05 Sep 3 Most Common Causes for Revenue Leakage

The healthcare landscape in the United States of America is dynamic and continues to evolve with every passing day. The ever-changing regulations bring along new scopes of revenue loss for healthcare providers that range from billing errors to untrained staff to poor management. Due to such challenges, it is becoming increasingly difficult for healthcare providers involved in revenue cycle management to receive the due benefits for their issued services and care. The only way practices can maintain their business is to control costs and minimize lost reimbursements.

Want to learn about the three most common pain points of revenue leakage in the healthcare sphere and learn about ways to plug those leakages?

Front Desk Inefficiencies

Your front desk staff is at the forefront of your revenue cycle success. From a revenue cycle perspective, getting the most accurate information up front starts with patient scheduling and registration since it provides the groundwork by which claims can be billed and collected in the most efficient and effective manner possible. Your front desk staff takes patient appointments, enters patient demographics, and, most importantly, enters and updates patient insurance information into your PM system. Therefore, it is responsible for knowing how to adequately capture patient data and translate it into successful insurance claims.

If your front desk staff is not thoroughly trained, it might not capture patient data accurately or fail to send bills correctly. Often, the billing team identifies the correct insurance payer but ends up attaching the wrong insurance plan to the patient’s account or forgets to verify the insurance and check for changes. All of these simple errors can lead to denied claims and lost revenues.

Solution

Problems at the front end of your revenue cycle can create havoc downstream. According to a recent study, every 8 out of 10 patients in the U.S received incorrect bills due to coding mistakes. Coding errors can equate to denied claims, which causes unnecessary spending and rework. To prevent such havoc, conduct a proper training session for your front desk staff to learn how to code effectively. While training might seem costly and time-consuming, it can save your practice money in the long run, as well-trained staff will likely commit fewer billing errors and make the billing process more efficient.

In addition to conducting training workshops, regularly review and update your front desk policies and procedures with downstream revenue cycle implications strongly considered. You will be surprised to notice how a few straightforward fixes upfront can positively impact your revenue cycle success. Once improved, monitor your front desk performance empirically by RCM dashboard reporting. By consistently tracking denials caused by front desk errors and omissions, you can permanently fix this aspect of revenue cycle leakage from your practice.

Poor Claims Management

Pursuing claims is a strenuous and labor-intensive process during which you constantly keep yourself asking questions like ‘How many appeals am I winning?’ or ‘How many of my denials are going unresolved?’.

You need to closely monitor the claims management process at every point of its lifecycle to ensure revenue cycle success for your practice. If you do not watch claims closely, you will not be able to identify denied claims and refile them promptly, which will consequently lead to a loss of revenue.

In most billing settings, the majority of the claims denials and initial EOB denials (zeroes) are worked at the clearinghouse level. However, over 60% of higher-complexity clinical denials go unworked. Claims with no payment or denial by payers and appeals filed on denied claims without a timely payer response often result in write-offs and can negatively impact your practice’s cash flow.

Most systems that track insurance denials have no set method to track claims that are neither paid nor denied. More often than not, a claim goes out, the days go by, and nothing comes out of it. It is not until the appearance of that claim on an Aging Report 60 or 90 days from the date of service that the healthcare provider gets to know about its existence. Due to the inability of most denial management systems to catch this category of lost revenue, these claims are often first identified when they are untimely, giving insurance companies the opportunity to deny paying them ever. A significant number of denied claims in this category can deal a deathly blow to any practice’s revenue stream.

Solution

It is imperative to dedicate specific staff resources to claim management, especially the denial management process, and develop detailed protocols to stop revenue leakage from this aspect. A streamlined and efficient claims management process can improve revenue collection and help a practice run smoothly.

Also, pay attention to the reporting offered by your software system. Ideally, a reporting package containing all the required content obtained at the end of each month can help smoother down the claims management process. You can also program a customized set of monthly reports from your software database, dropping that data into a dashboard system for later use. This way, even if your software system is unable to produce effective reporting, you can extract it from your software database yourself.

Poor Patient Collections Management

Healthcare providers can no longer make ends meet by only collecting payments through medical claims from insurance companies. With the trend toward high-deductible benefit plans rising, patient balances make up an increasing percentage of total claim reimbursements for all practices. Therefore, every healthcare provider must manage and collect patient balances duly to boost overall revenues.

However, mastering the art of collecting the maximum revenue at the point of service is not easy. A recent survey tells that 85% of medical facilities find collecting payment from patients at the time of service a very difficult task. Healthcare providers who allow patients to leave the care setting and send statements later are 20% less likely to collect. As patients become increasingly responsible for out-of-pocket costs, healthcare providers need to ensure that they are not leaving uncollected revenue on the table. Inattention to the billing process can shock both patients and medical facilities with bad debt.

Solution

Medical facilities must develop a better understanding of patient responsibility and devise more streamlined payment collection methods if they plan to maintain financial stability in the quickly changing healthcare landscape. The conversation with the patient has to start early – at or before the point of service – if practices are to reduce the amount of bad debt they are currently experiencing.

Implementing an effective patient statement and delinquency letter protocol can help ensure payments are received without delay. It is good practice to include effectively designed workflows within your billing process – moving to electronic statements and incorporating patient payment portal and credit card payment functionality. Employing an efficient and well-trained medical billing staff that provides premium customer service by taking patient phone calls to answer billing questions and providing payment plans for patients struggling with medical bills can also prove beneficial. Lastly, hire a professional collection agency to work unpaid patient balances that are otherwise left unconverted.

Plug Revenue Leakages With Sypore

If you are struggling with revenue leakage, you may wish to consider outsourcing your revenue cycle and accounts receivable management to help cost-effectively capture lost revenues. Partnering with an RCM company like Sypore will allow you to focus on delivering premium care by easing your RCM burdens and discovering untapped opportunities for revenue generation.

For the past 10 years, Sypore has been a leading provider of outsourced RCM and payor contract management services in the U.S. We leverage our decade-long experience and arsenal of resources to identify the main sources of revenue leakage from your practice. From conducting financial reports revealing weak points to implementing holistic workflows, Sypore offers insight and services that can significantly minimize the chances of revenue loss. Contact us today to see how we can help!