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Optimizing RCM to Improve Revenue Cycle Efficiency

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Kevin Cook

February 5, 2021 9 min read
Optimizing RCM to Improve Revenue Cycle Efficiency

What Are You – a Dentist or a Business Owner?

Every dental practice is a care-giving institution. Every dentistry is also a thriving business enterprise. So the decision-maker at every dental practice is torn between the diverse responsibilities of being a caregiver and at the same time running the revenue show. But when a conflict of interest arises between the caregiver and the profit-maker role, how does the ball roll?

A recent study by the American Dental Association finds that more than 80% of dental practices are owned by dentists. When s/he is experienced and trained in the caregiver role, not much education goes into running a business as practice owners and this lies at the core of revenue management issues at the dental practice.

What to Prioritize – Increasing Production or Optimizing Collections?

More often than not, most of the practice effort for improving finances are focused on increasing overall production through new patient acquisition, patient churn reduction, and better acceptance rates. While all of these are essential for the financial stability of your practice, the first thing to be ensured before going in for the numbers is that you gap the plugs on your leaking purse.

“40 percent of providers fail to collect more than $31,713 a year from patients”

Be it a solo practice or a multi-location DSO, an improvement in production numbers may not always end up as money on the table. So where is your hard-earned money stuck at?

Knowing your cash flow pipeline and its bottlenecks remain foundational to laying a sustainable revenue cycle strategy that can maximize collections from the current production. And that in turn is your first step towards ensuring sustainable practice growth and financial freedom for your practice or group. 

The theory part of it looks simple and straightforward, but when it comes to implementing any RCM strategy, it’s an uphill task for the billing team and an administrative headache for the practice owner.

The Collection to Burnout Equation

Without a doubt, managing billing and collections creates the maximum professional burnout at the dental practice. The redundant and mundane work of sending claims, posting EOBs, appealing denied claims, communicating denials and rejections to frustrated patients may not be something your team might have signed up for. 

More than 80% of dental providers reported experiencing burnout due to emotional fatigue and the depersonalization of dental care.

As optimal cash flow management is central in determining the financial viability of the practice, it becomes imperative for the practice owner to push the billing team to deliver better in terms of volume of collections and claim approvals. So does financial success always come at the cost of staff burnout? Not really.

Improving cash flow by streamlining claims management and fast-tracking collections is not just another operational improvement for your thriving practice. Revenue cycle management has significant spillover effects in every other segment, so much so that when you plan to optimize, think of the bigger picture and have larger expectations. So, how much do you stand to gain by revamping your cashflow pipeline and optimizing revenue cycle efficiency?

Is that too much to expect from a single operational change? No. The revenue cycle is intertwined with every other aspect of the practice so much so that optimizing it is your cheat code to unlock multiple possibilities for a better-managed practice.

Knowing Where to Start – Claims & Patient Collections

Let’s start with the basics. The revenue workflow at a dental practice starts with every treatment completed and ends when the total receivables reach the practice account from the insurance carrier and the patient. Optimizations can happen only when bottlenecks at each of these revenue streams get identified and detailed.

The Pursuit of Clean Claims

Improving your claims process improves the profitability of your business. But, in traditional revenue workflows the claims submission process is heavily dependent on manual work by the front office or billing team which can result in:

As a result, practices generally spend an overwhelming amount of time, money, and resources in claim management and still barely manage to keep alive, the cash flow.  A cursory glance at the numbers is sure to send the chills:

That means, writing off just one denied claim can end up as thousands of dollars lost to net revenue. Optimizing claims management for improving cash flow is no rocket science, but as always, the devil is in the details.

The Life Cycle of a Claim

A dental claim is just a way to formally communicate and keep track of services and procedures being availed to the patient who is covered by the carrier. A typical claim form will contain information about the patient, provider, payor, the set of procedure codes completed, and other particulars.

The claim has a Do-Repeat-Die policy in terms of its maturity. It may either:

In a typical dental practice,

IF ALL GOES WELL:

THE LOOP OF REWORK:

“Not following up on claims denials is like leaving money on the table”

The claim is denied and sent back to the practice. What does this mean and what can be done?

DEATH BY REJECTION:

The claim gets rejected due to missing or invalid information required in order for an insurance carrier to properly process a claim. A rejected claim is never entered into the payer’s adjudication system. As far as the payer is concerned, that claim doesn’t exist.

A claim can get rejected:

  1. At the clearinghouse
  2. By the insurance company

At the clearinghouse, rejections typically include payor information that the clearinghouse builds into edits to prevent claims from reaching the payer and rejecting it there.

The final stage of rejection occurs at the payer. This happens mainly due to eligibility verification issues that could have been completely prevented by performing eligibility checks before the time of service.

So, submitting clean claims means the claim spends less time in accounts receivable, less time at the payer, is accepted by the payer, and the provider gets paid faster.

