Those in the healthcare industry are certainly no strangers to insurance claim payments being delayed or denied. Practices facing this issue are at a great risk for losing out on revenue throughout each year, because it is estimated that around 25% of denied claims are never paid at all. If your organization’s denial rates are particularly high, this issue is one that will need to be addressed and resolved so your practice can continue to serve patients and bring in revenue. One of the most effective ways to determine how to prevent such denials is to evaluate and assess your practice’s revenue cycle. Keep reading to learn more about how to conduct this type of assessment and how Healthcare Information Services can help optimize your revenue cycle for practice success.
Why Do Insurance Claims Get Denied?
According to 2019 MGMA data, there are a number of common reasons why insurance claim payments are denied. The most common cause is missing or incorrect information, such as demographic information, procedural codes, or diagnosis codes. Coming in at a close second is prior authorization not being conducted. Other common causes of claims denials include medical necessity requirements not being met, procedures not being covered (eligibility issues), payer processing errors, the provider being out of network, and coordination of benefits. Denials are an issue for healthcare practices because they can lead to loss of revenue and reimbursement, as well as force a practice’s billing staff to evaluate and resubmit the claim. Denial rates can be greatly decreased through an assessment of a practice’s revenue cycle.
How to Assess Your Revenue Cycle
A detailed revenue cycle assessment can help your practice avoid claims denials and ensure that you receive regular reimbursement for services provided. With that being said, one of the most important benefits of reducing denials for your practice is increased profitability. Your revenue cycle evaluation should include a review of the following elements.
Key Performance Indicators
In order to fully understand your revenue cycle, you need to have a strong grasp on your practice’s key performance indicators. Once these are determined, benchmark them against industry best practices. Performance metrics to consider include net collection rate, days in accounts receivable, and more. This type of analysis will allow your practice to identify opportunities for improvement moving forward.
Current Processes
When evaluating your revenue cycle, time should also be spent on a review of the process itself. Your revenue cycle includes many moving parts, starting with initial registration and ending with insurance follow-up. Looking at the process step-by-step will allow you to analyze workflow and the time it takes to complete each step of the process, which can shed light on areas to improve.
Tools Utilized
Part of your practice’s revenue cycle process undoubtedly includes the utilization of specific tools. You should spend time determining which tools and resources are used for each task along the way. Talk to your staff about how they feel about how the process is run and which tools are most helpful to them.
Staffing Levels
Time should also be spent on a review of your practice’s staffing levels. Discuss operations with your staff and determine how many individuals are needed for each step of the process, as well as how time spent is affected by factors such as specialty, patient demographics, and technology needed. You can also take this time to address your potential staffing needs moving forward, influenced by the new plans you create.
Expert Revenue Cycle Management from Healthcare Information Services
A comprehensive review of your revenue cycle can help your practice greatly reduce your number of insurance claim denials, leading to increased cash flow and overall practice optimization. At Healthcare Information Services, our team specializes in revenue cycle management for orthopedic and radiology practices, and we would love to work with your practice to help you achieve success. Our RCM services aim to speed up turnaround, avoid refiling costs and delays in reimbursement, and maximize cash flow. HIS can also be utilized to perform an expert analysis for your practice, so you can gain insights into what to address and how to make the proper changes moving forward. We proudly offer a variety of practice management services with the goal of bringing your practice to the forefront of your industry. To learn more about all we have to offer, please contact us today.