Every dollar has always counted, but the impact of missing out on revenue is felt as intensely as ever in the current era of rising expenses for healthcare providers. One key strategy for ensuring that your group is getting each of those dollars is performing audits of payer payments against contracted rates.
A Jan. 17, 2023, MGMA Stat poll asked medical group leaders how often their organizations audit those payments versus contracted rates. The most common response was monthly (26%), followed by:
- Annually (25%)
- Never (24%)
- Quarterly (15%)
- Semi-annually (10%).
These results show an increasing frequency of these audits compared to a Jan. 5, 2021, MGMA Stat poll, which found that nearly half (47%) of groups only audited payments versus contracted rates annually, followed by:
- Never (25%)
- Quarterly (10%)
- Monthly (9%)
- Semi-annually (9%).
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For an outline of the key steps in planning to audit payer payment audit, download MGMA’s new resource to use in your practice.
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Optimizing payer payment audits
Payer payment audits in healthcare can be a time-consuming and labor-intensive process, but they are necessary to ensure the accuracy and integrity of the billing and payment system.
Below are five key strategies for optimizing payer payment audits in the healthcare industry:
- Use technology to streamline the process: There are several software tools and platforms available that can help automate and streamline the payer payment audit process. These tools can help identify errors and discrepancies more quickly and efficiently, saving time and reducing the risk of errors.
- Implement a robust billing and coding system: Proper billing and coding is crucial for ensuring accurate payments from payers. Implementing a robust billing and coding system can help reduce the number of errors and discrepancies that need to be identified and corrected during the payer payment audit process.
- Regularly review and update policies and procedures: It is important to regularly review and update policies and procedures related to billing and coding to ensure that they are up to date and in compliance with industry standards. This can help reduce the risk of errors and make the payer payment audit process more efficient.
- Train providers and staff on billing and coding best practices: Ensuring that staff are properly trained in billing and coding best practices, which can help reduce errors and improve the accuracy of the payer payment audit process. This should include education for physicians and qualified healthcare workers to understand current coding guidelines; if there’s a provider query process, explain the need for timely responses to prevent a lag in billing. Consider implementing ongoing training and education programs to keep staff up to date on industry changes and best practices.
- Work closely with payers: Maintaining good relationships with payers can help facilitate the payer payment audit process. Consider establishing regular communication channels with payers to stay informed about changes to policies and procedures, and to address any issues or discrepancies that may arise.
Revenue cycle key performance indicators
Tracking key performance metrics (KPIs) is important for medical practices because it allows them to monitor and measure their performance in key areas that affect their revenue cycle. By monitoring these KPIs, medical practices can identify areas where they can improve their revenue cycle management and take action to address them. This can help increase their revenue by identifying and addressing issues such as denied claims, delayed payments, and coding errors.
Tracking KPIs can help practices identify trends and make data-driven decisions that can improve their overall performance. KPIs can also serve as a means of communication with their payers.
The most common KPIs that a practice should track to help monitor payer performance include:
- Claims processing speed and accuracy.
- Accounts receivable (A/R) days: measures how long it takes for a practice to collect payment on billed claims.
- Claim denial rate: measures the percentage of claims denied by payers.
- Clean claim rate: measures the percentage of claims submitted with no errors or omissions.
- Collection rate: measures the percentage of charges collected from patients.
- Charge capture rate: measures the percentage of charges billed to payers and patients.
- Net collections: measures the amount to money collected from patients and payers.
- Average collection period: measures the average number of days it takes for a practice to collect payment of billed claims
Optimizing payer payment audits in healthcare requires a combination of technology, robust policies and procedures, ongoing staff training, and good communication with payers. By implementing these strategies, healthcare organizations can improve the efficiency and accuracy of the payer payment audit process, ultimately leading to better financial outcomes for the organization.