Failure to Thrive – What’s Happening with Your Revenue Cycle?
December 12, 2013
When a patient presents and is not doing well, we use a “Failure to Thrive” diagnosis if there is no discernable cause. Ever have that feeling about your billing and collections?
Do you know how well you’re doing at collecting your Accounts Receivable? How quickly do you get paid on a claim? What kinds of things are happening in your office that’s slow payment? What are the key performance indicators that you track to assure that your billing office is doing a good job?
It’s estimated that medical professionals spend more than any other industry to bill and collect for services they’ve already rendered to patients.
We have certified experts, complicated coding systems, and sophisticated software, and yet it remains an expensive and frustrating proposition just to get paid for the care you’ve provided for your patients. Frequently, offices entrust their entire cash flow to a clerical person (or team) who is paid $14-15 per hour. If these billers do not receive appropriate training, this can lead to a situation where thousands if not hundreds of thousands of dollars are left on the table.
One practice we worked with came to us with accounts receivable in excess of $833,000, Days in A/R that were greater than 73, and work queues of unfinished claims the needed follow up in excess of 600. Once we had worked with this client for a few months, the AR was down to a very manageable $186,000, days in A/R were 19, and the work queues were all current. This means the group had cash in hand, as opposed to it sitting at the insurance company, they were being paid faster for claims they had submitted, and they were much more effective at getting their work done and reducing rework.
Our work with our revenue cycle clients is focused on getting it right the first time: we always track percent of claims that are clean. Our goal is to get our clients paid as much as possible, as fast as possible. When a claim is denied on the first submission due to an error at the office, this slows payment, and creates additional expense in following up. With our continuous quality focus on registration, and our specialized work to create written workflow documentation for registration with all of our clients, we have been able to reduce the number of denied claims for our clients significantly. Again, this means the physicians get paid more quickly, and it costs them less to collect the money. We love it when everything works right the first time!
We recommend key performance indicators (KPIs) be developed for every clinic’s revenue cycle, as this is the lifeblood of the practice. Any billing service or business office worth its salt will have these, and will review them monthly, if not more frequently.
Key performance indicators we develop for all of our clients include:
- Days in Accounts Receivable as measured against MGMA national benchmarks
- Total dollars in Accounts Receivable as measured against MGMA national benchmark
- Percent of clean claims
- Payer mix
- Overall aging within the Accounts Receivable
- Coding patterns and distributions for high-volume CPT codes
Each of these KPI’s can be tracked and graphed for both a numerical and a visual output each month. These should be reviewed by leadership with the physicians on a regular basis. Any degradation of performance should be addressed immediately, so that cash flow is preserved, and your practice thrives.