As the healthcare industry continues to change and evolve, many hospitals are trying to adapt in order to maintain or increase their profits. With the increase of health plans featuring high deductibles and increased pressure on reimbursement rates, many health systems and hospitals have begun looking for any ways they can find to improve their collection rates so that they can bolster their finances within this new environment. Let’s take an in-depth look at 8 different ways for hospitals to improve their collection rates on small balance claims.
Start By Looking at Revenue Leakage
The first step to bolstering your profits is through identifying the leaks in your revenue cycle. Once these are plugged, only then can you begin to raise your bottom line. A great first step to take in terms of achieving this goal is to look at write offs for claims denials that you weren’t able to appeal due to a failed process or missing data. These write-offs are basically lost revenue, and they will significantly decrease your collection efficiency. By putting the focus on refining your process and making sure the right data is initially collected, it can be possible to minimize the amount of lost money within your revenue cycle.
Make Sure You Are Getting Paid Correctly
When you’re locked into contracts that make you bill an established fee schedule, you should be billing about 20 to 30 percent higher than you’re contracting. This allows you to minimize any chance of not picking up changes within the fee schedule. A good AR management team like eReceivables can take care of this for you.
If your payer is paying only the billed amount, this is an indication that you might be billing under the rate that was contracted. This is not good for your bottom line, because it means that your payer will only pay the amount that’s been billed on the claim, rather than the total contracted amount. In essence, if you are billing under the contracted rate, you are leaving money on the table for your insurance company.
Always Collect Up-Front
No matter how small a payment is, always collect it up front when possible. It’s now easier than ever for hospitals to do this, considering the fact that there are now estimation tools and payment plans with zero-interest options which empower your front line staff to make a real difference when it comes to collecting payment up front. This will mitigate the accounts receivable you can otherwise have floating in limbo.
Focus Your Efforts On Patient Collections
This might not seem like the best strategy at first, considering that there is a lot of competition for patient money, which might make it seem like a difficult challenge to collect. But if you focus your efforts on improving your strategy for collecting payment from patients up front, you can drastically improve your rates for collecting “after insurance” balances.
Bill Your Patients in Ways That They Prefer
Billing in accordance with patient preference generally pertains to electronic billing systems. The entire world is going electronic, and you should not expect your patients to break out their quill pen and ink so they can make out a check and have it sent by carrier pigeon to your office. Ok, that’s a bit of an exaggeration, but most people today prefer electronic billing methods to almost any other type of billing, mostly because of convenience and speed. When your billing method is easy to understand and clears quickly, your collection rates will greatly increase.
Keep Track of Your First Pass Payment Ratio
Having to submit billing claims multiple times can have a significant impact on your overall cash flow. It can either cost you a lot of working hours when you go through the process of submitting your bills, or you can save yourself a whole lot of cash on hand if you can make sure your bills get paid on your first submission. Therefore this avoids the appeals process and denials management as much as possible.
You should also strive to understand your denials and what’s causing them. Look for what you can control and what can be solved by proper training. You should also see if you can do online verification for eligibility and if you can receive edits from your clearinghouse.
Improving collection rates is something most hospitals strive to accomplish, but many don’t know all the steps to follow to boost these rates. The best place to start is by plugging revenue leaks and confirming correct payments. You should also collect payments up front and place some emphasis on patient collection and your first pass payment ratio while providing your patients with a way to pay that is convenient for them. If you follow all these steps, you will be well on your way to improving your revenue cycle management and significantly boosting your financial performance.