4 Common RCM Mistakes (And How To Avoid Them)
4 Common RCM Mistakes (And How To Avoid Them)
Effective revenue cycle management (RCM) is at the heart of a financially and operationally healthy medical practice. There are thousands of examples out there that can confirm the importance of an efficient RCM process. However, to reap those benefits, you need to know how to implement the RCM process and what red flags to watch out for. With so many overlapping and complex processes entwined together to form RCM, even the most experienced veterans end up making mistakes. While these mistakes are often harmless, they can disrupt your practice’s cash flow and bottom line if not handled properly. Below are the five most common RCM mistakes that most practices make, and could have easily avoided, by forward-thinking and taking proactive steps.
- Failure to Timely File Claims
With claims submission being a time-consuming process, many practices choose to send out weekly batches of claims. A weekly submission not only increases the chances of a claim becoming lost, but also increases its turnaround time.
Understand this: The more time a claim spends in your office, the lower your chance of receiving reimbursement is. Some insurance companies might deny your claim if it is filed after 30 days of services being rendered. Other companies will suspend your claim to favor the more recent ones. Delays in claim submission will eventually result in a chocked-up revenue cycle. How to avoid this mistake: To streamline your claim submission process, aim to submit claims at the end of each day. Take the time to research advanced tools that can help you track all cases and ensure that they are billed out within a set number of days. You can use automated tools to generate alerts to remind you to follow up on overdue claims.
- Failure to Correctly Verify PatientEligibility
With copays soaring and patients making multiple visits to doctors, verifying patient eligibility is critical to managing RCM. Without eligibility verification, your practice may provide services to patients whose insurance does not cover care costs. If the claim is processed without patient verification, chances are it will be rejected, and the patient might have to bear the unexpected expenses. By sticking to upfront verification of patient eligibility, medical practices can cut future debt and help patients avoid unexpected out-of-pocket expenses. How to avoid this mistake: Make sure your employees inquire about each patient’s copay amounts and eligibility before rendering services. In case the provider does not cover patients, your staff should also provide patients with an estimated ‘out of pocket’ cost for the services. Also, several tools are available that automate the patient eligibility verification process and provide real-time details for patients, payers, and insurance plans.
- Failure to Resubmit Rejected Claims
According to a report by the American Academy of Family Physicians (AAFP), the average claim denial rate is 5 – 10%. No matter how good your coders are, some of your claims will get rejected due to errors. And when claims get denied, a lot of doctors are reluctant to resubmit to payers because they don’t have the tools to get access to the right data to support the challenge. The result? Lost revenue! How to avoid this mistake: Your staff must keep an eye on the submitted claims’ status and identify errors in it. Denied claims must be rectified, supported with a valid reason, and resubmitted. Likewise, unpaid claims by patients must also be handled as a priority. There are many tools available online to help you stay up-to-date with regulations to defend your claims. These tools not only identify the reasons for denials, but will also help you streamline the claim filing and appeal letters process.
- Failure to Collect at Point of Care
Your chances of collecting fees take a plunge when patients walk out the door. While some doctors are not comfortable collecting payments at the point of care, avoiding this difficult task might put your revenue at risk. Should you choose not to collect fees at the point of service, be prepared to waste time and money making phone calls, sending invoices, and chasing patients for payments. How to avoid this mistake: This is probably the most easily preventable mistake. Train your staff to communicate with patients regarding copays and other costs before rendering the service, as this will help eliminate confusion and promote a healthier revenue cycle. Your patients will also respect payment rules when they are communicated upfront. Conclusion Establishing an effective RCM process, one that includes preventative measures for the mistakes discussed above will profoundly impact your practice’s profitability. Also, communicating with staff and patients is vital to the success of any policies you adopt, especially those related to payments and costs. As you modify your approach to RCM, be sure to train your staff thoroughly, eliminate any RCM myths they might have, and inform patients about your renewed policies. The efforts will be worth the hard work. We hope that learning about these common RCM mistakes will help you avoid them in the future. However, if you are too tied up to audit and streamline your RCM process, contact us to learn how we can help you succeed!