Financial Tools 845x422 - 3 Habits to Improve Your Revenue Cycle

3 Habits to Improve Your Revenue Cycle

The revenue cycle… a perpetual issue in most medical offices, its mention often inducing more anxiety than ease. In many of the practices I have been a part of, the problem is not so much how to bring in new revenue, as it is how to collect the outstanding income that already exists. I propose that effective changes can be made in simple ways and that these changes will have a definitive impact on your revenue cycle.

I do not propose a litany of new techniques and checklists, or increasing staff to divide labor. Rather, I think about forming new habits and engaging in consistent patterns that will reframe how you interact with your revenue cycle. New habits require new ways of thinking and new ways of viewing workflow. These ways of thinking can recharge a lagging accounts receivable, and rev up your collections.

Habit 1: Single-Tasking a.k.a. Less Is More

Reframe the penchant for multitasking that seems to be everyone’s marker for success, and start reveling in single-tasking. I have worked for offices whose staff have the best intentions, but often struggle with getting sidetracked by the phone ringing, the patient at the desk who needs attention, or the providers who are asking for assistance. Suddenly the EOB you just entered gets pushed aside, and although the insurance payments are posted, there goes the potential income from denied claims you forgot to follow up on, there goes the deductible fee you were waiting to bill that patient on. I recognize that the phone will never stop, and someone will always be needing your attention, but with the habit of single-tasking comes the quality of thoroughness. 

According to an article by Forbes, “Frequently switching between tasks overloads the brain and makes you less efficient. It’s a formula for failure in which your thoughts remain on the surface level and errors occur more frequently.”

Single-tasking equals thoroughness equals less revenue falling through the cracks.

Habit 2: Follow-Through

If single-tasking is a mindset, follow-through is its embodiment. Many offices have a common-sense division of labor: front and back office; reception, billing, accounts receivable. Without exquisite communication between departments, things get lost in translation and revenue declines. For example, in some offices one person enters the insurance payments, but another person sends out patient invoices after those payments have been entered. Depending on schedules and workloads, it could be days or weeks before invoices go out, thereby stifling cash flow. With the habit of follow-through, labor gets divided differently. The employee entering insurance payments follows through by sending out invoices related to each particular EOB at the same time, rather than letting them accumulate, thereby leaving the accounts receivable staff to focus solely on collecting past due, and not current accounts.

Another example of a place in need of follow-through is the front desk. Too often, due to distraction or awkwardness around the money conversation, the front desk neglects to collect the patient balance due at the time of service. To quote physicianspractice.com,

“…once a patient walks out the door, collection rates drop to 50 percent to 70 percent for small-dollar payments from insured patients, and to only 10 percent from self-pay patients. Make the money conversation part of your practice’s DNA and you will change your business.”

Making a habit of following-through on collecting current and past balances due when the patient is right in front of you at the desk goes a long way in keeping the revenue cycle flowing.

Habit 3: It’s All In The Details

To know the details, you need to understand the big picture. That comes through consistently educating yourself by researching topics such as current insurance fee schedules, allowed amounts, and accepted codes. This will go a long way toward increasing revenue by assuring you get the most income and least denials per patient. Having your charges per code far lower than the allowed amount, or using codes that consistently get denied, delays and lessens your income. Educating yourself on allowed amounts enables you to collect fees for services that will be applied to an annual deductible at the time of service rather than waiting for the visit to cycle through insurance to accounts receivable, where you will wait weeks or months to collect a patient balance.

According to Reed Tinsley, CPA and Healthcare Consultant,

“most insurers do allow you to collect the patient’s coinsurance and unmet deductible at the time of service… you’ll need to know what services the patient is receiving (because allowances are based on CPT codes). Thus, you’ll need to perform this collection activity as the patients check out of your practice… develop a spreadsheet that lists your top CPT codes and the corresponding allowances for each code by each of your major payers.”

In addition to knowing allowed amounts, it is important to understand the details of each patient’s insurance plan. If you verify eligibility, inform yourself if there is a copay or coinsurance, and find out if a deductible does exist and how much has been met to date. Then you will be prepared to collect the correct amounts due from the patient at the time of service.

Increasing your revenue cycle is not only about how to bring in your full allotment of money due, but also how to accelerate your practice’s cash flow, so that the money due comes in a timely way.

 

These three habits of thoroughness, follow-through, and a commitment to knowing the details, will all go far in maximizing your cash flow and streamlining your revenue cycle. They are small changes that over time can have a big impact. An office that strives toward a sleeker, more efficient workflow creates a user-friendly experience, both for patients and staff.

Try these habits on, or develop some of your own, and see how reframing your workflow will amplify your cash flow.