4 Areas Where Strategic Improvements Will Enhance PT and OT 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 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 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 points for physical and occupational practices can be projecting the billing process workflow and the inability to scale for the fluctuating workload quickly. From charge entry to payment posting, everything can be either overloaded or slowed to a crawl based on staffing within the billing department.
Staffing issues from unexpected changes in employment status, family leave requests, and hiring mis-queues all 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 in future negotiations.
3. A/R Management
At a recent healthcare business management symposium2, a study accepted industry-wide by the Medical Group Management Association 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 complex and administratively burdensome accounts receivable process, managing the unpaid or rejected claims can be especially 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 2019 CAQH Index and takes valuable staff time away from highervalue billing functions or improving the overall patient experience.3 By automating the claims management process, a solution can ensure an average savings of $7.72 per claim while also saving valuable staff time and lost opportunity 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 of uninsured patients or unpaid self-pay accounts and end up 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.