Each year, U.S. healthcare providers spend nearly $500 billion on billing and insurance verification. Learn how outsourcing revenue cycle management to professionals can help your practice increase revenue and quality of care.
What is the revenue cycle?
The revenue cycle describes the whole process from patient scheduling all the way to payment collection; however, it is typically used to refer to billing and management.
Office staff spend an enormous amount of time billing both insurance claims and patients. This process becomes especially taxing when regulations change, as they often do. Keeping up with immense workloads and constantly changing policies can lead to documentation errors. As a result, the number of rejections increases, leading to delayed payments.
In order to solve this problem, healthcare providers should look into outsourcing their RCM to a professional RCM partner to make sure that claims are paid in a timely manner.
Outsourced billing services provide four major benefits: saving therapists and their staff time, removing the worry about adhering to payer policy changes, fewer claim denials due to improved processing time, and an increase in revenue due to more payment collections and saved expenditures.
Regain Countless Hours
In addition to being incredibly time consuming, the process of RCM is very complicated. Initially, office staff must handle scheduling, insurance verification, and establish an account for the patient containing his or her medical history as well as insurance carriers. A claims submission must then be created with the proper ICD-10 code to ensure that healthcare entities are reimbursed for treatments. After the claim is created, it is sent to a private or government insurance provider for reimbursement. Claims can be denied, however, due to missing or improper information as well as coding errors.
Therapy revenue cycle management, then, should be outsourced to an RCM firm to lessen the burdens faced by medical personnel on a daily basis. Front office staff who usually handle billing will find themselves with more free time.
Besides the obvious benefits of decreasing stress and making the workday less hectic, more time will now be available to work on revenue-generating activities such as improving existing marketing efforts and making the patient experience more enjoyable.
Employees with fewer responsibilities have ample time to devote to their respective tasks, improving the quality of their work. The production of high-quality work can lead to increased confidence and morale among employees, leading to a host of other positive effects.
Erase your worries about policy changes
Though it may benefit many deserving seniors, Medicare can prove troublesome to medical personnel. Every year, the organization updates its billing regulations, policies that must be strictly obeyed. In response, commercial payers may update their own policies, and the Department of Health and Human Services (HHS) frequently changes its guidelines. This leads to much confusion for front office staff who constantly have to adapt to changing policies.
RCM outsourcing puts the task of tracking and adhering to various guidelines in the hands of trained billing professionals, leading to some much-needed relief for therapists and their staff.
Fewer mistakes leads to fewer denials and faster payments
The decision to outsource RCM leaves the task of billing in the hands of experts. Besides adhering to frequent regulation changes, experienced RCM teams are less likely to make mistakes when billing. Experienced billers can drop denial rates to 1 percent, and as a result, there is a reduction in denials of claims.
A lower denial rate also leads to fewer days spent in accounts receivable, the amount of money not yet paid by medicare, private insurance and patients. This leads to increased cash flow and prevents payments to therapists and insurance companies from getting stuck before it flows through the entire pipeline.
Collect, save, and profit
RCM outsourcing can also lead to an increased collection rate. The use of an RCM team leads to a reduction in denials and turnaround time, which increases the likelihood that therapists will collect patient payments.
According to a study done by McKesson, the chance of collecting a payment falls by 60 percent over the course of seven months, so the sooner a payment is processed, the more likely a therapist will collect payment.
A report from The Market Reports found other benefits of using an RCM team: “Practices and hospitals that have outsourced their revenue cycle management function to third-party experts have experienced significant improvement in their collection rates, denial resolution efficiency, patient satisfaction rates, and revenue.”
In addition to increased revenue and collections, practices can cut costs by outsourcing therapy revenue cycle management to an RCM partner. Office staff often have to be trained; in addition to their salary, they need benefits such as health insurance, a retirement savings account, and paid vacation. By using an outside firm, the cost of hiring and training additional employees is eliminated.
Revenue cycle management is a long and complex process, one which leads to increased stress, lost revenue, and lower levels of productivity when left only to front office staff. A professional RCM partner can save time, money, and a lot of headaches surrounding payment collections, changing regulations, and denials of claims.
If you are feeling as if your current in-house system of billing is causing problems for you or your staff, it may be worth looking into ways to outsource RCM to professionals who can relieve the burden of billing.
Ready to boost your practice’s productivity and profitability? PatientStudio’s all-in-one practice management system relieves office staff of the daunting task of billing and insurance verification. Schedule a demo today.