What is a proactive revenue cycle?
The Proactive Revenue Cycle is about increasing revenue and operating margin by adopting an aggressive approach to identifying and correcting errors and all active third-party payer sources prior to or soon after the point of service. By enhancing your team’s ability to identify and correct errors, and identify all third-party payer sources before or soon after the point of service, it become much easier to grow your bottom line while providing a better patient experience.
Unlike the reactive approach common in healthcare today, the proactive revenue cycle makes it easier to reduce initial claims denials, final denial write-offs, and the amount of self-pay or self-pay after insurance denials landing in bed-debt.
Information leading to a clean claim and reimbursement is more difficult and costlier to obtain retroactively. To get a better understanding, let’s focus on a few key areas:
Denials due to demographic errors
When an initial claim is submitted and denied because of demographic errors, the responsibility usually falls on the denials management team to gather that information. The money invested in generating, submitting, and following up on the claim has already been lost. Now additional investment is needed to find correct information.
If demographic errors can be identified and corrected before a claim is generated, the initial investment is enough to get the claim accepted the first time. No additional investments are needed to find accurate information and the claim gets paid sooner.
Denials due to insurance policy errors
Sometimes, denials occur because an insurance policy is inactive, the patient wasn’t eligible on the date of service, or simple typos occurred when entering the information. This is another situation where, when the denial occurs, someone needs to find the right information after the fact. Once again, the investment in generating, submitting, and following up on the claim has been lost and additional investments are needed to get the right information.
By making sure the insurance policy information is right before generating a claim, you can capitalize on the initial investment, prevent the denial, and get the claim paid sooner.
Coordination of Benefits (COB) Denials
Getting a denial because the patient has a primary payer is both frustrating and costly.
By knowing all the patient’s payer resources before-hand, you can sequence the payers properly and avoid get paid sooner.
Prior-authorizations are difficult enough. Retroactive authorizations are nearly impossible to obtain.
If you know all the patient’s resources before service, you can identify any authorization needs and submit requests in a timely fashion.
These are a few examples of how being proactive helps avoid additional work, overhead, and increases the likelihood that you will be paid for your services in a timely fashion.
Finally, being proactive helps address some of the primary areas of tension between departments. The patient financial team often feels the patient access team passes mistakes on to them, creating additional work. The patient access team often feels unjustly scrutinized while trying their best to get it right the first time. Supporting the proactive revenue cycle makes it much easier for the patient access team to gather and pass clean information to the next steps in the cycle.
Being proactive means having this information prior to or soon after a patient arrives for service and before a claim is generated.
The proactive revenue cycle
The Proactive Revenue Cycle represents a comprehensive approach to ensuring you get the most revenue possible for the services you provide.
It involves identifying and correcting errors leading to initial claim denials and identifying all active payer sources available to the patient regardless of the information provided or captured. Being proactive means having this information prior to or soon after a patient arrives for service and before a claim is generated.
The Proactive Revenue Cycle consists of four stages; discovery, verification, correction, and follow-up. A vital aspect of creating efficiency is automating everything possible so your team can focus on high-level tasks. Organizations use The Proactive Revenue Cycle to increase their bottom line by making it easier for patient access teams to collect as much information possible and make sure that information is as accurate as possible.
From the business perspective, The Proactive Revenue Cycle represents growth and reduction: Growth in revenue with reduction in overhead.
Reactive practices are costly. Entire teams are devoted to reacting to mistakes identified long after the patient leaves or a claim has been denied, making it much less likely to obtain the necessary information. The likelihood of getting paid is reduced for each day that passes. Meanwhile, not identifying all available third-party payer sources increase the rate of self-pay and self-pay after insurance, which directly contribute to bad-debt.
When the entire revenue cycle team embraces the proactive approach, information flows seamlessly. Information coming out of patient access is as clean as it can be and the patient financial service team can focus more time and effort on getting paid. Both teams reach objectives more often, reducing the pressure they feel from always climbing uphill. Revenue grows by reducing denials and identifying more third-party billing opportunities and overhead is reduced as everyone can be more efficient in their work.
Supporting The Proactive Revenue Cycle
Any initiative requires an infrastructure to be successful. It will be up to the leadership team to get their team’s buy-in for The Proactive Revenue Cycle and imbed it in to the organization’s culture, but tools like Databound’s boost verification & discovery and ClaimScout make on-going efforts much more effective. Any tools you choose should:
Your organization’s top payers should be checked to identify any active coverage that had been missed. In doing so, you find active policies for patients thought to be self-pay and any secondary policies that weren’t previously identified. Your tool should:
- Check all patients, regardless of insurance status.
- Connect directly with payers for the most accurate and up-to-date information.
- Organize information in the easiest to use formats for your teams.
All patient and policy information needs to be verified for accuracy before or as soon after the patient’s visit possible. Verification should be automated to reduce the need for human intervention and should verify the following:
- Patient and policy information matches between the provider and payer.
- Co-pay and deductible amounts.
- Collect any discrepant information and organize in to easy-to-use formats for your team.
Once information is verified and additional coverage is found, corrections can be made before information moves through the cycle. To make correcting information easier, your tools should:
- Create worklists that focus on tasks requiring human intervention.
- Be distributed to relevant team members so they don’t have to search for it.
When insurance information has been verified, additional coverage found, and corrections have been made, due diligence has been given to everything other than clinical information. At this point, your claim has been submitted and it is time for pro-active follow up so you can respond to anything requiring attention as soon as possible.
Your follow-up tool should:
- Allow for customized rules to align workflows with payer rules.
- Continuously collect data through the claim’s lifecycle.
- Automate workflows that move the claim to the next level without human intervention.
- Create exception lists for issues that can’t be resolved with automation.
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