In today's dynamic healthcare landscape, optimizing collections and cash flow is paramount for the sustained financial health and operational success of health systems. Efficient management of revenue streams is essential to ensure consistent cash flow, timely reimbursements, and minimized revenue leakage. Implementing strategic initiatives to enhance collections not only fosters financial stability but also facilitates improved patient care, operational efficiency, and the ability to invest in innovation. Here are ten effective strategies for health systems seeking to bolster collections and optimize cash flow.
#1 Create a comprehensive approach to patient access (PA) and financial clearance processes.
Evaluate to ensure your policies and procedures are documented correctly and to make sure you have standarized training in place. Address how you plan to handle common, reoccuring issues. A few items to evaluate:
Prior Authorization - determine if needed, and a clear process to obtain.
Calculation and collection of patient responsibility. Check for open accounts receivable (A/R).
Medical necessity checking and associated advanced beneficiary notice (ABN) process.
Charity care eligibility and enrollment process.
Closing the loop - are PA staff kept aware of back-end issues?
#2 Optimize your claim denials.
A work listing of only denials will result in an increase in net reimbursement versus reviewing denied charges on a diagnosis-related group (DRG) based payment.
Tracking, trending and central management of denials and the appropriate work-sessions (rapid improvement events) to ensure root cause is addressed and the appropriate assignment of accountability.
Denial codes assigned by payers may vary from the American National Standard Institute (ANSI) definitions, causing inaccurate remit posting leading to inaccurate/incomplete work listing and a host of other complications. Do you need a tool to make reassignments before being posted?
Remit posting and/or system settings may be causing delays or lost secondary billing opportunities.
Claw-backs and other credits may be posted inaccurately, causing lost opportunities to challenge the payer or re-bill the encounter.
Delays in correcting and re-billing denials may be causing lost write-offs.
It’s not uncommon to find lost revenue opportunities in the range of 1% of revenue.
#3 Establish correct patient status.
Accurately establishing the correct patient status (outpatient, inpatient, and observation) can have a material impact on net revenue and denials avoidance. Through data analysis and process observations, these opportunities can be identified, and processes built to avoid them.
#4 Ensure accurate remittance processing.
This function is often overlooked yet is at the heart of the revenue cycle: accurately posting remittances is essential to managing the A/R. Commonly found issues include creation of credit balances, mishandling of “zero pay” remits, lost tracking of denials, lost secondary billing, inaccurate handling of takebacks, Vendor anomalies on use of ANSI coding, mismatched lock box cash receipts to remit batches, and more. Accurate processes and timely posting can improve many downstream collections processes.
#5 Carefully set up the contract management application.
Managing complex reimbursement terms under payer contracts requires careful set-up of the contract management application. Specific areas for review include:
Review of all payer contracts in effect, including plans and products.
Modeling of contracts to ensure terms are understood.
Review and testing of current system set-up - how accurate is expected reimbursement?
Contractual Allowances - Frequency and value? Is policy uniform, accountable, and measured?
Are worklists aligned with management reports?
#6 Create and maintain secondary billing settings.
Building and maintaining system settings that trigger secondary payer billing can be challenging. Is close of business (COB) accurate? Are remits accurately posted? Is secondary billing being done quickly? Is it being reported separately?
#7 Manage A/R follow up.
Are worklists accurate, or are staff chasing zero-pay, aged, or inaccurate A/R? (pro tip: hosting a town hall meeting with the collections staff may be enlightening and insightful)
Can every associate understand ‘what is a good job'? Do they have individual and department wide daily/weekly/monthly metrics?
Outsource agencies - is their performance measured and tested? Are they cherry-picking, or digging deep?
#8 Accurately set up pharmacy charge capture to improve cash collections.
Is the pharmacy-to-PA systems interface accurate?
Are NDC codes, UoM, and pricing up to date?
Are there significant denials related to pharmacy?
Does the revenue integrity team spot-check pharmacy charges versus the clinical record?
#9 Improve or documentation, charge capture, and vendor management of Implantable Medical Devices.
Are purchasing contracts being adhered to?
Do units purchased versus units billed, balance?
Are reimbursement amounts and claim processes accurate?
Does the revenue integrity team test the clinical record versus charges?
#10 Establish comprehensive KPI’s.
Last but not least, KPIs- are you managing the business with accurate and timely information? Are you able to see trends well before an issue becomes a problem? Step back and decide - Am I getting what I need, when I need it?
In conclusion, the optimization of collections and cash flow is a multifaceted endeavor critical to the long-term success of healthcare systems. By implementing these ten strategies—ranging from embracing technology and streamlining billing processes to fostering patient engagement and enhancing staff training—health systems can significantly improve their financial stability and operational efficiency. A commitment to continuous improvement in revenue cycle management not only ensures sustained cash flow but also strengthens the ability to deliver high-quality patient care, innovate, and thrive in an ever-evolving healthcare landscape. Through these concerted efforts, health systems can pave the way for a financially resilient future while prioritizing the well-being of their patients and communities.
At Signature Performance, we can help you understand your third-party risks and exposures and partner with you to develop an ongoing TPRM strategy to better manage and mitigate the risks of your third-party partners. If you are ready to take the next step, contact us today for more information about our solutions.