When an organization reaches “panic mode” and is suddenly unable to make payroll, pay vendors and cover day-to-day expenses, the threat of a shutdown abruptly becomes a reality. In many cases these “fires” are temporarily extinguished without ever stepping back to look at the bigger issue at hand. To prevent such a catastrophe from recurring, a reviewable accounts receivable (AR) process needs to be established in every healthcare organization.
Although AR processes are just a sliver of an organization’s larger revenue cycle management, the state of a company’s AR is a direct glimpse into its financial health. When there is an issue with the AR process, it will undoubtedly leak into the revenue cycle and cause major issues with cash flow.
By conducting a regular review of your AR process, an organization can expect to achieve:
Since there are so many moving parts to the AR process, it can be helpful to break your analysis down into three primary categories: people, process and technology. Each of these must complement the other for your organization to thrive, and if one element is broken the entire system fails. Utilizing this framework and looking at each component individually, your organization will be in a better position to detect and address any malfunctions and inefficiencies.
Technology
Working a little backwards, let’s first discuss the importance of operating with the right software for capturing pertinent patient and claim information. Keep in mind that even if you are already operating with the best possible software for your unique organization, you may not be up to speed on its full capabilities. Since all software is not created equal and one may not be as intuitive as the next, it may help to ask yourself what you want your software to accomplish. Look at what may be accounting for a high percentage of errors, or soaking up a large amount of your staff’s work day. It may be possible to program your software to solve those issues for you—automatically.
Automation is one of the biggest factors to consider when reviewing the technology associated with your AR process. Any time you can establish workflows and reduce the level of manual entry required, you not only free up your staff’s time for other projects, but you also reduce error rates. This is especially important for healthcare organizations because data entry errors typically lead to rejections, which ties up your cash flow and causes even larger problems that could prevent you from hitting your revenue goals.
Process
The technology your organization uses is only as beneficial as the processes behind it that dictate how information flows. The goal of every healthcare organization is to minimize the time between when a claim is submitted and the payment is received. If claims are taking longer than 30 or 60 days to be paid, there may be an issue with your process. A thorough review will help you uncover any bottlenecks that may be slowing your recovery rates or preventing repayment altogether. Are there multiple touchpoints that could be avoided? Is there widespread confusion about a specific policy?
To ensure adherence to your established processes, policies must be documented and stored in a place that is accessible to the individuals responsible for their compliance. Additionally, measures must be taken to ensure processes and policies are reviewed and updated on a regular basis. For healthcare organizations, this review should be conducted on a quarterly basis (annually at a minimum) because some payers typically update their billing rules and/or rates within this time frame.
People
Even with the right technology and the perfect processes in place, the success of your AR cycle relies heavily on the people you employ to follow the established processes and understand the technology. Every employee needs to feel invested in the process and take ownership of their part in the cycle, whether it’s in the front office at admissions or at the back end where payments are ultimately collected. Employees are likely to be more accountable when they are privy to the organization’s goals and expectations, so be sure to communicate specific performance benchmarks. If those benchmarks continually fall short, assess whether the issue resides with the training and education of your staff before circling back to your process or technology.
If internal resources are already stretched too thin or a quarterly analysis seems too overwhelming, it may be time to consider outsourced help. Working with a third-party consultant such as Richter will provide your organization with an objective assessment to help identify pitfalls proactively. With extensive knowledge on best practices for your industry and geographic area, Richter knows how to ask the right questions to help you boil down to the heart of the issue—whether it may be with your people, process or technology.
Enhance Revenue Cycle Management Challenges With Richter
To learn more about how Richter’s Revenue Cycle and Reimbursement Consulting can help you enhance outcomes in your organization, contact us here.