Running a medical practice can be a complex process. It requires a lot of due difference and research. Identifying potential risks and making informed decisions can be exceptionally challenging when valuing a medical practice. A complete analysis of the revenue cycle management process and the related KPIs help purchasers and equity firms determine the actual value of medical practice. In addition, healthcare firms need help with optimizing the RCM process. Here, the experts often identify the revenue missed due to poor RCM performance.
The amount of missed revenue is significant; healthcare debt collection agencies can help hospitals to find ‘hidden gems’ or medical practice businesses with significant upsides. In addition, the RCM experts can help you make more informed decisions about acquiring medical practices.
Here we’ll understand how financial performance ensures you make a sound investment when acquiring a medical practice.
How to accurately value a practice?
Acquisitions of medical practices are becoming increasingly popular. However, it’s essential to value accurately and appropriately when maximizing returns. This is where RCM comes into play. It helps to evaluate the effectiveness of medical practice by assessing its performance across various vital metrics, including:
RCM analysis helps potential buyers understand how well a practice is performing and whether or not it is worth investing in. In addition, the expert should be able to identify whether the practice has been under or over-coding. This results in either under or overstated revenue.
Revenue cycle management companies can compare the performance of the target practice to its peers. These firms also project what the practice’s collection should be when the RCM process gets optimized. The revenue debt can be over hundreds of thousands or more, depending on the firm’s size.
RCM experts should provide valuable insight into the actual value of a medical practice which can be used to inform an appropriate valuation for private equity.
Impact of robotic process and automation
It’s essential to look at productivity holistically. The first step here is to improve the collection rate. Healthcare debt collection agency does it by enhancing digital governance and automated workflows. With automation, collection agencies can improve digital governance and automated workflow, keeping them focused.
You must utilize intelligent machine learning and AI-driven robotic process automation systems. By leveraging machine learning and artificial intelligence capabilities, collection agencies offer multiple use cases when automating eligibility verification, data entry, medical coding, payment posting, account receivable management, denial management, and appeals.
Myths about misconception
Most people need to realize that automation requires ongoing support. Changes in the underlying environment may lead to issues with re configuring or changing the bot. Meanwhile, a considerable backlog building up can impact the organization’s financial health.
With adopting robotic process automation dramatically, broken bots can affect your business function’s performance. While, on one side, there can be issues of bots losing relevance due to changing business scenarios, there can constantly be evolving automation frameworks that automaton engineers can use to reduce human work efforts.
The team members must contend with the issue of designing bots for scale and change. Service providers need to gain healthcare process knowledge so that the implementation can be faster. A professional healthcare debt collection firm takes a differentiated approach to contracting for actual outcomes.
Revenue cycle management process
Revenue cycle management consists of different steps. As a result, there are many opportunities leading to errors. Any error may delay the provider’s reimbursements from insurers and patients or halt reimbursement altogether.
Pre-authorization and eligibility verification
The healthcare provider collects information to establish a patient account. It includes collecting the patient’s insurance information and verifying their overall eligibility. Revenue cycle management companies accurately complete the patient intake step, even when a patient already has an account with the provider. Inaccurate information results in a denied claim. This clearly states that more work for the provider.
Charge capture and coding
Charge capture is where medical services are transcribed into billable charges using universally accepted medical codes. Moreover, health insurance firms determine the overall reimbursement amount in these procedure codes. Therefore, the insurance firm may accept the patient’s claim with proper medical coding.
Delayed provider reimbursement can cost the provider time, and money as denied claims must be investigated and appealed. You can ensure correct medical codes to avoid denials by running effective revenue cycle management.
Claim submission
When a patient’s medical service gets adequately coded, the claim is sent to the insurance company for further approval. Revenue cycle management companies ensure the claim submission happens as quickly as possible. You can now track and manage the claim from the start of the process.
Collection of payments
When the patient’s claim gets approved, the insurance company reimburses the provider based on the patient’s eligibility. The provider is responsible for contacting and collecting patient payments when there’s any remaining balance after the insurance.
Revenue cycle management expedites billing processes by streamlining claims processing. Due to the increased focus, RCM puts on front-end tasks, including insurance eligibility verification, patients understand from the start what out-of-pocket expenses they’re responsible for paying. Again this allows you to avoid any delays when collecting payments.
Medical services review
Running through revenue cycle management encourages providers to analyze clinical treatment data. Analyzing this state allows providers to pinpoint steps where errors are made and identify ways to cut down expenses. This also increases provider revenue and enhances the patient experience in the long run.
The benefit of healthcare revenue cycle management
Effective revenue cycle management ensures that these steps are performed thoroughly and accurately to help providers delay or lose revenue. Here, the main goal is to enhance provider revenue; it delivers other benefits in the process.
These benefits serve the providers and patients, providing revenue cycle management processes with even greater value.
Resolving coding errors
When implementing RCM, many providers can quickly identify where errors occur in the medical billing process. This decreases the likelihood of any future denials. Here, claim denials are due to easily preventable technical issues, including missing information in the patient’s chart.
Providers can receive reimbursements if these billing errors are avoided and claims are approved after submission. Therefore, you don’t need to spend extra money when investigating and appealing denied claims.
Administrative burden
Prevention of claim denial keeps the administrative burden at the least. With the help of revenue cycle management companies, you don’t need to spend time and energy investigating and appealing denied claims.
RCM also focuses on front-end tasks and simplifies interactions. For example, appointment scheduling, intake form completion, claims submission, and medical billing are streamlined for a more satisfactory experience.
Cut healthcare frauds
Another significant benefit of RCM is preventing any healthcare fraud and abuse. Healthcare fraud costs billions of dollars. Besides, a fraud investigation can cost healthcare firms their revenue and reputation.
Whether intentional or unintentional, inaccurate medical coding may lead to fraud, and providers may upcode procedures. This also means requesting a higher reimbursement rate for services that don’t necessarily merit it. Meanwhile, your healthcare debt collection team can keep providers up-to-date with ever-changing healthcare regulations.
Avoid fraud
The number one reason for healthcare fraud is patient dishonesty. This may occur in two ways:
- Inaccurate information
A patient may lie about insurance coverage in order to receive non-covered services. Insurance verification is the first step here. This means that any inaccurate insurance coverage gets quickly detected.
- Medical identity theft
Identity theft is a concerning factor for the healthcare industry. However, revenue cycle management starts with verifying patient information; any occurrence of identity theft gets detected and addressed early in the process. Medical providers may also take an additional step when verifying the patient’s identity during the pre-authorization phase of the revenue cycle.
- Increase revenue growth
You can expect prompt reimbursements for their services when you can avoid technical errors, claim denials, and fraud investigations. Here, you no longer need to avoid spending thousands of dollars on resolving errors, appealing claims, and investigating fraud. Instead, now, you can invest in patient care. Quality patient care must be the healthcare service provider’s top priority.
- Tools for providers and patients
The overall aim is to enhance the revenue work to benefit the patient. Revenue cycle management increases provider revenue while decreasing the time spent on administrative and clinical functions.
Healthcare firms must choose a professional agency. Remember, with expert payer contract negotiators, you can have all the tools to ensure a more streamlined revenue flow.
Conclusion
The healthcare system is in a constant state of evolution. Healthcare service providers include tech-enabled and tech-led solutions helping ease pressures and put them on the path of profitability. Working with a competent and professional RCM firm can provide a bang. In addition, a professional revenue cycle management company can help to reduce errors and delays in the billing process.