Continual Assaults on the Revenue Cycle

It’s no secret that the industry to which we have chosen to dedicate our livelihoods is constantly changing — and we all know that “changing”  means continually challenging. Those of us involved in revenue cycle management and cash flow responsibilities know all too well the changes in healthcare reform that are impacting our jobs — ACOs, 5010, ICD-10, and increased self-pay receivables. Let’s remember that there are two overarching goals of all healthcare organizations:

1. Providing quality patient care
2. Getting paid for services rendered

One is dependent on the other; one cannot exist without the other. All functions and operations support these two goals.

Perfect your juggling act
In addition to managing the daily issues surrounding cash flow and A/R management, especially with increasing regulatory demands, it is imperative that all revenue cycle operations function at an optimum level. It’s also important that all monitored key indicators capture vital information that can be used to proactivity respond to deviations in performance. If there is a breakdown in a function of the revenue cycle — such as insurance verification, charge capture, edit resolution, billing lag, A/R follow-up, etc. — cash flow suffers, or stops altogether. All revenue cycle functions must be designed with “best practices” in mind, and management must have a consistent and constant understanding of these best practice operations. This is the only way to successfully compete in the marketplace given the increase in regulations impacting accounts receivable.

Break the pattern of denial
5010 mandate
The 5010 mandate impacts the systems we use for claim submission. This change could possibly cause an increase in edits and denials. Monitoring these denials and enhancing your system to rectify denials has to be a priority. Another key indicator that needs to be monitored is the volume of edits that may be holding back claims.

Increasing self-pay receivables
A review of organizations across the country shows a substantial increase in self-pay receivables. This is due to the explosion of large deductible policies and increased co-pays. Without an effective financial counseling process that includes insurance benefit verification and guidance on payment of deductibles, the effort to collect these self-pay balances falls on the A/R follow-up function.

ICD-10 around the curve
The implementation of ICD-10 may seem like a long way off, but the planning and understanding of this regulation must be undertaken now. There are great impacts on how services are coded and how codes are mapped from ICD-9 to ICD-10 and, in some cases, back to ICD-9. Discovering and understanding the financial effects of ICD-10 on DRG reimbursement is crucial to an organization’s goal of securing its financial viability.

The ACO factor
ACOs are another initiative that demands attention, but their impact on systems and operations is less understood. With a bundled payment regulation, it is imperative to start planning how to submit a unified claim – combining hospital and physician charges for regulated patient services. This will dramatically affect how charges are reconciled, billed and accounted for, all of which makes demands on practice management systems.

Expect the best
Clearly, these new regulations are forcing us to monitor and protect our revenue cycle performance at every turn. So it is important for all of us who are responsible for managing the cash flow of organizations to sharpen our knowledge of these regulations by studying industry news, seeking the advice of industry experts, and planning strategies with “best practices” in mind. Only by demanding the best can we expect the best.