Gain Billing Efficiencies to Increase Cash Flow
Since 2016, physical therapists have become one of 26 healthcare categories to face reimbursement reductions. As a result of declining reimbursements and rising costs, profit margins are shrinking. One way to mitigate financial risk and increase revenue is to make improvements to your Revenue Cycle Management processes. By gaining efficiencies in your billing processes, you have an opportunity to unlock significant revenue potential.
At Breakthrough’s recent Patient Demand Summit, Bob Kowalick, PT and CEO of Revenue Cycle Solutions, helped define Revenue Cycle Management and identify strategies for improving billing processes to unlock hidden revenue. You can watch that session or continue reading to learn the key takeaways.
What Is Revenue Cycle Management for Physical Therapists?
Revenue cycle management involves all administrative and clinical functions that manage claims processing, payment, and revenue generation. It includes insurance eligibility verification, claims submission, payment follow-ups, and everything in between.
Traditionally, RCM involves both front- and back-end components. The front end involves patient-facing tasks such as appointment scheduling, eligibility, and authorization, patient registration, and upfront payment collections. Back-end functions include claims management, medical billing, reimbursement, and final payment collections.
In addition, there are structural and operational elements to consider. Structural elements affecting your RCM processes include your practice model, payer mix, and the systems you use. Operational elements include patient registration procedures, provider documentation, and accurate coding.
Why Revenue Cycle Management is Key to Your PT Practice’s Success
Efficient Revenue Cycle Management is essential for successful cash flow and for the financial health of a physical therapy clinic. It ensures you receive the maximum reimbursement for services provided. By optimizing revenue cycle management, you can:
- Reduce the number of denied claims
- Enhance payment speed
- Advance cost-effectiveness
- Improve overall financial performance
Additionally, clear communication with patients regarding insurance coverage and financial responsibilities improves patient satisfaction. By reducing the time spent on billing-related inquiries, you enable practitioners and staff to focus more on patients and provide a positive experience. This fosters loyalty, repeat visits, and word-of-mouth referrals.
Revenue Cycle Management Has Become More Complex
Private physical therapy practices once received the overwhelming majority of their revenue from a handful of insurance companies or Medicare/Medicaid. Today, payment sources include a broader mix of insurance companies, Medicare/Medicaid, and cash-pay sources — making revenue cycle management (RCM) more complex than ever.
Shifts in payment responsibilities, authorizations, higher deductibles, and a lack of transparency across multiple systems are just some of the issues practices face as they collect payments from patients and insurers.
5 Ways To Improve Revenue Cycle Management and Unlock Hidden Cash Flow
Let’s look at some of the most common problems affecting physical therapy revenue cycle management and steps to improve efficiency and unlock revenue.
1. Scheduling
Not following scheduling best practices can cost your practice greatly. Long wait times, double bookings, inefficient follow-ups, and no-shows all lead to lost revenue.
Scheduling is critical to minimize wait times and ensure practitioners see patients constructively. Front-office staff can confirm appointments by using multiple communication methods such as text, email, and phone calls to minimize no-shows.
What’s more, it’s important to incorporate proactively schedule follow-up visits as part of a complete plan of care. When last-minute cancellations are unavoidable, aim to fill canceled slots with short-notice bookings. This will help to ensure you fill your schedules and maximize your space, improving your Return on Investment (ROI).
2. Patient Registration and Eligibility Checks
After scheduling an appointment, the next step in revenue cycle management is registration and eligibility verification. It’s surprising how often front-end staff fail to adequately verify patient data. In fact, eligibility issues with missing or incorrect patient information are among the top reasons for claim denials.
While front-office staff may verify eligibility on a first-time visit, they must also understand the critical nature of verifying data and eligibility on subsequent visits. Gathering accurate data before a patient arrives for their appointment is key to facilitating smooth revenue flow through the cycle.
By completing prior authorization requirements, front office staff can avoid claim denials on their end. Additionally, payers are increasingly requesting confirmation of reimbursements before patient visits.
3. Upfront Collections
With increased high-deductible health plans, patients are liable for many of their own healthcare costs. Settling co-payments and deductibles at your front desk at the time of the appointment can significantly alleviate back-end payment collection struggles. It also saves administrative costs and frees back-end staff for more critical functions.
You can improve point-of-service payments and help simplify your revenue cycle management in three ways:
- Offer a credit card facility
- Provide financial estimates before appointments
- Allow patients to pay off balances over a set period
4. Claims Management
After an appointment, back-end staff execute a charge capture by converting services and practitioner time into billable charges. This process is often complicated by coding changes and varying payer guidelines. However, 90% of medical claim denials are preventable, and two-thirds can be recovered. This shows that with vigilance from your team, almost all practice claims should be granted.
To prevent denials, ensure codes are accurate and remain updated. Revenue staff should be knowledgeable about payer-specific guidelines and criteria. And because poor clinical documentation can lead to inaccurate charge capture and revenue loss, they should also:
- Confirm clinical documentation accuracy
- Verify patient and health insurance information
- Ensure proper coding and modifiers
Devote part of the billing team’s time to managing claim denials rather than just processing new claims. Make it standard procedure for your team to review denials daily to ensure reimbursement.
In addition, ensure your revenue cycle management staff checks that you receive the correct payments in agreement with your contract for eligible claims.
5. Medical Billing and Patient Collections
As with claims and denials, patient collections can be very challenging. Physical therapy practices can increase patient collections by offering electronic payments through patient portals. Patients can conveniently view their bill online, the amount owed, and what it’s for, and then pay immediately with a credit card.
Once all payments are collected, back-end staff complete the revenue cycle management process by designating payments to the patient case and closing the account.
Streamline Your Revenue Cycle Management
While different staff members may handle various parts of revenue cycle management, every part of the process affects its overall success. Breaking down the silos between front- and back-end administrative functions can improve a practice’s efficiency and financial performance.
For support with optimizing Revenue Cycle Management, reach out to Bob Kowalick at Revenue Cycle Solutions.
