Eyeworld

by Patricia Morris Revenue cycle mastery P atient bad debt is becom- ing a serious threat to the profitability of oph- thalmic practices nation- wide. Faced with unprecedented capital demands, practices are being forced to look be- yond cost cutting and traditional revenue management solutions to sustain their business. Self-pay pa- tients do account for a small per- centage of this debt, but insured patients who neglect to pay balances after the payer pays its portion rep- resent the fastest growing segment of individuals with outstanding medical bills. While healthcare was once pre- sumed to be fairly impervious to fi- nancial downturns, the industry has been significantly impacted by the financial crisis. Both providers and patients are feeling the strain. On the provider side, capital for ad- vanced technology, facility up- grades, and budget for hiring qualified personnel are more diffi- cult to obtain. When patients choose to postpone elective proce- dures, routine exams, diagnostic services, and treatments, demand for these more profitable services de- clines. As more of the payment burden is shifted to patients by em- ployers and insurers, different self- payment business processes are required in the healthcare setting. In addition, the U.S. Healthcare Reform brings a new range of compliance challenges. What steps can providers take to increase patient collections in light of these changing dynamics? The first step toward revenue cycle mastery is to identify and as- sess the main challenge. Currently patients act more like consumers; it makes sense for prac- tices to operate more like a retail es- tablishment. Ophthalmic practices with an optical dispensary or fee for service lines of business such as re- fractive surgery, elective oculoplas- tics and facial aesthetics, skin care, or vitamin supplement products are familiar with this philosophy. By adopting payment strategies that are routine in the above service lines or other industries, ophthalmic prac- tices can increase patient collections and minimize the time and expense associated with capturing outstand- ing balances. This article explores the achieve- ment of operational efficiency, reim- bursement, and compliance and offers valuable insight into how your practice can identify, assess, and prevent revenue leakage. Revenue leakage is the gap be- tween the revenue providers are en- titled to and the amount they receive. This is a common yet signif- icant problem. Revenue is lost each day due to inaccurate pricing, charg- ing, and coding of services and sup- plies related to patient care. The challenges associated with revenue leakage are numerous, per- vasive, constantly shifting, and often hidden within an organiza- tion. Ophthalmologists report a broad range of issues including: a high rate of incorrect codes on claims, insufficient access to code changes and compliance regula- tions, inconsistent assignment of CPT codes, missing codes, modifiers, lack of communication between clinical and billing staff, pricing that doesn't cover costs, inefficient inter- nal processes, and more. Addition- ally, plan coordination, refraction fees, and contact lens ordering poli- cies play a role. Without effective means to identify the sources of these leaks and address and prevent them, revenue cycle mastery is not sustainable. This is more than a process; it's a philosophy that must be embraced by the entire organization. All stake- holders must understand their roles and the impact of their work on im- proved financial performance and patient care. Achieving revenue in- tegrity begins with proper pricing and depends on the quality of pre- registration data collection and in- surance verification. Technology can capture data about patients, but cli- nicians must be responsible for mak- ing sure the right service and supply charges are captured at the point of service. Establishing effective con- nections between clinical processes and charge capture tools is key to achieving accurate documentation for charging and coding so that an organization can receive all the re- imbursements it deserves. Inaccurate pricing can be one of the most difficult revenue cycle problems to overcome. Examples in- clude: pricing that doesn't cover costs, pricing too far above and below the competition, pricing in- consistent with payers' reimburse- ment agreements, inefficient procedures for providing estimates, and inability to efficiently update pricing markup formulas as costs change. Significant missed revenue can be attributed to pricing outside established markup guidelines. This is often caused by outdated pricing algorithms and inconsistencies with published state and national rates. Technology can assist with this chal- lenge. The benefits of investing in a comprehensive electronic practice management and medical records system are convincing. Not only does an automated program deliver consistent, measurable, and proven benefits in terms of financial and staff performance, it does so in re- turn for a relatively low investment. Some leading healthcare organiza- tions have realized a high return on investment in a short period of time, and many smaller practices have achieved extraordinary results as well. Another common source of rev- enue leakage is related to improperly captured or incorrectly billed charges for procedures. Providers may know they're losing revenue, but we fail to realize the extent to which incorrect charging and cod- ing contribute to the problem. Most providers lack the ability to see into their charge capture business processes and data in a way that em- powers them to identify the specific sources of revenue leakage. Often our actions are out of alignment with industry best practices and we are unable to stop the leakage at its source. The greatest charge capture risks exist in high-volume, large rev- enue-producing practices. Improved communication along with internal chart audit practices can help this issue. The practice of finding and fix- ing issues on the back end of the revenue cycle (downstream) results in excessive reworking of claims to fix the same errors repeatedly, as well as a greater volume of denials and delayed payments. In addition to lost revenue, efforts to resolve these issues represent a significant drain on workflow and financial re- sources. Repayment of revenue cap- tured incorrectly leads to substantial loss. If a practice is not consistently and completely compensated over time, serious financial liability en- sues. Denial management is an im- portant component to revenue cycle mastery. I have learned the impor- tance of making sure charges are ac- curate the first time around rather than having to rework and defend claims on the back end. EW Ophthalmology Business 62 June 2011

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