Data Insights

Healthcare leaders point to their biggest revenue cycle challenges

MGMA Stat

Coding & Documentation

Billing & Collections

Reimbursement

MGMA Staff Members
MGMA State
The scope of revenue cycle management is broad, with numerous areas that could require the keen attention of a practice leader, from ensuring eligibility information as a frontline defense against claims denial to point-of-service collections for patients with high-deductible health plans (HDHPs).

The Medical Group Management Association’s most recent MGMA Stat poll asked healthcare leaders: “What is your biggest revenue cycle challenge?” A majority (48%) responded “claims payment,” while 23% reported “other” revenue cycle issues, with the top three being denials, prior authorization and staffing issues. Nearly two in 10 (18%) pointed to the capturing and/or sending of claims and another 11% stated “clearinghouse/processing claims.”

Respondents who elaborated on their biggest revenue cycle challenge offered these insights on:
  • Capturing/sending claims: Completing clinical documentation in a timely manner
  • Clearinghouse/processing: Dealing with clearinghouse reporting delays and issues
  • Claims payment: Navigating the ever-changing payer rules and regulations
  • Other: Recruiting adequate and qualified revenue cycle staff
The poll was conducted on November 19, 2019, with 825 applicable responses.

As Kem Tolliver, CMPE, CPC, CMOM, president, ITS Healthcare Consulting, noted during her session at MGMA19 | The Annual Conference in New Orleans, assessing your practice’s revenue cycle is a challenge that requires you to think about the life cycle of your practice.

In one instance, Tolliver was looking into a decrease in reimbursement for a cardiology practice. She quickly noted that a major payer had changed its rules and now required certain cardiac services to have a prior authorization. “The doctor wasn’t aware,” Tolliver said. “His staff, they didn’t get those authorizations,” resulting in the major decrease in reimbursement.

A revenue cycle assessment should take account of those areas of risk in which there are vulnerabilities, building a corrective action plan to shore up those vulnerabilities and making sure the plan is included in your policy and procedure manual so that staff have access to the information.

Yet that sounds much easier than it truly is. As David N. Gans, MSHA, FACMPE, senior fellow for industry affairs, MGMA, has pointed out, “we live in the best of times and the worst of times” for practice management information, as healthcare leaders sometimes find themselves “awash in data but lacking true business intelligence” when it comes to identifying and monitoring key performance indicators (KPIs) to describe how the organization’s revenue cycle is performing.

“Since economic security is fundamental to continued operation, KPIs that measure a practice’s profitability and its ability to collect payments and manage expenses are universal,” Gans wrote, citing nine key KPIs that help practice leaders understand:
  • The revenue cycle of recording, billing and collecting for services
  • Cost-efficiency
  • The bottom line, expressed in the basic formula of total revenue minus operating expense and provider costs. 
MGMA members can read more about those nine KPIs here.

Tools for RCM assistance

RCM tools should do more than process a claim, says Eric Krepfle, senior director, product management, Change Healthcare. The ideal RCM tool:
  •  Offers the ability to monitor all the steps of the process from pre-service to zero balance.
  • For denials, there should be more than just reports that indicate you are getting denials.
  • Enables drill down into the actual claim for root cause analysis to the individual contributor level and specific data points. 
  • It should show trending, enable you to set your own goals and help practices determine whether that is “good” or not.
 
These tools should update daily so that you aren't waiting until the end of the week, the month or the quarter to know if RCM process improvements are improving cash flow.

Krepfle points out that authorizations are a vital part of financial clearance, now more so than ever with value-based care initiatives driving these to the forefront of the process. The cost of not getting one and being denied payment or reduced payment will directly affect patients. Without reimbursement, they will end up paying the balance — if not the entire amount — themselves.

Key considerations in RCM assessment

Assessing your practice’s RCM should begin with an understanding of what you hope to achieve, whether that’s reduced costs, specific reimbursement improvements, more efficiency in the workflow or a combination of all the above.

“One of the discussion points we have with providers who want to analyze their practice or organization revenue centers around both access to and understanding of their data,” Krepfle says. “Clinicians are wonderful resources when discussing action plans, process improvement measures, and so forth but when it comes to V-Lookups, Pivot Tables, data normalization, and the like their eyes gloss over. Understandably so, because most have not had that level of training or experience. They need data that is digestible, relatable, and when they see it, they have an idea of what they need to do. If clinicians are spending time performing in-depth analyses, they are not using that time to be with patients."

As outlined in an October 2018 MGMA Connection magazine feature, these definitions are key to strategic RCM updates. For example, an outsourced vendor performing collection work may not be able to correct internal processes gone awry (e.g., registration errors, physician delinquency, clinical documentation errors, coding delays). In many cases, there is no substitute for the hard work of finding (training, retaining and rewarding) the right people, processes and technology.

When evaluating your RCM for the best way forward and assessing in-house capabilities against an outsourced solution, know what you expect in terms of cost savings, service levels and the manual work-arounds often needed due to IT integration issues with your system(s).
Outline the problem(s) you need to solve by asking these questions:
  • Are there management issues within the revenue cycle? Is there accountability for results?
  • Do I need a productivity and quality program?
  • Are there other transformation initiatives that will compete for resources?
  • Is my existing technology fully optimized? If not, do I need additional technology? Do I have a lack of capital to invest in new technology? Are there other sources of technology (e.g., reporting package from source data files to effectively monitor and trend performance against key performance indicators) that would offer the solution? Do I have manual or automated processes?
  • Can I reduce labor costs? Are there excessive labor costs or is it difficult to hire adequate staff? Do I have the right people on my team? Are the right people in the right role? Do I have manual processes and is there redundancy in work or other inefficiencies in processes?
  • Are processes too decentralized? Are there office politics around controls and reporting relationships? What could be centralized to increase efficiency and realign/reduce staff?
  • Are there low standards or an organizational tolerance of poor performance? How is the process for improving performance handled?
  • Do I need a backlog reduction plan (e.g., cleaning up old accounts)?
  • What would it take to solve the problem internally in terms of resources: money, time, people, leadership? What are the obstacles and are they likely to be overcome with an outsourced solution?
  • Are there issues with timeline constraints? Would it take too long to fix internally or does the organization have too many competing priorities?
All these factors influence the decision on revamping your RCM, as well as:
  • Who is managing the outsourced team? Do we have experience with governance of outsourced vendors?
  • Do I have the right leadership, the right reporting and analytics in place to achieve desired results from our outsourced solution?
Krepfle adds that if managing an outsourced team is not an option, check with your current revenue cycle management provider/vendor for tools they may have that can assist. 

Additional resources

 
*This poll was conducted in collaboration with Change Healthcare.*

Would you like to join our polling panel to voice your opinion on important practice management topics? MGMA Stat is a national poll that addresses practice management issues, the impact of new legislation and related topics. Participation is open to all healthcare leaders. Results of other polls and information on how to participate in MGMA Stat are available at: mgma.com/stat  
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