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Improving your revenue cycle efficiency

Modern medical practices are experiencing immense pressures as a result of increased regulatory scrutiny, changing reimbursement mechanisms, and a shift toward more patient-focused care.

Revenue cycle management is particularly challenging, given all the complex rules, the number of people involved, and the tools and systems used to capture and process the information, according to Kevin Don, executive director, revenue cycle, for Falck USA.

Revenue cycle management is defined as all administrative and clinical functions that contribute to the capture, management, and collection of patient service revenue.

“Effective management of the revenue cycle is becoming more critical as various operational pressures arise,” he says, adding that it requires an investment in people, processes and technologies in order to ensure proper revenue resource allocation and compliance.

Some of the challenges faced by modern medical practices include:

  • Financial conditions that require reductions in costs to maintain operations.
  • Incremental changes which are not sufficient to support the needs of the practice or organization.
  • Lower reimbursement that requires providers to explore additional revenue sources.
  • The fact that access to talent across core revenue cycle competencies is difficult to acquire, retain and coordinate.

“Practices can lose up to three to five percent of their net revenue from insufficient revenue cycle management processes and procedures,” he says. “The largest amount of revenue loss can probably be attributed to just poor data capture at the start of the revenue cycle, typically at a time of scheduling, preregistration, or check-in.”

What can a medical practice do to contain costs and increase revenue collections in today’s financially challenging healthcare environment?

Possible solutions, according to Don, include centralizing your operations; standardizing and automating processes; focusing on the front-end patient experience; and engaging your physicians.

“Based on my experience and perspective, there really isn’t a one-size-that-fits-all solution. However, it does start with understanding the basics of revenue cycle management and what those key success factors are.”

Key functional areas include front-end (pre-visit and point-of-service functions); mid-cycle (coding and charge capture); and back-end (billing and collections.)

Don says some of the key differences between a high-performing organization and a lower-performing one can be reflected through essential management elements such as staff accountability; management/governance; transparency/reporting; an effective revenue program; and vendor management.

“Effective management requires shared focus and accountability across the entire organization,” he says.

The further an error travels—such as collecting incorrect patient insurance information at the time of scheduling—the more costly it’s going to become for your practice to recover revenue for services rendered.

According to Don, one of the most common front-end function pitfalls relates to appointment scheduling. Problems here include inconsistent usage of scheduling templates leading to scheduling backlogs, underutilization of providers, and ineffective data capture.

Keys to success in that area include standardizing appointment and scheduling templates and working with physicians to determine what their overall rules are for seeing patients, and how long it takes to do so.

Another pitfall associated with registration and eligibility involves having inconsistent processes for capturing the required level of information from the patient and failing to verify information for accuracy.

Proper staff training can help address these problems, according to Don.

A third pitfall relates to referral management. This comes down to improper identification of payor requirements.

The fix for that issue includes providing training, education, and enhanced staff accountability.

Pitfall number four relates to arrival and check-in. It includes inconsistent verification and data collection, failure to collect previous balances, and placing patient service over fiscal responsibility.

Again, training, education and accountability can help alleviate this problem. Don suggests providing staff scripting for patient collections, posting point-of-service payments at the site of service and configuring your billing system to notify staff of previous balances.

The final pitfall pertains to the patient care event and checkout. Problems include limited physician engagement and letting patients leave without a formal administrative checkout.

Don says such problems can be alleviated by providing physician education, reinforced by system notifications, and requiring patients to stop at the front desk after each visit.

Mid-cycle pitfalls relate to:

  • Coding and documentation, including insufficient provider documentation and improper provider tools and education for coding. Fixes include providing ongoing coding and clinical staff training and timely updates to medical record templates.
  • Charge capture and/or charge entry: Problems include insufficient coordination with clinical departments/practices; high charge lag days; and missing charge tickets. Fixes include having an order entry procedure with no deviation; real-time charge submission through electronic health records; and standardized encounter forms across all clinics.

On the back end, pitfalls are encountered in:

  • Claim edit and submission: Problems include failure to utilize electronic claim submission; misunderstood paper and electronic claim programming requirements; and inadequate management of claim rejection edits. Fixes include using electronic claim submission whenever possible; ensuring a comprehensive registration process; and having a simplified process for secondary insurance submission.
  • Payment posting and cash management: Pitfalls include having poorly-trained staff; high backlogs of unposted denials and zero-pay remittances; and minimal batch reconciliation procedures. Fixes include providing ongoing training to staff, with regular quality audits; using electronic remittances; lockbox services to sort mail and deposit checks; and daily reconciliation of deposited cash to posted batches.
  • Insurance denials and follow-up: Pitfalls include failure to utilize billing system efficiency functions; failure to aggressively appeal insurance company denials; and failure to monitor follow-up on staff performance and productivity. Fixes include prioritizing accounts receivable follow-up; creating standard forms and letters; and developing working relationships with insurance companies.
  • Patient inquiry and self-pay follow-up: Pitfalls include having an imprecise patient collections cycle; inconsistent time-of-service collections; and high levels of bad debt. Fixes include maximization of inbound and outbound call technology; establishing a firm self-pay policy allowing for minimal deviation; and engaging third-party vendors.

“You have to be committed to measuring and monitoring performance in order to make the process adjustments that are necessary within each of your practices and to be able to set appropriate goals to obtain for your teams,” says Don. “But more importantly, frequent reporting will allow each of you to identify some of the concerns before they become bigger issues.”


Effective revenue cycle management is heavily influenced by the quality of your practice’s personnel. Don recommends implementing workforce management best practices to minimize costs, exerting extra due diligence when hiring new staff, and upgrading your employee handbook, orientation, and training materials to reflect process changes.

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