All successful home health agencies must generate revenue in order to pursue their mission and grow. Yet, it’s not enough to just generate revenue; your agency must also collect the revenue while minimizing leakage and potential lost dollars.
That’s where RCM comes into play. RCM is the process to track client revenue from intake through collection of accounts receivable balances. The cycle includes the universe of administrative and other functions in a home health agency that contribute to the capture, management and collection of patient service revenue.
If you seek ways to boost profitability and enhance outcomes, optimizing RCM is a prime place to start. In this spirit, consider six best practices that we at Richter advocate for home health clients throughout the U.S.:
Best Practice #1: Optimize the RCM process through review.
When your RCM function runs smoothly, everyone can keep their focus squarely on doing what they’re supposed to do to ensure optimal outcomes. Yet, even a smooth process may not be an optimal process. Opportunities for improvement are present within processes far and wide.
Therefore, Best Practice #1 is to review elements of your RCM through a critical lens and pursue improvements where they are needed—and in cases where it’s practical.
It is not necessary to pursue a systematic review of all RCM processes. You can start with a process you have identified as a concern and ask yourself and your team:
What specifically are the shortcomings of this process?
Are there any elements of it that are working and should be kept?
How could it be restructured or replaced to increase efficiency and productivity?
Are there additional ways to enhance it to minimize or eliminate mistakes?
If we adopt it, and it does increase efficiency and productivity, what could we empower our people to do with some newly found free time?
Overall, you should take a critical look at the lifecycle of the claim to really understand where your pressure points are; where weaknesses exist; and how to identify and address those weaknesses. In the end, your home health agency will benefit from a top-down review of all processes that impact RCM.
Best Practice #2: Apply the right technology toward strategic ends.
It may seem obvious in the second decade of the 21st century to use technology. But in the home health industry, barriers to effective technology run deep, and two primary factors are driving it:
Systems designed and used in silos. Technology for home health providers – and in fact, healthcare providers in general – often is a euphemism for “different systems”—and that causes difficulties on many fronts. Distinct billing systems are designed to operate separately, and while some integration exists, they’re the exception, not the rule. Consequently, distinct skill sets are required for each technology solution, and valuable time often is wasted managing data or transferring it manually from one system to the next.
The drive toward automation. Many home health agencies still perform many revenue cycle tasks by hand and continue to resist automation, arguing that costs associated with acquisition, integration and training are too high to bear. That said, some industry watchers estimate that up to 80 percent of long-term post-acute care (LTPAC) billing and financial work flow will be automated within the next several years. Home health agencies must take notice, and take action.
Indeed, automation is here; it’s being utilized by organizations across the healthcare spectrum – home health agencies included – and it will be a crucial driver of RCM at every stage of the process in very short order. If you haven’t yet optimized automation within your RCM work flow, it’s time to begin. By automating selected RCM processes effectively and putting the right people in place to ensure quality control, your home health agency can operate more efficiently and profitably; employees will be more engaged in meaningful work they actually enjoy; and patients/clients and their loved ones will receive timely and relevant information they need.
If there’s one lesson here, it’s this: Utilizing technology can boost productivity—not replace it. We encourage you and your colleagues to investigate it and visualize ways that it can positively impact your RCM process.
Best Practice #3: Leverage Key Performance Indicators (KPIs) and Meaningful Metrics
KPIs and metrics help home health agencies elevate their scope of vision above the weeds and see the bigger picture. The first step in utilizing these tools is identifying what it is that you want to learn. Are you interested in looking at payers based on assessment scores, denial issues or other metrics? KPIs and meaningful metrics can help deliver the insight stakeholders need to draw smart conclusions and truly understand the cost to collect on each client or claim.
KPIs in the home health realm are based on acknowledged best practices and are common among providers. As far as metrics go, they are wonderfully customizable, so you can assign whatever values add context and meaning for your enterprise (so long as the comparison is internal, and not based on performance relative to other providers).
Whatever metric helps you make informed decisions, that’s a good metric for you and your RCM process!
Best Practice #4: Embrace change management.
The term “change management” means many things to many people and organizations. Broadly speaking (and as the name suggests), it covers an array of methodologies and processes that prepare and support change. For RCM leaders in home health agencies, successful change management is all about making sure that the process is documented and managed effectively using established methods.
You can utilize change management to improve or enhance a process, a step within a project or an initiative. Your efforts can be targeted toward small-scale improvements, or enterprise-wide change; but in all cases, you’re preparing and equipping the people on your team to understand and have a stake in the updated process. Whatever your change management goals may be, effective change management positions your revenue cycle function – and ultimately, your entire enterprise – ahead of the curve in a constantly evolving home health landscape.
Change management doesn’t have to be complicated. Just by looking at any variable within your revenue cycle process through careful review (see RCM Best Practice #1), you’ll be able to recognize whether something is working properly, or what steps need to be revisited. You can take steps to implement both a project plan and a formal process so that you’re not just changing it for change’s sake, but rather, optimizing it over time.
It’s also important to instill a philosophy of continuous learning into your change management practices. Just putting a plan and a process in place isn’t enough to ensure that positive change occurs over time. You need to monitor and evaluate progress, benchmark it against KPIs and meaningful metrics (see RCM Best Practice #3) and document everything so that intellectual capital gained through change management doesn’t reside solely in one person’s head.
Best Practice #5: Ensure that all face-to-face encounter requirements are met.
A face-to-face encounter requirement was established by the Affordable Care Act (ACA) for certification of eligibility for Medicare home health services. This requirement compels a certifying physician to document that he/she, or a non-physician practitioner working with the physician, has in fact seen the patient—hence the name face-to-face. This face-to-face encounter must occur within the 90 days prior to the start of care, or within the 30 days after the start of care—and documentation from the actual visit must be retrieved and included in the agency’s medical records. Additionally, the visit date must be present on the patient’s certification. Therefore, to optimize your agency’s revenue cycle, it’s imperative to ensure that your face-to-face process complies with required timing, documentation and other mandates. Some home health agencies struggle with obtaining face-to-face encounters in a timely fashion; others obtain them incorrectly. In either case, denials are the result, so take every measure you can to get it right every time.
Best Practice #6: Ensure timely follow-up on denials
Denial management is critical for the proper management of Account Receivable balances. It ensures timely follow-up on outstanding accounts and reduces time spent on unnecessary appeals and claim resubmissions. A denial is a claim that an insurance company or fiscal intermediary refuses to pay due to a failure to comply with payer billing guidelines. Denials can be broken down into several categories:
Each category can require engagement from different departments to resolve the issue. For example, a missing authorization can be due to failure to obtain authorization at the time of admission; failure to manage and follow up on an expiring authorization; or traceable to services provided not matching the authorization. This denial starts with intake; however, the clinical team may need to get involved in order to obtain the necessary information in a timely manner.