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Using an RCM solution to maximize revenue, reduce administrative burden

Insight Article - June 23, 2022

Billing & Collections

Reimbursement

Practice Efficiency

Christian Green MA
Revenue cycle management (RCM) done poorly can contribute significantly to a medical group’s administrative burdens, and some inefficiencies have become even more pronounced since the start of the COVID-19 pandemic. Staffing issues have compounded errors often made during manual payment processes, documentation and coding, and claims transactions and prior authorization. All these factors can result in a considerable amount of lost income for practices. 

RCM challenges faced by Clinics of North Texas 

Clinics of North Texas, a physician-owned multispecialty group practice in Wichita Falls, Texas, has been in business for nearly 100 years. The clinic has 40 providers who practice in such specialties as cardiology, family practice, internal medicine, OB/GYN, occupational medicine, pediatrics and podiatry.

When she joined the practice in 2018, Melissa Huff, MBA, chief operations officer, recognized that Clinics of North Texas primarily used manual RCM processes, which contributed to many inefficiencies. “We were constantly trying to collect the money, trying to collect the outstanding balances … which stopped us from being able to run the organization effectively,” she said. “What we were doing was constantly retroactive … we were waiting on denials and we were waiting on appeals.”

Even before the pandemic, Clinics of North Texas had a high turnover rate with front desk staff, which impacted accounts receivable (A/R). According to Huff, the pandemic made it even more difficult to replace positions, as she noted the clinic received fewer applicants for staff and provider positions than they had pre-COVID-19, holding back hiring efforts.

The issue, however, went far beyond staffing. Even though the practice had 20 employees who worked in RCM, A/R was affected any time one of them was out of the office. It was also challenging onboarding and training new staff, as they had to learn practice policy and how each payer operated. In turn, this affected the production of staff members who trained new employees. “A/R days would be inflated, and chasing those dollars was just ridiculous,” said Huff.

Another sizable challenge for Clinics of North Texas was dealing with varied payer standards. For example, Huff specified that “there are many times that Blue Cross will not recognize a specific code, but every other payer will.” Rather than building a rule into its system to address a particular code, staff were instructed to kick it out and manually fix it each time.

Despite the practice’s RCM struggles, Huff said they weren’t convinced that they needed help with their revenue cycle process. “The decision was not easy to make; we really didn’t think we were doing that bad with our internal staff and our internal collections and A/R processes,” said Huff, who mentioned the group’s median days in A/R were more than 30.

Eventually, Clinics of North Texas recognized it could do better with the right RCM solution. But automation meant relinquishing full control of the RCM process. Therefore, according to Huff, they did their due diligence with several vendors before deciding. “We went through every detail, we went through every process that we did,” said Huff about determining how the group’s RCM could be automated. “We looked for systems that understood what we were talking about; understood some of the laws within Texas specifically.”  

Automation as an RCM solution


According to a Feb. 22, 2022, MGMA Stat poll, 40% of medical practices did not meet their revenue goals in 2021. Two of the primary contributing factors were staffing issues and slower reimbursement by payers, both of which can play a significant part in increased days in A/R.1


Those findings echoed a Nov. 9, 2021, MGMA Stat poll that found almost half (49%) of respondents said that their practice’s days in A/R increased in 2021.2 Several respondents said that they outsourced elements of their organization’s RCM. By doing so, practices can help address front office staffing issues and operational inefficiencies, while maximizing revenue.

Regarding the latter, Huff related that Clinics of North Texas’ executive team were concerned that money was being left on the table; however, the main goal of adopting an RCM solution was to reduce days in A/R, which would go a long way in reducing administrative burden. The practice wanted to “get the money in faster, get the claims out the first time clean, so we weren’t having to reprocess them and delaying payment, and of course we hoped it would increase revenue,” said Huff.

