Working together is key to maximizing the benefit of outsourcing your revenue cycle management (RCM). Laurie Morgan, partner and senior consultant with Capko & Morgan, shared information about why RCM is a team sport in her recent webinar, Choosing or switching your RCM vendor: avoid pitfalls, maximize upside.
“Regardless of whether you are outsourcing billing or doing it in-house, managing your revenue cycle is a team sport,” says Morgan. “And the game starts long before your biller gets involved, and before services are provided. To ensure you’ll be paid, someone inside your practice should be confirming insurance eligibility and explaining cost-sharing to patients. Failure to do these things in advance can result in patient confusion, which in turn leads to dissatisfaction—and, often, a hit to practice profitability.”
Morgan advised every practice to monitor 3 key metrics in partnership with their RCM vendor:
- Claims velocity indicates how quickly claims are being submitted to insurance companies after they are received by the RCM vendor from your practice. The goal is 1 or 2 days according to Morgan—and you should keep an eye on how quickly your practice is signing off on claims, too. Any delay on either side costs you money over time
- Denials should be rare. Carefully review the reasons claims are rejected or denied to reduce future denied claims and improve profitability
- Accounts receivable analysis is critical. Properly billed insurance claims should always be paid within a few weeks; increasing insurance receivables is a sign of problems in your billing process. And patient receivables must be closely monitored, too, because collectability usually declines significantly after 90 days
“These items are the financial lifeblood of your practice,” said Morgan. “Monitoring these metrics enables practices to understand what is occurring with billing and how to correct problems to increase revenue collection.”
Additionally, Morgan recommended verifying fees annually to ensure information is set up accurately in the RCM vendor’s system. She encourages practices to establish policies for write-offs and outside collections to ensure the RCM vendor can operate effectively on your behalf.
Above all, Morgan reminded practices to establish regular communication and operating mechanisms and be responsive when your billing partner has questions. She recommended identifying a person within the practice to serve as the primary point of contact in a billing liaison role. For practices challenged to create a career path for an employee, this can be an opportunity to grow into a more analytical or supervisory role.
“The goal, of course, is to send bills out correctly and as quickly as possible,” said Morgan. “Managing RCM is a team sport and working together with your RCM vendor to make adjustments to the process helps your practice avoid costly, repetitive problems and collect revenue in a timely manner. Even when outsourcing billing, your staff needs to be knowledgeable about the billing process to give great service to your patients.”
Check out previous posts in this series:
- Signs it’s time to consider alternative RCM solutions
- Reasons to consider outsourcing
- Making the switch: Tips for choosing a new RCM partner
Watch for the final article, “Pitfalls to avoid when moving or switching your RCM solution.”
Laurie Morgan, MBA is a partner and senior consultant for Capko & Morgan. Tune in to her webinar, Choosing or switching your RCM vendor: avoid pitfalls, maximize upside.