Payments in healthcare can be complicated, and often, small practices’ revenue cycle management (RCM) systems hinder instead of help. RCM is the business process healthcare providers use to track payment for their services and revenue generated throughout a patient's entire care experience. If your RCM is slow or inefficient, you’re not alone — and there is a way to fix it.
The Dermatology Associates of West Texas had been dealing with inaccuracies, MIPs penalties, and a slow payment cycle. Once they switched their EHR and practice management software vendor, they experienced immediate relief because of the improved RCM functionality. In fact, the practice received a MIPs bonus for the first time after upgrading their tech stack.
Many other practices have experienced similar transformations after embracing software with advanced revenue cycle management capabilities. A landmark 2012 study found hospitals with efficient RCM technology experienced increased profits and equity growth.
What Is RCM?
Revenue cycle management is the process of tracking patient payment information. The cycle includes identifying care needs, billing patients and insurance companies, and processing payments. When done quickly, a practice has a healthy revenue flow. Tracking starts the moment a patient walks into your practice.
But the benefits of improving RCM go beyond the financials. Faster RCM means a better patient experience and a smoother administrative workflow. It’s a win for all involved – your patients, your team, and your practice’s finances.
Revenue Cycle Management Steps
To improve RCM, your team needs to understand the nine steps of revenue cycle management. Once understood, it’s easier to find opportunities to optimize each.
- Step 1: initial contact - as soon as a patient makes contact, it’s important to gather as much information about the patient and their insurance. Early collection leads to a smoother experience once they enter the office.
- Step 2: registration - when a patient makes an appointment, your team should gather any information to meet clinical and financial regulations. This is also an opportunity to educate patients on any next steps.
- Step 3: charge capture - your administrative team records patient charges and submits them to providers. Accurate capture is important since inaccurate charges could lead to lost revenue.
- Step 4: utilization review - these evaluations performed before, during, or after care investigate whether care provided was efficient and effective. This step also provides useful data to help practices improve the quality of care moving forward and to control costs.
- Step 5: coding - practice staff document care provided in a patient’s medical record. Staff completing this task should be certified and committed to ongoing training.
- Step 6: billing follow-up - in this step, providers pursue payment from third-party payers, such as accident insurance. This is especially important when a patient is insured by Medicare or Medicaid, as both are considered last-resort payers and offer a lower reimbursement rate.
- Step 7: claim submission - after third-party payers have been pursued, it’s time to bill a patient’s insurance company. If a claim is considered “clean,” the payer reviews and pays the bill upon receipt. When your RCM runs smoothly and accurately, you’ll receive more clean claims, saving time and money.
- Step 8: patient payments - if any part of the bill isn’t covered by insurance or other payers, it’s time to bill the patient. Since medical billing can be confusing, it’s important to reach out to patients quickly, explain any charges, and provide payment options.
- Step 9: payment verification - to receive collections quickly, it’s important to have an accounts receivable team that verifies payments, submits clean claims, and makes appeals if necessary.
Importance of RCM
Throughout the nine steps, there are a lot of moving pieces. Even for large practices, it’s difficult to create an efficient RCM process, and they may have entire teams devoted to each step.
Smaller practices often have fewer than 10 administrative workers – who are responsible for all nine steps simultaneously. Yet with a few easy improvements, small practices can improve their RCM.
For Juliette Eye Center, improving RCM had big payoffs in terms of time saved by their team and how fast they were paid. Their new payment process ensures payment collection happens within 90 days. Nextech’s comprehensive EHR and practice management solution helped make it possible — experience it for yourself.
6 Ways to Improve Your Revenue Cycle as a Small Healthcare Practice
There are two primary strategies for improving RCM: revise in-house processes or upgrade your tech stack with experienced external support and training.
When handling things in-house, your team may spend hours poring over myriad variables in each step and experimenting with possible improvements. But bolstering your tech stack by integrating a third-party solution requires minor fine-tuning based on proven results, no experimentation required.
If the second strategy sounds better, we’ve outlined six small tweaks to improve the patient experience and get paid faster with fewer errors.
