When Should You Outsource Revenue Cycle Management?
Billing for behavioral health is becoming increasingly challenging with insurance companies transferring more of the financial responsibility to patients; regulations imposing new and time-consuming burdens; plans to outsource revenue cycle management; and a growing number of plans and payors increasing variance in eligibility and verification requirements.
Nationwide, labor issues continue to impact both front-line provision of care and back-office completion of business tasks for all healthcare providers, including behavioral health.
Even smaller behavioral health clinics and practices where billing departments have traditionally operated smoothly are weighing questions about whether and when to outsource revenue cycle management.
“High numbers of unpaid claims in accounts receivable, increasing denials and workload, and ongoing staffing issues are impacting cash flow. Providers are realizing they need to make a change,” said Eloy Paez, Executive Vice President of Infinity.
According to Paez, several things can help smaller providers determine whether to outsource revenue cycle management.
“Providers should always start with a look at key performance metrics to take stock of how they measure in comparison to industry standards and best practices,” he said.
Other considerations include direct labor costs as well as associated costs such as ongoing training and the impact of workload on resource utilization.
The revenue cycle experts at Infinity have compiled a guide for behavioral health providers who may be considering whether to outsource revenue cycle management or their billing.
Review the KPIs
From DRO (Days Revenue Outstanding) to bill charge lag times, certain key performance metrics are the vital signs reflecting the financial health of a behavioral health practice.
Behavioral health providers and substance abuse treatment programs in particular are prone to high numbers of aging claims in accounts receivable. The industry average for reimbursement never paid is a staggering 20-30 percent.
“That means these providers are never seeing nearly a third of their earned revenue for the services they provide,” Paez said.
Here are a few of the KPIs Infinity experts have identified as important measures of how your practice compares to others in the industry:
- Bill Charge Lag Times
- Clean Claim Rates
- Accounts Receivables – Aging (A/R)
- A/R over 60/90 Days
- Denial Tracking
- Revenue Actualization %
- Referral Trending
Evaluate workload and staffing
It takes a team of reliable professionals to keep your organization running efficiently with adequate cash flow. Delays in claims processing directly impact cash flow and are the bane of small processes.
But in today’s challenging labor market, openings often leave providers struggling to complete back-office tasks. Staffing shortages throughout the operation frequently delay completion of necessary documentation, leading to slower claims processing and subsequent cash flow hiccups.
Untrained or overworked billers are prone to errors and omissions that can lead to denials, additional documentation requests from payors, and time-consuming payment-related audits by government contractors for Medicare and Medicaid.
“Billing errors and aberrancies trigger audits,” Paez said. “And turnover usually creates knowledge deficits and compliance risk, necessitating costly staff training.”
Paez and other Infinity experts recommend providers keep a watchful eye on claims followup, a key performance area often neglected by overworked or understaffed billing departments.
“Once a claim has been submitted, a follow up should occur within at least 72 hours to make sure it has been accepted by the clearing house and processed by the carrier,” Paez said.
Overworked billing departments may not have the resources to complete timely follow up and the additional administrative work for omissions, duplicate claims, or additional documentation needs
“Not following up to provide any additional documentation can be costly to providers,” Paez said. “This is an area where having a trusted outsourcing provider can really make a difference.”
Trend tracking and financial forecasting
Trends in healthcare plans and payment cycles are important components in the success story of a behavioral provider, enabling the organization to stay abreast of changes and act accordingly.
According to Paez, most billing software has reporting functionality, but someone needs to take the time to monitor the reports and develop plans for acting on them.
If a behavioral health provider is not adequately tracking trends and data, chances are the organization is not doing a great job at overall financial forecasting either.
“Data tracking and trending are essential to stronger financial forecasting, but many back offices are simply too overwhelmed with the volume of work to be able to track trends in health are plans or payment cycles,” Paez said.
Having additional resources available through the right outsourcing partnership can often be beneficial for data analytics and financial planning and outsource revenue cycle management, Paez said.
“It enables the provider to leverage the relationship for access to expertise in better understanding metrics, performance standards and best practices, defining business objectives and strategies, and improving overall performance,” Paez said.
Infinity can help
If your practice has a backlog of unpaid bills or if your claims are being denied, Infinity’s knowledgeable team can provide revenue cycle outsourcing services for timely and optimal reimbursement. Driving your cash flow and optimizing profitability, we work hand in hand with the industry’s leading network of healthcare compliance experts.
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