Before Clinics of North Texas decided on an RCM solution, stakeholders wanted to ensure that they were engaging in a true partnership; they wanted to find a vendor that took the time to assess and analyze their workflow and then optimize it. They also wanted a cloud-based tool that utilized predictive analytics to produce actionable, real-time data as opposed to end-of-month reporting.

Clinics of North Texas ultimately selected the same vendor as its practice management (PM) system, which was in use since 2010. But familiarity can only carry you so far; one of the big keys to success, according to Huff, was the vendor’s understanding of Texas payers. “They actually knew what we were talking about,” said Huff of their ability to handle certain situations. “We didn’t have to explain every process; we didn’t have to explain, ‘Blue Cross did this’ or ‘Aetna did this in Texas.’ They already knew that.”

Although implementation was time-consuming, Huff maintained that it was worth it because it allowed the practice to declutter its system. “Some of the insurance companies that we created in the very beginning that maybe weren’t set up correctly or were only used a couple of times, we were able to clean that process up, all the way down to specific payers and specific charges,” said Huff. The same held true for duplicate patients, who were taken out of the system. Much of this was done during training, which typically took place once a week, as supervisors gathered in a conference room and either spoke to the vendor’s implementation specialist in person or on the phone.

The RCM service team Clinics of North Texas works with communicates daily with the practice, ensuring that they are addressing all denials and payments, while keeping the practice apprised of any payer policy changes. “The RCM team comes in and they will notify us; ‘[for example], have you noticed that Aetna stopped doing this? Or have you noticed that they’re denying this one specific code?’ They go and they fight all of that; they just keep us informed on what’s going on with that process.”

RCM outcomes

Once the switchover to the RCM solution took place, Huff noted that Clinics of North Texas improved its annual revenue gain by 20% after initially anticipating 2% to 3% in the first year. Furthermore, the practice improved on the following outcomes:
  • Improved from an average days in A/R of 36 to 23 (with some providers down to 10 days)
  • A/R under 90 days improved from 16% in November 2018 to 56% in January 2022
  • 1.64% increase in gross collection rate.
 
The RCM team, beyond providing expertise and daily data analytics to the group to help pinpoint and address documentation issues, also worked with the practice to improve its workflow, helping to eliminate missing encounters, which typically ranged from $150 to $200 of gained revenue per encounter.

Finally, the RCM solution saved the practice time and allowed staff to focus on its core financial responsibilities, allowing them to work closely with payers on negotiating contracts. “We have entered into multiple incentive programs with payers, which we simply didn’t have time to do before,” added Huff.

Moreover, the practice now has time to look beyond those core financial responsibilities. “We’ve been able to look at other revenue streams such as making sure we’re capturing all our annual wellness visits (AWVs), making sure that we’re looking at other lines of revenue such as aesthetics and looking at other services we can provide that we hadn’t in the past that could generate additional revenue,” she explained.

The RCM solution has also provided more time for the practice to work closely with Texas Medicaid on claims, significantly reducing that burden. “We’ve been able to … figure out ways we can get claims sent in electronically and get them paid instead of constantly having them rejected, having to go to their website and enter some type of information,” said Huff about how much a difference automation has made.

Although Huff can’t quantify the amount of time automation has saved Clinics of North Texas, the practice has been able to reduce the size of its staff, reducing payroll costs. She also pointed to her business office director who, since the practice automated its RCM, isn’t spending most of her time putting out fires. “Her days are 100% different now,” said Huff. “She actually enjoys being the business office director instead of chasing stuff and defending that we’re doing what we should do, when we should do it, and how we should do it. That’s priceless.”

Notes:

  1. Good C. “An uneven recovery finds many medical practices struggling to hit revenue goals.” MGMA. Feb. 23, 2022. Available from: mgma.com/stat-022222.
  2. Good C. “Not-so-graceful aging: Half of practices saw days in A/R increase in 2021.” MGMA. Nov. 11, 2021. Available from: mgma.com/stat-111121.

About the Author

Christian Green
Christian Green MA
MGMA Writer/Editor MGMA

cgreen@mgma.com

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