How small medical practices can address five of the biggest RCM challenges
All healthcare providers face financial challenges. However, small medical practices may be particularly hard hit when it comes to revenue cycle management (RCM). In small healthcare practices, the ripple effect of poor RCM processes is more like a tsunami. A single healthcare claim denial can wreak financial chaos. The absence of one RCM staff member can bring productivity to a screeching halt. A badly negotiated payer contract can force a healthcare practice to close its doors. For today’s small medical practices, there’s little room for error and inefficiency. That’s why it’s important to tackle these five healthcare revenue cycle challenges proactively.
1. Healthcare staffing shortages.
Given the ongoing challenge of healthcare staffing shortages, it behooves small medical practices to offer competitive salaries and other perks to retain the RCM staff they have. Frequent RCM turnover can lead to cashflow problems, compliance vulnerability, and added recruitment costs. New benchmarking data from the Society for Human Resource Management found that the average cost per hire was nearly $4,700. Some industry experts say the total cost could be three to four times the salary for the position. This expense is not something most small medical practices can absorb repeatedly.
In addition to focusing on staff retention, it’s also important to cross-train RCM staff as part of a small medical practice’s strategy to address healthcare staffing shortages. In small medical practices, clinical and administrative staff often wear multiple hats. Medical coders, for example, might also answer the phones, check patients in for their appointments, manage patient portal messages, or even bring patients into an exam room. It’s important to ensure RCM staff receive proper cross-training so they can step into these of these roles and handle tasks with ease. Cross-training in general helps small medical practices become nimbler when unexpected vacancies occur (e.g., due to vacation, resignation, or sickness).
Finally, RCM outsourcing may also be a viable option if the medical practice can’t secure enough RCM talent or the right type of RCM talent (e.g., an orthopedic practice can’t find coders with experience in this specialty). Outsourcing can help small medical practices promote revenue integrity while simultaneously reducing overhead costs and providing the ability to scale up during business expansion.
2. Suboptimal health information technology.
An EMR can make or break a small medical practice’s RCM processes. While it may be tempting to select the lowest-cost vendor, small medical practices end up paying the price in the long-term if the EMR doesn’t meet the practice’s RCM needs. Small medical practices must perform an honest assessment of their current EMR vendor. At a minimum, the EMR should include customizable and specialty-specific templates to save time and promote revenue integrity in fee-for-service payment models. However, it should also help small medical practices manage population health and qualify for incentive payments under value-based care initiatives. Might it be time to switch EMRs? Here’s a primer on what it might cost.
3. Unpaid patient bills.
More than half (55.7%) of American private-sector workers are enrolled in high deductible health plans. This means patients are increasingly responsible for all—or most—of the healthcare bill. Small medical practices must promote up-front collections when possible. Note: Up-front collections reduce the administrative burden on the back end and promote smoother cashflow. For remaining balances, practices should send clear and concise medical bills and provide patient-friendly payment methods, including the ability to pay online through a patient portal.
4. Claim denials.
All medical practices struggle with claim denials. However, the difference between small and large practices is that large medical practices are often aware of the problem and how to solve it. The most effective step small medical practices can take is to leverage the EMR’s claim scrubber to identify and fix any potential errors prior to healthcare claim submission. Equally as important is appointing a medical coder or biller to monitor health claim denials as they occur and address them as quickly as possible. Finally, small medical practices must be willing to invest in ongoing education for physicians and staff on how to ensure clean claims through comprehensive documentation and data integrity.
5. Payer relations.
Payer relations is also an ongoing RCM challenge for medical practices of all sizes and specialties; however, once again, small medical practices may be at a disadvantage because they sometimes lack bargaining power. Joining an independent physician association may be one way to address this challenge. Another is to simply take a more strategic approach to payer contracting. It’s also important to hold healthcare payers accountable. For example, some payers take longer to pay claims than others. If a medical practice’s average days in accounts receivable is 45, but a particular payer usually takes 70, this should be addressed.
Conclusion
Small medical practices continue to face many different RCM challenges. However, with the right technology and RCM best practices, these practices can survive and thrive. Learn how edgeMED can help and be sure to check the Healthy Snacks blog for more expert insights, best practices and industry trends.
