procedures, and leveraging analytics, healthcare organizations can effectively manage revenue leakage and stabilize their revenue cycles.
This first appeared on Revenue Cycle Insights.
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