By: Bri Driggers, Juan Arredondo
The mark of success for a revenue cycle is receiving full and timely reimbursement. But the question is, “How to Improve revenue cycle management to make sure you’re fully reimbursed and on time?” The answer may seem complex, but it comes down to accurate medical coding. Medical billing and coding are two of the most crucial factors of the revenue cycle, yet the importance of coding accurately is often not monitored, assessed, or facilitated as much as it should be. Accurate medical coding means clean claims, prompt reimbursements, and an overall positive bottom line. Any coding errors throughout the medical billing process can lead to lost revenue.
Medical codes support the claim that is submitted to a patient’s insurance for the services completed at a medical practice. The financial operations of medical practices are driven by the claims paid by patients or insurance companies. It can take weeks or even months for a medical practice to be reimbursed in full depending on different coding factors such as: diagnosis, treatment, selection of medical codes, and dealing with potential claim denials due to coding errors. Therefore, it is important to submit the correct codes the first time and receive full reimbursement as quickly as possible.
What is the Revenue Cycle?
The revenue cycle process encompasses everything from patient registration, to documentation, to completing payment for the services rendered. Coding is the heartbeat of the revenue cycle with the ultimate step of receiving reimbursement. Getting payer reimbursement for your services is essential to keep operations running. It is equally as important to the patient who is relying on payer support for their procedure costs. This is where the revenue cycle process plays its most significant role. The Revenue Cycle Process is broken down into five steps:
Step One: Pre-Authorization and Eligibility Verification
The first point in the revenue cycle is gathering the patient’s insurance and financial information for pre-authorization during registration. Price transparency and utilizing insurance verification tools can improve this step within revenue cycle management by giving the patient the most accurate information possible before any services are provided. Patients who are not expecting to receive charges rendered may refuse or take extra time to complete reimbursement after battling with their insurance, or even your practice. Ensuring comprehensive information is gathered in the first step of the medical billing process is key to success.
Tips to improve this step:
- Price Transparency
- Insurance and Pre-Authorization Verification
Step Two: Services and Charge Capture
Once a patient has received care, the second step of revenue cycle management is to input the correct medical billing codes. This process is called charge capture. These codes will be used for reimbursement, but also for capturing a comprehensive medical record for the patient. The patient’s medical record houses their full history including diagnoses, tests, and treatments. Clinical documentation integrity within a patient’s medical record is essential in the revenue cycle and patient care process. Ensuring coding accuracy upfront can save hundreds and sometimes thousands of dollars in claim re-work and administrative costs associated with claim rejections.
Tips to improve this step:
- Code correctly the first time
- Maintain a comprehensive medical record for each patient
Step Three: Claim Submission and Denial Management
Next up in the revenue cycle process: submitting a claim. Once the charge capture process is complete, the coded claim is submitted to the payer. If a claim is denied for any reason, it will need to be resubmitted as soon as possible, otherwise, it can lead to lost revenue. According to the Journal of AHIMA, unresolved claims denials cause an average annual loss of $5 million for hospitals. This represents up to 5 percent of net patient revenue. Additionally, there are charges incurred for each claim denial that must be reworked or appealed. Here is where correct coding upfront can save you valuable time and money. Avoid the most common reasons for denials and invest in quality education for your team. This step-in revenue cycle management can also be improved by using a quality medical billing solution to quickly identify common coding errors and course-correct them to prevent future denials from taking place.
Tips to improve this step:
- Invest in staff education
- Audit claims to ensure they are clean before submitting
- Utilize a quality medical billing solution to identify common errors and prevent future denials
Step Four: Payment
After the claim has been reviewed by the patient’s insurance, the payer will submit reimbursement, and the patient is then notified of the remaining out-of-pocket cost. This step should also include collections services from your RCM vendor to optimize patient payments and get your patients on track to recover from medical debt.
Step Five: Reporting
Receiving payment is considered the last step in the process of revenue cycle management; however, your practice also needs quality reporting to monitor the ongoing health of your practice. Analyzing data allows providers to identify any errors that may be occurring throughout the cycle and lower expenses due to denials, incomplete claims, or healthcare fraud investigations. This is where revenue cycle management is essential to optimize the processes from start to finish.
Coding Accuracy: The Most Important Piece of the Puzzle
You will notice that documenting the correct coding for patient services rendered is only one part of the entire revenue cycle process. However, correct coding is invaluable for both patients and providers.
Medical coding must accurately report the services provided and reflect only active diagnoses, comorbidities, and history that might affect patient outcomes. Conditions that no longer exist or have no effect on the patient’s care, such as visiting a specialist, should not be coded. Coding errors can affect the patient’s healthcare, insurance, and payments.
Coding accuracy is also crucial for the integrity of a patient’s medical record. This will tell a full story of the patient’s medical history and support medical necessity — which is essential for payment and authorization of future services. Medical coding guidelines and regulations, such as the National Correct Coding Initiative Annual Edits, are in place to ensure compliance and accountability.
Not only is proper coding important for precise patient care, but it also leads to more on-target reimbursement payments and prevents denials or delays in payment. This enhances clinical, financial, and administrative planning for performance monitoring. Accurate coding also ensures that quality data is provided for public health research. As highlighted in a 2020 Medicare CERT Report, 49% of improper payments were due to missing documentation or coding errors, which equates to revenue loss for the whole organization.
Correct medical coding is an essential step in the revenue cycle process and should always be a priority. It is beneficial for both the patient and the financial integrity of your practice. Clinical documentation integrity affects the entire revenue cycle, from providers to coders and billers to insurance companies and beyond. Working with the right organization can help you navigate the waters of finding the best coding consulting or other resources.
Revenue Cycle Coding Strategies (RCCS) offers a variety of resources to ensure your coding is compliant and your revenue cycle is optimized. In addition to quality online courses to invest in your staff’s coding education (available in partnership with Relias) RCCS also offers a variety of outsourced solutions for your practice. From coding audits and documentation reviews to coding professionals and expert resources, working with RCCS can ensure coding errors are caught quickly, or avoided altogether, to remain compliant and diminish potential lost revenue.