The Benefits of Having a Revenue Cycle Blueprint

On 5th Feb 2019
rcm blueprint

When your office space no longer fits the needs of your business you have two choices; renovate the floor plan or move. The same is true of your revenue cycle management (RCM) system. When it no longer fits the needs of your healthcare organization you have two choices; fix the one you have or buy a new one. Finding an RCM solution that delivers a blueprint for continual growth, rather than a static map for the status quo, is the answer.

The changing healthcare landscape requires agility. Your organization must be able to meet shifting reimbursement regulations and payer contract terms to capture revenue. As the number of providers and services in your practice or hospital increase, so do the number of contracting terms you have to manage and track. Keeping up with them is the only way to obtain full contracted reimbursement and better healthcare denials and underpayments management. Yet, that can be daunting for staff already burdened with steadily increasing documentation for payers. That’s where a custom RCM solution with robust contract management solutions comes into play.

A blueprint for RCM success

The best RCM systems offer contract modeling, payment recovery options, improved collections, and revenue recovery from denials and underpayments. They readily identify underpayments and flag them for immediate action. They improve healthcare denials management and facilitate timely appeals. That’s the definition of systems that protect your best interests and your bottom line.

If you are questioning whether your RCM system is protecting your bottom line, it’s time to conduct a quick assessment. Begin by asking the following questions:

  1. What is your percentage of co-pay collection at time of visit?

  2. What are patient outstanding balances?

  3. What is your aging rate?

  4. Do you regularly pre-authorize and verify patients during the registration process?

  5. Is someone responsible for reconciling charges to visits?

  6. Are claims submitted in a timely manner?

  7. Do you have a system for making sure they are complete before submission for better healthcare denials management?

  8. Is there a system for reviewing payments according to contract terms?

  9. Do you know when, and why, underpayments are received?

  10. Are denials appealed regularly and within the payer’s appeal window?

  11. Do you have a collections process?

The answers will give you an initial understanding of how well you are collecting revenue. However, you may also need to conduct a formal audit of your RCM process.

Once you have gauged the efficiencies and deficiencies of your RCM system, you can determine the most effective replacement and/or upgrade. Just like a blueprint will show you how to best organize your office, a great RCM system will show you how to organize RCM operations to capture every dollar. The custom application of RCM systems will most economically address your needs:

  • Full service: no cost unless your claims are reimbursed with full transparency

  • DIY: an intuitive payer contract modeling and management SaaS that runs a complete underpayment & denials management system

  • Hybrid: No cost unless claims are reimbursed, then switch to DIY when you are ready

Contract management is essential

One of the most essential components of any RCM system is contract management. The philosophy is simple; if you have spent valuable time negotiating the contracts, why not ensure payers are living by the letter of the contracts? Unfortunately, the reality is much more complex.  

The average healthcare organization can have hundreds of contracts, each with a myriad of different details including timelines, qualifications, forms and claims requirements.Those details can change over time, either through payer mandate or contract negotiation. Keeping up with them, and making sure payers comply, is a mammoth task for even the most ambitious and skilled finance department. The devil is in the details and in this case, the devil can result in underpayments and denied claims.  

Consider this; across the healthcare industry, seven to 11 percent of claims are underpaid. It costs an estimated $25 to appeal every claim. It doesn’t take long to do the math and see what that is costing your organization. It’s also an indication of the value of contract compliance to identify and claim underpayments and appeal denials.

Healthcare IT News reported on how one large healthcare system saved millions of dollars just by addressing underpaid and denied claims. The $2.5 billion health system was losing more than 5 percent in underpaid and denied claims. The site reported, “The health system decided to become proactive in focus and process integration. They were able to deliver over $40 million to bottom line recoveries and add sustainable process improvements that led to over $15 million annually.”

The secret sauce - capturing underpayments

One of the most important features of any contract management software is the immediate identification of underpayments and denials. It should integrate powerful calculators that pre-calculate the expected payer reimbursement and compare that amount to the payment processed by the payer. When it can accommodate all types of complex reimbursement rates and incorporates various qualifiers per calculator, you have the facts you need to immediately identify, and appeal, underpayments and denials. When you have the right data, you have the power to capture contracted revenue.

Contract management software is a simple way to identify and overturn wrongful underpayments and denials by:

  • Generating on-demand, detailed payment variance reports that compare the expected plan allowable to the amount that was paid by the payer — whether it was billed electronically or by paper

  • Keeping your current claims management workflow while adding auto-calculated underpayments and denials to boost your net patient revenues

  • Modeling any payer contract type

  • Handling all contract modeling, updates, rate tables and more

When it comes right down to it, what do the best RCM systems provide? 100 percent payer collectibility. That’s the bottom line. You deserve nothing less. When you deliver the care, you should be paid for it. When you contract for it, you should receive it in full. It’s time to implement an RCM system that will give you absolute control over payer contracts and eliminate underpayments and denials.