Optimizing revenue for recovery: Strategizing to overcome volume deficits and maintain a healthy revenue cycle in 2021

Insight Article - November 2, 2020

Coding & Documentation

Reimbursement

Craig Adkins


In March 2020 when state and local governments placed much of the United States under stay-at-home orders to slow the spread of COVID-19, many medical group practices didn’t fully understand how these events would impact their financial solvency. Appointment postponements to meet seemingly short-term health and safety requirements stretched for weeks and then months into an unpredictable stream of cancellations. A palpable sense of uneasiness marked springtime — and then, summertime — in healthcare and beyond.

While many practices were able to utilize telehealth visits and implement new safety measures to generate a moderate return of patients, revenue losses in 2020 were substantial. One study published in Health Affairs estimated a gross revenue loss in U.S. primary care practices of $67,774 per full-time primary care physician in 2020.1 Based on the number of practicing PCPs nationwide, the study authors estimated that would be a $15.1-billion loss in primary care practices for the year.2

As routines, policies and challenges evolve, providers are concerned about maintaining income and patient health. They are finding improved ways to connect with patients, provide safe care, collect timely payments and reduce denial rates for a healthy revenue cycle. Here’s how medical group practices are striving for a profitable new year.

Boosting the basics

When it comes to revenue cycle management (RCM) — during COVID-19 or normal times — it’s important to remember some best practices, on the payer and patient side, that make groups profitable. Patients’ insurance eligibility should be verified before a claim goes out, ideally in real-time as patients are waiting or being treated. Practices can confirm demographic data and verify insurance, and even leverage this data to generate price estimators based on their deductible, copay and other payer information. By confirming insurance information and determining what the patient may owe, practices increase their chances of timely and accurate payment on both ends. It’s important to be up front with patients about self-pay policies and time-of-service payments to ensure revenue is collected expeditiously and statement costs and patient bad debt are minimized.

When submitting claims to payers, group practices with the healthiest revenue cycles submit their charges within 24 hours from the time of service. This keeps claims filing consistent and payments regular and predictable. If a practice chooses to only bill once a week, for example, it’s going to experience gaps between cash flow and expenses, receiving chunks of payments that require larger periods of time to process and post. This type of inconsistent workflow is difficult to manage and increases response time for working denials and appeals. Consistent, timely, daily coding and billing is absolutely a best RCM practice.

Practice administrators also should ensure that the practice posts all its payer denials accurately. For electronic payments, or electronic remittance advice (ERA), it’s vital to ensure the practice management system (PMS) is properly programmed to accurately populate denial codes, especially for zero-pay ERAs.

By pulling the ERA (835) file and looking up a few accounts to verify the denial is posted accurately, the practice can ensure a clear and accurate picture of its denials. If a group is manually posting off hard-copy explanations of benefits (EOBs), those must be regularly checked for data-entry accuracy. Healthy revenue cycle management includes a commitment to capture correct denials data.

A deeper dive into denials

Once a group practice establishes that the denial information is captured accurately, it may be analyzed for a deeper understanding of denial trends. By having a system in place that enables the administrator to view denial reports on a regular basis — at least monthly — the practice is primed to generate a root cause analysis to improve payment results. A detailed breakdown will show a summary of denials and categorize them by causes including coding issues, preauthorization failures and patient demographic/insurance errors. Results should also be presented as a ratio: The percentage of denials compared to the total encounter volume to measure consistently over time, regardless of volume fluctuations. This is especially valuable during COVID-19 when capturing every payment is more important than ever. Management thought leader W. Edwards Deming’s axiom, “You can’t manage what you can’t measure,” is true when it comes to reducing denials and maintaining a healthy RCM.

Once the denials are appropriately categorized, it’s important for practices to track the denial resolution rate. While fairly complicated to determine, its benefits cannot be overstated. Certainly, some large commercial payers are notorious for implementing denial rules for dubious reasons, which they frequently change, dial up and dial back with no strong clinical basis. By analyzing the final disposition of frequently denied claims from a single payer, it can become clear that most — if not all — instances of an issue are eventually paid without any change to the claim, apart from going through the payer’s appeal process and perhaps providing additional documentation. Payers have counted on the fact that most practices won’t track denials with this level of discipline. Don’t be that practice.

By taking the time to develop the reports to run automatically in a group’s PMS, the administrator can zero in on the areas driving denial rates and take the appropriate actions to eliminate these at the source. Most practices find that 80% of their denials are a result of 20% of the problems, so it is not an insurmountable task. Addressing this 20% can greatly improve the entire revenue cycle and reduce costly follow-up. While general feedback from staff regarding denial trends can be helpful, precise measuring of every denial enables data-based decision-making and root cause resolution.

Creating a stronger connection

Medical group practices have substantially increased telehealth utilization to provide vital services to their patients, including general disease management, post-surgical follow-up, medication and mental health counseling, wellness visits and other routine care functions. At the start of the pandemic, the U.S. government took action to remove barriers and encourage telehealth visits. So long as this support remains — reimbursement included — patients and providers can continue to reap benefits from safe, secure and convenient telehealth services.

Many providers have found they can see patients expeditiously and maximize scheduling blocks and capacities with the new flexibilities remote care brings. By accommodating more patients in a day and/or expanding to evening and weekend hours, there is greater opportunity to increase volume and revenue — especially when a telemedicine platform is smoothly integrated with EHRs and PMS for maximum efficiency.

Providing seamless, convenient telehealth care is just one means of staying better connected to patients. Group practices are most successful when they provide intuitive, user-friendly and function-driven digital experiences. Well-designed portal tools and text communications enable a self-service culture in healthcare that patients regularly use and appreciate. Engaged patients can simply message providers, request prescription refills, change appointment times and pay bills more easily while the provider is simultaneously reducing administrative overhead. Keep in mind that the portal and practice management processes need to be well defined:
  • Bad debt is often tied to poorly executed billing statements, complicated online bill pay experiences and unsatisfactory portal performance.
  • Statements — whether emailed or mailed — need to be clear and easy to understand.
  • Online bill pay should be clear and include the easy option of onetime payments that don’t require creating a profile and login.

Practices that generate engaged care experiences using these tools and follow RCM best practices — including insurance and demographic verification, timely charge submission and effective denials management — can facilitate prompt and consistent payment. As medical group practices face an uncertain 2021, these strategies are essential for a healthy revenue cycle.

Notes:

  1. Basu S, Phillip RS, Phillips R, Peterson LE, Landon BE. “Primary Care Practice Finances In The United States Amid The COVID-19 Pandemic.” Health Affairs. 2020, 39:9, 1605-1614.
  2. Ibid.

About the Author

Craig Adkins
Craig Adkins
Vice President, Revenue Cycle Management AdvancedMD

Craig Adkins can be reached at craig.adkins@advancedmd.com.

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