{"id":14576,"date":"2021-11-24T14:49:00","date_gmt":"2021-11-24T14:49:00","guid":{"rendered":"https:\/\/www.medicalbillersandcoders.com\/blog\/?p=14576"},"modified":"2024-11-18T12:13:46","modified_gmt":"2024-11-18T12:13:46","slug":"effective-rcm-strategy-to-increase-reimbursements","status":"publish","type":"post","link":"https:\/\/www.medicalbillersandcoders.com\/blog\/effective-rcm-strategy-to-increase-reimbursements\/","title":{"rendered":"Effective RCM Strategy to Increase Reimbursements"},"content":{"rendered":"

The Healthcare Financial Management Association (HFMA) defines Revenue Cycle Management (RCM) as all administrative and clinical functions that contribute to the capture, management, and collection of patient service revenue. Revenue cycle management (RCM) is the financial process related to a patient\u2019s clinical encounter. <\/span><\/p>\n

According to HFMA, a basic role of RCM is to measure how well a healthcare organization maximizes the amount of patient revenue billed and how quickly it collects that revenue. While RCM primarily focuses on processing claims, payment, and revenue generation, it also includes patient services since care management directly impacts reimbursement. <\/span><\/p>\n

With decreasing reimbursements and as more patients are paying increasingly higher deductibles, it\u2019s important to have an effective RCM strategy to increase reimbursements. <\/span><\/p>\n

In today\u2019s economic environment, it\u2019s critical that administrators and revenue cycle managers implement best practices to effectively manage the revenue cycle to optimize efficiency and increase reimbursement. The following are essential functions for the effective implementation of the RCM strategy.\u00a0<\/span><\/p>\n

Effective Implementation Of The RCM Strategy<\/strong><\/h2>\n

Charge Capture and Coding<\/strong><\/h3>\n

To improve charge capture, staff should clearly communicate suspense times to the departments and state it in their policies and procedures. Suspense times are strict timelines placed on clinical departments to enter compliant, audited, and correct charges for services rendered. <\/span><\/p>\n

It is important to remember that each day that charges are not entered and falling out of \u2018suspense\u2019 can cause negative effects on your days in accounts receivable outstanding as well as cash flow. Systematic reviews of the chargemaster are essential to ensure that hospitals are capturing all revenue correctly and that they are not leaving dollars on the table.\u00a0<\/span><\/p>\n

Timely Filing<\/strong><\/h3>\n

Many healthcare organizations fail to file initial claims or respond to a claims appeal, in a timely manner due to inefficient or unmonitored processes, resulting in missed filing deadlines for either the initial timely filing deadline or the appeal timely filing deadline. <\/span><\/p>\n

Medicare allows the initial claims to be submitted within one year of the date of service, but many commercial payers now require claims to be submitted within 90 days.\u00a0<\/span>Additionally, Medicare allows only 120 days to respond and appeal a claim denial, while many commercial payers may require anywhere from 90 days up to one year based upon your specific state and payer guidelines. <\/span><\/p>\n

Therefore, it is important to have processes in place to not only submit claims in a timely manner but also continually monitor claims on hold to ensure timely filing deadlines are not missed.<\/span><\/p>\n

Billing and Collections<\/strong><\/h3>\n

Depending on billing methods, organizations should expect to receive payment in as little as 15 days (government payers). If insurance payments are averaging a turnaround time of longer than 30 days from the time claims are sent out until payment is received, the business office needs to develop a process for claim follow-up. <\/span><\/p>\n

A formal process to follow up on the status of claims has been shown to decrease the number of days claims are outstanding. Billers are expected to know what each payer allows and rejects on their claims. Rejections result from an edit not capturing an error on the outbound claim which gets sent back immediately from the payers without any entry into their processing system. <\/span><\/p>\n

Billers should work these claims, as a best practice, while focusing on the cause for the rejection to prevent that rejection from occurring in the future. Doing so may help to increase the efficiency of the revenue cycle through the decrease in total claim denials.<\/span><\/p>\n

Denial Management<\/strong><\/h3>\n

Monitoring, tracking, and reporting of denials are essential functions of a successful denials management program. Identifying trends and root causes of denials are critical steps in the implementation of an effective RCM strategy<\/a>. To effectively prevent denials, practices should monitor KPI and communicate the denials to departments, and report by:<\/span><\/p>\n