1. Embrace the Payment Collection Process
With the right tech stack, payment collection can be smooth for your team and patients. But what exactly is that “correct” tech stack? For many small practices, it’s an integrated EHR and PM software with built-in payment processing functionality.
When looking at systems, find one with:
- An easy-to-use patient interface
- Fast payment reconciliation times
- Smooth integration with other technologies in your practice
Nextech’s EHR and PM solution has integrated payments functionality to accelerate your practice’s cash flow.
2. Speed Things Up with Automation
An integrated tech stack should automate parts of your RCM. Without automation, RCM involves many repetitive tasks, stressed-out staff, and inaccuracies.
With automation, repetitive tasks are performed by your tech stack and there’s a minimized risk for errors. Plus, your staff will have more time to focus on other priorities and be more productive since their minds and days aren’t occupied by those manual, repetitive tasks.
3. Explore the Possibilities of AI
Artificial intelligence is becoming more prevalent in all kinds of healthcare technology, and while it promises to have a beneficial impact on RCM, effective ways to implement AI are still developing. For the moment, the best thing your practice can do is choose innovative tech by companies already exploring how to integrate AI into RCM.
Software vendors developing AI features are great partners in navigating this new technology. Nextech, for example, has several AI innovations in development, including an AI virtual assistant, AI scribe, and AI support. These are designed to create workflow efficiencies as well as enhance the patient experience.
4. Empower Staff with Comprehensive Training
The right tech stack is only useful if your team is well trained on not only just how to use it but to get the most out of it. According to the Centers for Medicare & Medicaid Services, RCM technology only improves profitability if all team members are savvy with all that’s possible with the tech.
When looking at software vendors, consider what’s included during the training provided in their implementation process.
5. Outsource Billing, Audits, and More
Your practice only has so many resources and there are only so many hours in the day. To complete RCM efficiently and accurately, consider partnering with a revenue manager. A revenue manager can handle billing, audits, claims appeals, and more while your team watches the revenue roll in.
Before you outsource, it’s important to have an EHR and PM system that provides a revenue manager with easy access to practice data. Nextech’s all-in-one solution has everything you need.
6. Measure KPIs with Ease
RCM isn’t a set-it-and-forget-it situation. It requires continuous improvement and optimization. The right EHR/PM software includes RCM functionality that provides access to KPIs without your team having to submit a data request. Plus, many high-quality vendors like Nextech, offer insights and recommendations to improve your RCM based on that data.
Nextech Advanced Analytics empowers practices with key performance indicators to help improve operations, patient experiences, and strategy.
Implementing These Revenue Cycle Management Strategies
RCM improvement doesn’t have to be a complicated process. It can be as easy as investing in the right solution to complement your tech stack and receiving thorough training. Nextech provides the training and tech to ophthalmology, dermatology, and plastic surgery practices as well as med spas across America.
In just a few minutes, you can learn how the RCM functionality in our EHR and practice management solution can support faster payments and a better patient experience for your practice.
FAQ
How can healthcare organizations improve their revenue cycle management?
Healthcare organizations can improve their revenue cycle management by investing in the right technology, specifically EHR and PM software with payment processing functionality that integrates smoothly. When looking at different software vendors, choose one that offers thorough training so your team understands how to get the most out of the new software.
What are the five key areas for revenue cycle improvement?
Five key areas for RCM improvement include:
- Your EHR/PM software: a system with accurate, accessible data can improve the efficiency of your claims.
- Your payment collection software: a fast, efficient option can greatly improve your RCM.
- Integration: ensure your payment collection software and EHR/PM integrate smoothly for faster data transfer.
- Trained staff: technology is only as good as the people using it. Invest in your staff’s RCM education.
- Outsource as needed: if your practice is smaller, it may be hard to manage all parts of the revenue cycle in-house. Collaborate with trusted vendors.
How does revenue cycle management benefit patients?
RCM takes place before, during, and after a patient’s clinical care, including many steps along the financial path that require direct patient interaction. The ability to efficiently manage the revenue cycle – and the patient’s involvement – plays a tremendous part in how much a practice gets paid and how fast it happens. Software with thorough RCM functionality can streamline the patient’s role in the financial process by mitigating some of the more frustrating and complex aspects of payment and creating a better overall patient experience from start to finish.