Four Ways to Improve Collection Efficiency and Reduce AR Days 2015

An efficient revenue cycle is critical to maintaining good finances

The healthcare revenue cycle is fundamental to healthcare providers' ability to maintain physician compensation, keep up with overhead, and invest in new technologies. When the healthcare revenue cycle isn't managed well, collection efficiency drops and accounts receivable (AR) days increase. Numerous tasks go into the revenue cycle, from collecting insurance and procedure data to preparing claims to billing patients. When any of these processes are inefficient or ineffective, the healthcare revenue cycle is needlessly prolonged.

Streamlining the healthcare revenue cycle involves ensuring collection efficiency and monitoring AR days. With a well-managed revenue cycle, money comes in faster, with less effort. Everyone has a role, from physicians, nurses, and other clinicians to medical accounting staff to administrative workers. Here are 4 ways to improve collection efficiency and reduce AR days.

1. Make the Healthcare Revenue Cycle More Front-End Driven

By making the healthcare revenue cycle more front-end driven, you can separate administrative work from the clinical setting, often improving the experience for both clinicians and patients. Collections should also improve. Once a patient is scheduled, a staff member is notified and can begin verifying insurance information and eligibility, requesting pre-authorization if necessary, and estimating patient liability. Much of this work is done on the back end, but doing it up front instead, and giving patients the opportunity to pre-pay cuts collection costs and can reduce risk of bad debt exposure. Obtaining pre-authorization up front prevents rejected claims and helps keep AR days under control.

2. Put Your Enterprise Data Warehouse to Work

If your facility has an enterprise data warehouse (EDW), you can put it to work to help you streamline the healthcare revenue cycle. The best starting point is analyzing current data status on clinical, financial, and patient satisfaction measures and looking for trends. Many EDW systems offer tools that let you drill down into data and find the causes of these trends.

Additionally, you can purchase benchmarking data for your EDW that will let you compare performance to similar healthcare facilities. Once you benchmark your data, you can more easily identify places in the healthcare revenue cycle that need improvement. Mining your EDW lets you find roadblocks that are unnecessarily prolonging your revenue cycle so you can examine root causes and fix them.

3. Have a Robust Plan for Reducing and Handling Rejected Claims

Preventing claim rejections can greatly improve revenue collection.

Rejected claims represent a major lost revenue opportunity. Denials represent the 10% to 20% of claims that cause most missed revenue opportunities. When denials are allowed to accumulate, opportunities for collection can be missed altogether, and AR days increase. Many facilities assign staff specifically to claims denial work so rejected claims can be resubmitted quickly.

It's also important to analyze denials and learn whether there is a root cause that can be eliminated to cut down on denials. Generally, receiving denials in one location rather than multiple points of entry helps with consistent data collection that can help get to the root of claim rejection causes. Plus, it allows better time tracking so fewer claims end up rejected for failing to meet submission deadlines. Monitoring contracts with payers closely to ensure their demands are reasonable and they aren't under-reimbursing can also help tighten the revenue cycle and reduce AR days.

4. Ask Frontline Staff What They Need to Be Most Effective

If collection efficiency is suffering and AR days are increasing, you can always ask your frontline staff if something is causing inefficiencies and how they might be addressed. When you've identified a problem that's reducing collection efficiency, your frontline staff are the people who deal with it every day, and they may have good suggestions about how to resolve them.

Examining workflows periodically and communicating regularly with frontline staff about what helps them accomplish their work better are ways to keep workflows efficient. For example, when workarounds are necessary, it's important to find out why and what could be done to eliminate the need for the workaround.

Conclusion

Expeditive is a leading provider of services that help healthcare facilities like yours improve the healthcare revenue cycle, reduce AR days, and increase collections. All of Expeditive's medical accounting professionals have extensive experience in all aspects of the healthcare revenue cycle, so they can be effective from day one. If you are transitioning to new technology, needing a fill-in for a worker on leave, or are simply looking for proven ways to streamline the revenue cycle and increase collections, we invite you to contact Expeditive at any time. We would be happy to answer your questions and help you get started on improving your revenue cycle.