The economy, health reform, payer regulations and other sweeping industry changes are dramatically impacting healthcare practice revenue. These pressures have many healthcare leaders feeling overwhelmed. However, there are many opportunities for practices to take control of their revenue cycles. Here are five key steps providers can immediately employ to optimize their revenue cycle.

Step 1: Adopt integrated electronic health record (EHR) and practice management (PM) solutions
Practices that use integrated EHR and PM systems will have an advantage when new payment structures become widespread. Whether via accountable care organizations (ACOs), patient-centered medical homes (PCMHs) or other pay for performance programs, health insurers are transitioning to quality-based reimbursement rather than volume-based compensation. With an integrated solution, providers can capture charges at the point of care. Integration helps practices reduce the risk of data entry error and decrease the time to claim submittal. Closely linking clinical and financial workflows enables practices to more easily participate in quality-based reimbursement models.

Step 2: Manage denials
Denials come in many forms: Perhaps a patient is ineligible for a given service, or a claim has been miscoded. According to Medical Group Management Association (MGMA), it costs practices roughly $25 just to re-work denied claims. Verifying patient eligibility prior to a visit is one front-end strategy to reduce denials. On the back-end, practices must develop a routine system for denials monitoring. The key is to capture, analyze, and act on denial information.

Using an electronic claims clearinghouse that scrubs claims and also monitors them and delivers tools to help practices more easily manage denials can expedite reimbursement. Denials management must be ingrained into the daily, weekly, and monthly workflow – the goal is to eliminate the root cause of denials through improved workflow and technology – resulting in optimized revenue and minimized re-work.

Step 3: Improve patient collections
Collecting co-pays must be a priority. Determining patient responsibility at the time of service – co-pays, deductibles, outstanding balances – through technology solutions gives practices the opportunity to ask patients for payment at check-in. With some co-pays as high as $50 for an office visit, practices cannot allow patient-owed revenue to walk out the door. The same kind of kiosk technology now universal in airports offers another, familiar way to improve upfront collection of patient co-pays and outstanding balances, as well as increase check-in efficiency. Patients could then view their bills and pay with a credit card, eliminating the need for costly letters or phone calls.

Step 4: Use analytics
Providers must effectively utilize analytics to successfully navigate the new healthcare reimbursement system and drive meaningful results. Whether future compensation is tied to an ACO or another shared risk payment structure, practices will need to track, measure, and report cost containment efforts and improved patient outcomes. Payers are increasingly scrutinizing the diagnostic tests, imaging, and procedures for medical necessity and evidence-based outcomes. Practices with the right integrated PM and EHR solution can demonstrate improved patient outcomes in diabetes, high blood pressure and uncontrolled cholesterol. Practices can also monitor improvements through follow-up visits, or by linking to patients’ primary care organizations’ EHR systems or community health information exchange (HIE).

Step 5: Transition to 5010 and ICD-10
HIPAA Version 5010 is already here and organizations still are struggling to translate claims to the new EDI format. (For more information, see 5010: It’s Here!). The MGMA reported seeing a significant increase in claims denials since the switch at the beginning of this year, resulting in lower reimbursement despite successful tests last year. Working with the right clearinghouse can help your practice with the 5010 transition.

The transition from ICD-9 to ICD-10 is coming on October 1, 2015.  Practices should ensure their EHR and PM systems and vendors are ready. Vendors should provide upgrades to handle the influx of thousands of new codes and offer educational tools to help coding and billing staff prepare.

Remember…You’re in Charge
Regardless of what happens in the economy or healthcare industry, many aspects of optimizing your practice’s revenue cycle are within your control. The right technology vendor can help you manage the data, but they can’t do the foundational work for you. The real change must come from your team. Government and commercial payers are making strides toward quality-based compensation and when they are paying you for outcomes, you had better be able to measure them. Your revenue cycle will depend on it. Want to learn more about optimizing your revenue cycle? Download the RCM brochure.