Sometimes physicians have problems with the revenue cycle because “most physicians receive little to no business training,” says Monte Sandler, CPA, executive vice president of revenue cycle management at Experity, an electronic medical record practice management and RCM solution in urgent care, based in Rockford, Illinois. “Their time is better spent seeing patients than something that is not their core competency.”
Dingwell says many physicians can feel overwhelmed at how to improve their RCM and find a new or right partner to help them achieve their goals. “I think it’s important for physicians to know what their strengths are and what their knowledge gaps are,” she says.
When physicians should seek a new RCM partner
With the exception of brand new practices, most physicians, whether individual or group practices, likely already have a revenue cycle process, if not a partner, and may be doing everything in-house. So when should physicians seek a new partner? Sandler says it’s often a “trigger event” that leads physicians to seek to improve their RCM in one way or another. The COVID-19 pandemic is one such example, as many physician practices have taken a hit in cash flow and had to change how they practice. It might also be driven by swiftly changing payer rules, issues with contracting and credentialing and other tasks that impact cash flow. These are the moments when a physician might want to change things up.
Additionally, Sandler points out that physicians may be leaving money on the table by not optimizing their coding and billing. “Exceptions, meaning errors, come in the form of rejections and denials,” she says. “And those tend to range in the 10 to 15% range. That doesn’t even account for just claims that insurance companies don’t pay for whatever reason. So if a practice is failing at rejections, denials and accounts receivable management, they could be leaving 20% to 30% on the table.”
Improving revenue cycle starts with the physician having some sort of vision for their practice into the future, says Heather Richards, senior vice president of value-based initiatives for Texas-based MPowerHealth, which helps physicians improve quality, efficiency and outcomes.
“What is the goal of the practice? Is the practice looking at growth opportunities? That is the optimal time to (review the revenue cycle),” Richards says. “An optimal revenue cycle partner is going to have a road map in mind to continuous improvement.”
Rather than trying to overhaul the entire revenue cycle process at once, Dingwell encourages physicians to think step by step, starting at the beginning. “You can’t really move on to the next step in the cycle before you complete the step you’re on. If you do move on prematurely, that’s where challenges in your revenue cycle arise.”
The first step, Dingwell says, starts at the point of patient registration, in verification of eligibility, authorization and method of payment.
Sandler says this is an area where many physician groups struggle to get correct information. “Front desk people are the lowest-paid people in the organization with the highest turnover, yet they arguably have one of the most important jobs in the cycle. If you don’t get the right insurance information, anything an RCM company does is for naught.”
A strong RCM partner, he says, can teach a practice how to solve registration problems before they happen.
In-house or outsourced
Most experts agree that outsourcing the biggest pieces of the revenue cycle such as coding, billing and credentialing makes the most sense, though early in a physician practice, costs to outsource may be prohibitive.
“By working with RCM organizations, providers get access to a lot of resources they otherwise wouldn’t have, or would have to pay a lot for,” Sandler explains.
Many RCM partners offer CPAs, contracting credentialing specialists, certified coders, compliance specialists and other legal resources within one organization.
Outsourcing may be ideal when a practice is trying to scale and grow wealth, Richards says. “I would look at outsourcing as optimal when I have scalability concerns, when I have the opportunity to focus on patient care and leave what revenue cycle experts do best in their hands.”
Considerations for your RCM Partner
So how can physicians determine if they’ve found the right partner for them? Saira Ahmed, MD, an internal medicine doctor and sleep specialist with Mediversity Health, a multispecialty practice in New Jersey, says physicians need to decide what type of RCM partner they want and offers some key considerations:
Certified coders/billers: Ahmed emphasizes the importance of legitimate and certified professionals who are keeping up on the latest coding changes, which can make the difference between a successful claim and a rejected one.
Familiarity with your specialty: A good RCM partner doesn’t just support physicians in general, but also understands your specialty in specifics, she says. Ahmed is a sleep specialist, for example, which comes with unique codes for treatment and specific equipment needs.
Familiarity with your EHR: Your EHR is a key piece of the revenue cycle, and an RCM partner needs to be able to understand how to work with yours. Additionally, you want one who is up to speed on the most cutting-edge technology, as EHR programs adapt and change.
Reporting capabilities: Reports enable physicians to see problems, such as denials or outstanding accounts receivable, Ahmed says. Strong reporting is important to improving the revenue cycle.
Billing frequency: Billing has to be done every day without delays, she says. Accounts receivable that are older than 90 days reflect a problem.
Denials: Lastly, Ahmed says, you want to know how they handle denials, whether you’ll be paying extra for them to correct and rebill for these or whether they leave that up to you.
Physicians should consider their RCM partner “an extension” of the practice, not so much a separate entity, according to Karen Schechter, MBA, director and assistant professor of health care administrative programs at Maryville University in St. Louis. “If that extension of you doesn’t have the same values, and you’re not comfortable with them, it will be hard to trust the relationship,” she says.
Even if you are outsourcing, she adds, the physician is responsible for any problems that arise, so working with an RCM partner should not be for the purpose of putting the subject out of mind.
Schechter also recommends choosing an RCM partner that is willing to have regular meetings, whether monthly or quarterly, but more often than once a year, and who is willing to answer questions as they arise. “You want a partner to be transparent, to disclose information. What kind of specialties do they work with, what size is their staff and how are they organized?”
Ahmed agrees that availability of an RCM partner is crucial. Her practice needed an RCM partner they could get a hold of at any time, not just during the week. “I can call the owner of my vendor at 10 o’clock at night or on a Sunday evening and he’s going to get back to me. Because this is your livelihood and communication is super important.”
What is the cost?
If you’ve checked all the boxes and found a partner you feel good about working with, who can manage all the key pieces of your revenue cycle, the last piece of the puzzle is cost. How much can you expect to pay?
The two most common ways of paying, according to Ahmed and Sandler, are a flat monthly fee or a contingency plan where they charge a percentage of your receivables, typically between 5% and 7%.
For Ahmed’s practice, the flat rate makes the most sense. Sandler, on the other hand, thinks the contingency plan is a good option particularly when receivables vary. “(Cost is) variable based on volume,” he explains. That became an important point when COVID-19 hit, he says, because as receivables volumes went down dramatically, physicians’ payments to their RCM partners also went down. “They’re only paying for what we actually collect,” he says.
Richards also warns that being too focused on price can mean losing sight of key areas, primarily “expertise, gathering insights and the engagement the third party will have with the practice.” She finds that physicians don’t always understand the difference between a billing vendor and an RCM partner. “Managing the full-cycle journey for a patient from appointment to zero balance is really a data-driven collaborative engagement.” And that is worth paying for.
Sandler agrees that understanding the scope of the RCM partner’s service is key to determining if it is worth the cost. “Finding the right partner that you can trust and that is going to work with you to optimize your business, collections and cash flow is really paramount,” Sandler says.