Cleaner Claims – Surest Way to Financial Success

The inability of a dental practice to send clean claims results in significant consequences to a practice’s revenue and cash flow. With an average claim denial rate of 4% in the first submission, the extra amount of work the practice has to put in, in terms of staff effort and money drains the practice financially.

Coming back to the practice, the most common reasons for claim denials are human-errors like coding mistakes, missing modifiers, inaccurate eligibility checks, etc that happen due to repeated manual work.

“Organizations are struggling because they have so many claim denials that require devoted efforts. Beyond just the financial impact of denials, the rework of denied claims prevents organizations from being able to be more successful in their revenue cycle and even in their work with patients because they have to keep addressing this issue.” – Jim Lazarus, Managing Director, Revenue Cycle Strategy & Innovation

RCM optimization in terms of handling the dull redundant work of sending cleaner claims can be ensured only by automation. That means, having an efficient practice management software that can validate fields and scrub claims before they go out, thus minimizing the chances of a claim being denied.

Maximizing clean claims rate and minimizing the write-off rate at the practice can:

  1. Boost the first-pass acceptance rate.
  2. Reduce claim rework and associated billing tasks.
  3. Save valuable staff time that can be spent with the patients.

Improving Patient Collections

If claims management is all about ensuring cleaner claims and eliminating human errors, when it comes to collecting the patient portion, the biggest challenge is to just ask. Simple as it may seem, many providers find it so difficult to put forth the fee charged to the patient and miss the opportunity to get it paid at the first instance.

Why does this happen? The reasons are many:

Even when the reasons seem silly enough to be a blocker for getting the much-needed cash to keep your business running, these problems are rampant across the industry. So what is the way out?

How do you optimize patient collections and ensure it doesn’t reach the aging buckets?

1. Creating a payment request guideline that defines:

2.  Giving options for:

3. Improving patient communication: 

“After an account ages more than a year, the practice loses more in efforts to collect the dues than what the patient has owed”

4. Prompt follow-through:

Leveraging Software for Optimizing RCM

There is no second question regarding the need to clean up your cash flow pipeline for maximizing revenue cycle efficiency. But, how to leverage technology in the process while ensuring a smooth transition for your billing team is the central question that needs to be addressed.

So, when adopting an integrated software to solve your revenue management bottlenecks, go back to the drawing board and define the expectations before making the jump. Make sure your solution helps you in:

Optimizing revenue cycle efficiency:

Optimizing your revenue cycle means looking for opportunities across your entire enterprise – from clinical to administrative to billing efficiency, a practice that’s efficient in all of the pertinent areas of the office is the one that is best positioned for success. By combining modern technology, effective processes, and expert billing specialists, any practice can effectively optimize the payment cycle and increase collections.

Making it easier for your staff: 

Implementing technology means incorporating automation into important workflows. By doing so the staff can avoid wasting time on redundant tasks like phone call follow-ups, mailing out statements, etc, and ultimately, it speeds up the revenue cycle. Instead of focusing on mundane tasks, your staff can now focus on – patient care and practice efficiency. 

Collecting more and collecting faster:

Speeding up the collections workflow reinforces your revenue plans and growth forecast and helps you place your practice in the growth trajectory. An RCM software that assists pending payment follow-throughs and takes over claims-cleanup can gear up your revenue stream and ensure that your practice is positioned comfortably w.r.t financial freedom.

Where does CareStack meet you in the process?

CareStack with its cloud-based, all-in-one management paradigm brings to the table an integrated RCM package designed to optimize cash flow at every step of the patient journey and ensure maximum revenue cycle efficiency.

“Our days in A/R dropped by more than 30%, and our net collections increased just after the first 3 months of using CareStack.” – Dr. Himesh Kana, Dental Depot

CareStack packs dedicated features designed to integrate and centralize billing operations to enhance streamlining of your billing and collections, and also accommodate quick scale-up and expansion plans that you have in mind.

Centralized Billing Office Settings

With, Centralised fee schedule management that simplifies the assignment of schedules at multiple locations, Insurance Billing Rules to cross-verify claim completeness, and Automation settings to set up enterprise-level rules for claim scrubbing, submission, denial management, patient notification, etc, CareStack steps up the game to help your practice hit the next level of growth

Streamlining Pre-Visit Tasks

With CareStack, make sure that when the patient arrives at the practice, your front end staff is already equipped with complete information regarding his/her insurance status with:

End-to-End Claims Management

Free up your billing team from endless claims cleanup and rework processes with a complete claims management system that minimizes errors and boosts up your first-pass acceptance rates.

Streamlining Collections

“61% of the patients want to pay all their bills in one place”

Help your patients pay with multiple options of payment and bring down the days in A/R by prompt follow-ups with:

RCM as a Service

CareStack can also help manage your billing services. With dedicated RCM specialists to augment your back-office team and reduce administrative burden, leverage your practice performance with your staff freed up for productive clinical and other functions.

 

 

Blog User

Kevin Cook

VP, Customer Experience