7 Strategies for RCM Success

We are excited to present this article from Elizabeth W. Woodcock discussing key strategies for Revenue Cycle Management success in your medical practice. Speaker and author Elizabeth Woodcock, MBA, FACMPE, CPC is passionately dedicated to the physician practice industry. Educated at Duke University and The Wharton School, she is principal of Atlanta-based Woodcock & Associates.


Care360 RCMManaging the revenue cycle of a medical practice is not an easy task. The challenges of the regulatory environment, the complexity of the coding system, and the shifting dynamics of reimbursement are not going away. Maintaining your focus on the key drivers of revenue cycle success is business critical. Concentrate on these seven strategies, and you’ll be in position to optimize your practice’s revenue cycle.


Strategy #1: Monitor Payments. Research shows that reimbursement for professional services has been – and continues to be – adjudicated at rates well below expectations. Don’t let the intricacies of insurance agreements get the best of you. At the line item level – for each CPT® code, that is – ensure that the allowable reported on your remittances matches the expected rate; it’s not uncommon for insurers to misstate allowables. Don’t rely on memory or intuition when your revenue is at stake; request that the insurers with which you contract produce a written statement showing the expected payment for each CPT® code you use. Seek to make CPT payment-rate transparency a component of every payer contract you sign. Embed each payer’s allowables in your practice management system and be sure to update them when your contracts renew or change.

Strategy #2: Perform Financial Clearance. Develop a process for employees to comprehensively and consistently perform financial clearance for all services to all patients. Design your financial clearance protocols to include steps to confirm insurance coverage, benefits eligibility and financial responsibility. Improve performance by automating processes so that employees can quickly perform and recheck financial clearance at every stage of the revenue cycle ­­— from the initial telephone contact that sets the appointment through the conclusion of the patient’s office visit. If an exception regarding a patient’s coverage is identified, address it. It does no good to secure the financial aspects of each encounter, only to ignore the outcome if it cannot be confirmed. Advance planning can reduce the potential impacts of eligibility problems at the last minute. For example, set up appointment schedulers with the necessary technology to conduct financial clearance during scheduling calls. Consider also the application of your financial clearance strategy to non-office services, such as services provided at a hospital or the other occurrences likely to produce the denials that can plague your practice’s revenue cycle. 

Strategy #3: Collect from Patients. Train your employees to ask politely but firmly for money. Coach them to improve their collections performance by working from scripts. These prepared statements may include language such as: “Ms. Jones, our policy is to request payment at the time of service. Your insurance plan requires a copayment of $50. We take credit cards as well as cash and checks.” A carefully constructed patient collections strategy also anticipates that some patients may have balances owing. Instead of combining the copayment and owing balance amounts — thus increasing the odds that the patient will offer just a partial payment — instruct employees to postpone the revelation of an owing balance until the copayment is in hand. This second amount due can be introduced by saying: “I also note that you have a small balance of $117. Can we go ahead and run your card to take care of that balance as well?” For patients without insurance, set a minimum deposit at a level equal to or slightly above the market average for commercial insurers’ copayments.

Strategy #4: Manage Denials. Be aware that submitting a claim does not equate to automatic payment. Indeed, a minority of claims – from an industry standard of five percent to more than 20 percent, depending on payer mix and specialty – are returned with payment denied. Concentrate on addressing those denials by routing them into a special work queue. If denials have been a problem, assign an employee to work them rather than piling them onto the regular workflow. Above all, don’t let denials sit in limbo; work them within 72 business hours of receiving notification unless there are extenuating circumstances.

Strategy #5: Establish Employee Expectations. In addition to the 72-hour rule for addressing denied claims, establish productivity expectations for all employees involved in working accounts. Experienced employees can take action on 50 to 70 accounts daily, ideally working the entire account instead of solely focusing on individual transactions. If that range is too high – or too low – set your own. The key is to ensure that employees understand what you expect. Remember, human beings can manage to look busy eight hours a day!

Strategy #6: Avoid the Snowball Effect. Failure to establish and monitor expectations regarding quality and quantity can lead to the “snowball effect” in a business office. If, for example, you’re receiving remittances with 200 denials a day but your business office is only working on 20, the problems will compound rapidly, leaving you with less revenue and more work. Denials are pesky, but they usually convert to revenue if addressed in a timely and appropriate manner. Once the snowball of delayed work starts rolling, however, the results are disastrous: denials turn into write-offs, and your profitability suffers.

Strategy #7: Report on Key Performance Indicators (KPIs). Develop a dashboard of selected KPIs for your revenue cycle, benchmarking the data with industry norms. Incorporate important metrics like days in receivables outstanding, percentage of receivables over 120 days and adjusted collection rate. Establish performance goals for these metrics and others of your choosing. Most importantly, set a tolerance range and review your KPIs daily. If you see an indicator dipping into the below-expectation range, take action. The complexity of the business of medicine is not just a perception; it’s a reality. Instead of giving up, use practice performance data to track down the business intelligence you need or outsource the task to a qualified partner to ensure that your practice’s revenue cycle is managed effectively. The revenue cycle is not a process for which poor performance can be tolerated for any length of time.

The seas of change in health care are here and the challenges are not going away. There’s no better time than now to take steps to ensure that your practice’s revenue cycle is in order. Pave the way to a smoothly running revenue cycle by investing time and resources into strategies that will lead to success. 

To learn more about Quanum RCM call 1.888.491.7900 or fill out the form below.