There are few things in medicine as important as the revenue cycle, but this is also one of the most overlooked aspects of many small and independent clinics. Physicians are often focused on providing great care—which is certainly important too—leaving revenue cycle to an office manager or staff member, or simply ignoring it and hoping to be able to pay the bills. While that might work in the short-term, your clinic will likely struggle to stay profitable.
One thing many small and independent clinics don’t always think about is outsourcing your revenue cycle management. You may not want to outsource the entire process, but there are some parts of the process where you can easily engage a third-party RCM service. Outsourcing the right steps can have a dramatic effect on your overall collections and revenues.
Understanding Each Step in Revenue Cycle Management
Before we talk about which steps you can outsource, let’s review all the steps of the revenue cycle management (it’s more than just medical coding and medical billing).
- Pre-registration – collecting information about your patient and his/her insurance coverage during scheduling
- Registration and insurance verification – verifying patient information and confirming insurance coverage
- Diagnosis and treatment – properly documenting medical services and procedures in the EHR
- Coding and medical billing – applying CPT and ICD-10 codes based on the diagnosis and treatment, then converting those into billable charges
- Claims submission – sending information to insurance carriers for reimbursement
- Patient collections – billing patients for any remaining balance after insurance reimbursement, or for any portion not covered by insurance, collecting payments, and applying to outstanding balances
Steps You Can Outsource
If your small staff is struggling to keep up with all these steps, or you are seeing your total collections decline, outsourcing can boost clinic revenue.
Coding & Billing
Medical coding and billing are difficult for many clinics because they are increasingly complex, and getting it wrong results in a rejected or denied claim. If you don’t have a big enough staff to keep up with these tasks, outsourcing can definitely help.
Medical claims processing is another area where a third-party RCM company can help. A “claims scrubbing” service will check claims for errors before you submit to help you avoid denials and rejections. Outsourcing the entire process means the third-party company will also follow up on claims that are rejected or denied, correcting mistakes or sending appeals to the insurance carrier. Data show that anywhere from 5% to 10% of initial claims are denied, and as many as 50 to 65% are never resubmitted.
Following up with your patients to collect payment is time-consuming, so sending that task to a third party can significantly reduce your days in A/R and improve collection rates. These companies send invoices, collect payment, set up payment plans, and offer online bill pay portals for added convenience.
To find out more about outsourcing certain steps of your revenue cycle management, talk to AdvancedMD today about our available services.