MANAGING REVENUE CYCLE PERFORMANCE
[Enhancing Medical Practice Cash Flow Conversion]
By Gary L. Bode
By David Edward Marcinko
Revenue is vanity … margin is sanity … cash is king – Unknown
Although providing high-quality care with improved outcomes remains the primary concern of all healthcare stakeholders, money matters; the maxim “no margin, no mission” still applies.
The foundation of strong financial health lies in effective management the cash conversions cycle and strong internal management is the basis of an enhanced revenue cycle. In practical terms, effective management means understanding the process and targeting the core of the revenue cycle in order to fine-tune and support fiscal health and business growth.
The Revenue Cycle Process
The processes of revenue and cash conversion cycles are grouped in three areas corresponding to the journey of a patient through the medical office or clinic system: the front door, the middle, and the back door.
1. Front-door processes: are termed patient access functions and revolve around scheduling, registration, pre-check-in and office access. When these processes are streamlined, the value is most evident to patients; but it is also vital to the revenue maintenance (and enhancement) of the practice. The most effective and efficient time to accomplish patient access activities is when patients and their caregivers are together. Patient access needs to be handled by highly skilled and motivated employees who can accomplish the office’s goals for information capture while carrying out patient service objectives. This is also the optimal stage for achieving denial management.
2. Middle processes: include disease management [DM], case management [CM] and health information management systems (HIMSs). Those involved act as gatekeepers to review the appropriateness of physician referrals and ensure financial clearance is established. CM and DM also involve developing a plan for monitoring to ensure it is timely and appropriate to the level of care. The HIMSs functions revolve around document management, coding, transcription, and charge capture. Financial performance can be significantly improved when case management and HIMS activities are optimized by using information technologies that are integrated with process and workflow. The end result can be an increase in revenue and reduction in regulatory risk.
3. Back-door processes: are termed patient financial services (PFS) functions and revolve around coding, billing, collections, follow-up and resolution. These are administrative functions that support the front-line caregivers and interface with external payers and patients to resolve outstanding accounts receivable. Back-door processes bring significant value by reducing administrative costs, increasing collections levels, and dramatically lowering the percentage of aged accounts receivable.
Practitioners and medical facilities seeking to improve their bottom lines through better-managed and enhanced revenue cycle operations in these three areas ¾ front, middle, and back ¾ usually encounter challenges with people, processes, and technology.
This chapter discussion therefore examines ways of enhancing larger healthcare entity revenues through the following:
- optimizing organizational structure;
- raising the bar through benchmarking; and
- adopting technology.
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