Waste Not, Want Not: Improving Financial Efficiency

In a healthcare environment where high deductibles and rising costs are the norm, many practices have no choice but to do more with less. In their efforts to offer patients the best care possible, an overburdened office staff may overlook certain details—but financial efficiency shouldn’t be one of them. Now is the time to take a close look at your practice to target waste, before any money that has fallen through the cracks is lost forever.

Identifying Trouble Spots

Some areas of concern are obvious and relatively easy to fix—like over-ordering or other unnecessary spending. Others are more difficult to manage. When dealing with poor collection processes or lagging technology, for example, don’t be afraid to consider/explore outside help.

Here are six common trouble spots:

  1. Billing and coding . The medical billing process isn’t getting any easier. To make the process more efficient and protect your practice from loss, you need trained professionals. Outsourcing your billing is one way to eliminate waste—and it often leads to faster reimbursements and increased revenue. Revenue cycle management (RCM) companies focus on improving the billing process. Their tools effectively manage claims from submission to payment, resulting in higher reimbursements and better cash flow than most practices can achieve on their own.
  2. Claims processing.  You likely spend significant time and money in your efforts to get paid by insurers. According to MGMA, the average cost to rework a claim is $25, and it’s no secret that clean, error-free claims result in faster payment and fewer denials. If 96 percent of your claims aren’t clean, you can expect delayed payments, lags in A/R and lost revenue.   EDI services and clearinghouses play a critical role in sending clean claims. Their valuable features provide the sort of RCM intelligence that has a direct impact on revenue cycle efficiency. If your practice is struggling with aging accounts receivables and a growing list of denials, you should consider switching your medical clearinghouse.
  3. Collections. In many practices, not enough attention is paid to insurance payer follow-up, contributing to a growing accounts receivable list. Common sense dictates that you should make the collections process as easy as possible for your patients and your staff. That’s why more and more providers are offering online bill-pay portals and credit-card-on-file systems. The benefits include shorter payment turnarounds and installment-plan options. Tools like the Patient Cost Estimator promote price transparency, helping to eliminate uncertainty so practices can more effectively collect what they’re owed. Many tools can be integrated with existing platforms to make significant improvements in a practice’s collections performance.
  4. Staff. Carefully assess each staff member’s skills, training, proficiencies and interests. Are highly trained professionals performing routine tasks that could be done by someone with less experience? Failure to take full advantage of every employee’s assets can lead to complacency and ineffectiveness.
  5. Supplies. It’s easier to be safe than sorry, which is why over-ordering supplies is so common. Excessive inventory can lead to out-of-date medications and other expired items—and having to dispose of them.
  6. Office equipment. Mounting maintenance costs could mean that it’s time to shop the competition. Contracts should be reviewed annually, and it pays to take the time to understand what it entails to service your printers and other equipment. At the very least, it’s an opportunity to ask your current service provider for a contract adjustment.

Finding Solutions

Regardless of the size of your practice, minor financial leaks can lead to major cash-flow issues. Specifically, inaccurate coding, the net cost of billing and collections, outstanding payments, and lagging A/R can all result in mounting losses. Financial benchmarking is a proven way to target waste and drive performance by identifying lost revenue gaps and opportunities to improve. If your practice has yet to take a closer look at the trouble spots mentioned above, now is the time to do so.

How efficient is your revenue cycle?

Contact us today for a free consultation.