4 Areas Where Strategic Improvements Will Enhance Sleep Medicine Revenue
For these purposes, let’s define the lifecycle as twofold: 1) patient access, including prior authorization and insurance verification, coupled with 2) RCM—coding, billing, A/R management, and insurance discovery. By examining RCM’s key functions, we can determine where maximum efficiency could be gained, and previously lost or delayed revenue could be captured.
Let’s look at four RCM components and their inherent issues:
1. The Medical Coding Process
Since its release in October 2015 and the myriad subsequent changes and updates, the ICD-10 coding system presents a multifaceted and intricate set of issues, especially for a specialty that utilizes different care venues (practices, hospitals, outpatient centers) and complex diagnoses and procedure options.
Primary care providers, seeking to improve patient care and outcomes, are finding more opportunities to use sleep medicine early to benefit the patient. This, in turn, creates growing problems for insurance payers who are trying to contain costs and ensure medically sound and appropriate patient care is being delivered.
Once a patient is seen, the first step is to determine the accurate codes and service levels. However, whether it’s due to lack of time or chart completion expectations, procedures and testing are often under coded, miscoded, documentation is missing, or service level is misclassified. This causes severe problems that impact revenue, including denials, underpayment, and abandonment of claims.
2. The Medical Billing Process
One of the most significant pain points for sleep medicine groups is projecting the billing process workflow and the inability to scale for the fluctuating workload. Everything can be either overloaded or slowed to a crawl based on staffing within the billing department, from charge entry to payment posting.
Staffing issues from unexpected changes in employment status, family leave requests, and hiring mis-queues can create bottlenecks that slow down claims processing and impact bottom line revenue. This creates further problems with ancillary responsibilities, such as resolving credit balances and managing contract performance to aid future negotiations.
3. A/R Management
At a recent healthcare business management symposium1, a study accepted industrywide by the Medical Group Management Association (MGMA), estimates the cost to rework a claim that has been denied by insurance is $25.00 for each occurrence. And even more impactful is the fact that between 50% and 65% of denied claims go unchallenged due to lack of time and/or understanding on how to proceed with the revenue thereby lost completely.
In healthcare’s complicated and administratively burdensome accounts receivable process, managing the unpaid or rejected claims can be incredibly frustrating for billing staff. Not only does it create large blocks of unproductive time while staff members sit on hold or wait in insurance payer queues, but there are often limits on the number of claims that can be submitted or questioned during each call.
This manual process is estimated to cost $10.13 and take 12-20 minutes per claim, according to the 2020 CAQH Index. It takes valuable staff time away from higher-value billing functions or improving the overall patient experience. By automating the claims management process, a solution can ensure an average savings of $7.72 per claim while saving valuable staff time and lost opportunity to be redeployed to more meaningful functions.
4. Bad Debt and Collections
The most frustrating component of RCM is bad debt, and those accounts that must be reluctantly turned over to a collection agency for potential follow-up. These claims are often overdue because uninsured patients or unpaid self-pay accounts are being written off completely or categorized as charitable care. Bad debt can total as much as 15% of total receipts in today’s practices, and that number is sure to grow as patients assume more and more of the financial obligations for care unless something is done to curb this trend.