Accurate medical coding and medical billing expertise, always important, have become critical components for a medical provider’s revenue cycle management success. Never before has revenue cycle management been more vital to physician, practice, clinic and hospital incomes.
More Critical Than Ever
The medical coding and billing landscape has changed dramatically during the early years of the 21st century. There are multiple reasons for these significant changes. The most important developments include the following primary items.·
– Pay for performance (P4P),
– Meaningful use, both 1 and now 2,
– The coming ICD-10 diagnosis and treatment codes,
– Electronic health records (EHRs) and prescriptions, and
– Incentives for medical provider compliance with payer regulations and disincentives for non-compliance
Providers face potential revenue delays or outright losses by submitting inaccurate codes and claims. While the incentive programs offered by Medicare and Medicaid will increase revenue for some providers, the revenue penalties for inaccuracies or non-compliance will reduce income for medical providers submitting flawed coding and/or claim documentation.
The numerous implementation postponements applicable to the new features described are reaching critical mass because these initiatives, such as moving from ICD-9 to ICD-10 codes, have been consistently delayed in recent years. The accommodations to the physician and hospital community will be ending soon.
In all cases, the accuracy of coding and billing plays the critical role in ensuring former revenue streams, however. Successful revenue cycle management becomes ever more vital as these changes become reality.
Revenue Cycle Management (RCM) to the Fore
RCM has always been important to maintain consistent income streams, avoiding dangerous gaps in claim reimbursements and copay receipts. It does not matter whether managing a for-profit practice or a nonprofit clinic, maintaining a steady revenue stream is always vital to keeping the cash flow faucet running.
However, the noted changes force RCM to take center stage in practice or clinic income maximization. Yet, some practice and healthcare facility managers appear to be unaware of the components of the RCM process. Simple to state, RCM requires a bit more work to implement. According to Healthcare IT News vital process components include the following features
– Monitor and manage claims processing by using current technology that keeps track of the claim process at all points in its journey.
– Ensure the accuracy of coding and billing documentation by installing procedures that check for accurate claim data before submission.
– Track claims in process to be sure that –
- Payments are received, and
- Staff addresses delays or denials by fixing coding and billing errors.
- Verify copayment collections and in-force patient insurance to minimize errors and maintain revenue streams.
Coding or Billing Accuracy and Expertise Required
It is painfully obvious that accurate coding and billing submissions are the critical element in keeping income levels sufficient. Those with questions about “how to” must consider the two primary available options.
1. Improve staff training by offering additional education on the “how to” better ensure accurate claim submissions. Increase their knowledge of current diagnosis and treatment codes and create procedures that improve the quality of claims submission documentation
2. Outsource coding and billing functions to a top billing and documentation firm, such as M-Scribe Technologies, to ensure accurate claim submissions—and consistent income and cash flows. This option accomplishes multiple practice and provider goals
– Provides effective cost control of coding and billing expenses,
– Improves accuracy of claims submissions, and
– Minimizes claim delays and denials.
Option 1 involves more responsibility, cost and other demands on practice and hospital staff. Choosing this option can work if management is diligent and thorough. The downside is the time and money required to upgrade staff coding and billing expertise to more efficient levels. Further, during the necessary “learning curve,” revenues may decline to unacceptable levels.
Option 2 is often the best choice in the current changing healthcare provider landscape. Simply maintaining current revenue streams is challenging. Should the costs to do so spiral out of control, profitability may dissipate quickly. Increasing or maintaining current revenue must be matched by cost controls that prevent expenses from reducing profits.
Although not focused on profitability, nonprofit medical providers still need to exercise cost control. Since their margins and spreads typically are lower than those of for-profit practices, controlling operating expenses often is more important to nonprofit healthcare facilities. These tighter spreads between revenue and expenses dictate more, not less, cost control. Claim reimbursement delays and denials can be devastating to the sustainability of nonprofit medical provider organizations.
The critical nature of effective RCM systems cannot be denied. The future of healthcare providers depends on maintaining revenue streams and controlling costs. The policies, procedures and process that medical providers reach these objectives may differ. However, the best RCM system is the one that works for each organization.
The bottom line remains constant, however. Accurate coding and billing is the most vital element. Whether healthcare providers choose to accomplish this requirement in-house or by outsourcing these functions to the experts now becomes a “make or break” decision. The future existence and profitability of a practice depends on it.