Revenue cycle management is a big catch phrase in healthcare these days.

In fact, billing companies now call themselves “revenue cycle management companies.” The key word here is cycle. The cycle starts when the patient schedules an appointment. It continues through the patient registration process, coding by the physician, claim submission by the billing office and the feedback from the rejected and denied claims.

If the feedback is not used to improve the process, it may seem more like a dead end than a cycle.

Often, you need to work smarter, not harder. A good way for managers to identify process improvement opportunities that can increase their revenue is to observe how your billing office submits claims and posts payments. Making sure these processes run as efficiently as possible can smoothe the path to faster reimbursements.

You can start by reviewing a few of your Medicare remittance advice (RA) reports. For the most part, if you understand Medicare billing rules and regulations, you will get paid appropriately by Medicare. Other carriers may present more challenges, but typically Medicare rejections and denials are due to practice billing errors. Identifying these errors and implementing process improvements is a great starting point for improving your bottom line.

If you can identify and fix flaws in the Medicare billing process, you’ll improve the revenue cycle for all payers.

Maximize the Technology Available to You

Start by observing the claims submission process. Is your office using your practice management (PM) software to its full potential?

Many software programs and clearinghouses have tools that allow a practice to “scrub” claims to ensure that a clean claim gets sent to the carrier the first time. Some of this functionality may need to be customized to your practice.

For instance, if your Medicare Administrative Carrier (MAC) has a local coverage determination for optical coherence tomography (OCT), then you should program your system to alert your billing staff when a claim is created with a noncovered diagnosis. This would allow your billing office to review the medical records to verify the reason for the test and correct the diagnosis if necessary. You can also determine if an advance beneficiary notice (ABN) was obtained if the test was performed for a noncovered diagnosis.

Monitor Rejected Claims

Next review the clearinghouse acceptance and rejection reports and the carrier acceptance and rejection reports. Your billing office should be reviewing these daily. Every claim submitted should create an acceptance or rejection confirmation report. Reasons for rejections include missing or invalid information such as an unspecified or changed ICD-10 diagnosis or an invalid or new technology CPT code, or a portion of the patient demographic is missing or incorrect, such as date of birth or zip code. A high level of demographic rejections would highlight training needs in your call center or registration desk, while CPT or ICD-10 issues would highlight a need for coding and reimbursement training.

If you identify rejections that have not been corrected, you have a problem in your billing office. The carriers do not issue remittance advice for rejected claims. If the reports are not addressed and the claim is not resubmitted in a timely manner, the claim may become uncollectible. Rejected claims are not entered into a carrier’s claim adjudication system– left uncorrected, you essentially have no claim on file.

Rejection reports are available through your clearinghouse. Your billing staff should download and address these reports daily. You would be surprised how many times offices neglect this step in the process.

Analyze the Root Cause of Denied Claims

If you effectively use the “scrubbing” technology available through our PM systems and clearinghouses, you could reduce your denials. Unfortunately, you can never eliminate all denials. It is critical to understand the nature or root cause of your denied claims.

If you post denials with the appropriate denial codes, your systems may be able to produce a root cause report. Denial reason codes and RA remark codes are very important. For an explanation of standard reason codes, see http://www.wpc-edi.com/reference/.

A root cause for denials includes the following:

• Eligibility
• Coordination of benefits
• Referral/authorization
• Medical necessity requirements not met
• Investigational/experimental service
• Frequency of service exceeded
• Global period denial

Each of these denials highlights an opportunity for process improvement.

Denials because of eligibility, coordination of benefits and referral/authorization can be minimized, if not eliminated, by consistently checking eligibility and referrals before the patient arrives. The best practice is to collect all demographic and insurance information when scheduling an appointment. Verify benefits and retrieve necessary referrals and authorizations.

If coverage or benefit issues are identified, they can be addressed before the patient is waiting in the office to be seen. Patient copayments and deductibles can then be collected at time of service.

Medical necessity, investigational and frequency denials usually indicate that an office should review coding and documentation issues. Another way to identify such issues is by sorting the accounts receivable by insurance carrier and CPT code. This will highlight frequently denied CPTs.

If, for instance, you have numerous denials for a specific CPT code, review the diagnosis codes which led to those denials and review the covered diagnoses listed in the Academy Ophthalmic Coding Coach or on the carrier’s coverage policy website. Often, coding education can minimize these types of denials. In some situations, it may highlight the need to implement the use of ABNs or a Notice of Exclusion from Health Benefit (NEHB) forms for specific diagnostic tests and/or procedures. It may need to be performed for reasons outside of the typical coverage guidelines.

Global period denials and/or modifier denials may highlight the need for coding and reimbursement training for the physicians and support staff who enter charges. 

If denials are tackled one by one with no management reporting feedback to the front line, your billing staff may become frustrated and confrontational with the staff on the front end of the revenue cycle process. If, however, if you analyze the denials and inform management about staff and highlight training needs, revenue will increase, and the work effort required overall will go down. 

Conclusion

Next time your accounts receivable start to climb and your billing office requests additional staff to handle the work load,, review your revenue cycle process. Although some billing offices may truly be understaffed, many just need to learn to work smarter.

Remember, Medicare billing is the easiest. If your Medicare accounts receivable takes more than 30 days to collect, you should be able to quickly identify process improvement opportunities that will increase your revenue from all third-party payers and reduce your time doing it.  

About the author: Sara Burns Rapuano, MBA, CPC, OCS, COE is an ophthalmology practice management consultant. She has more than 20 years of experience at Wills Eye Hospital in Philadelphia working with physician practices as well as ambulatory surgery centers (ASCs). In addition to the day-to-day financial and operational management issues, she is experienced in implementing practice management software and electronic health records, medical coding and compliance, third-party payer contracting and medical practice consolidation. She has lectured both locally and nationally on operational and reimbursement issues.