Top Seven Reasons Ambulatory Practices Leak Revenue
You may not be able to hear the slow drip, drip, drip of revenue leaking from your ambulatory practice – but chances are, it’s happening. Experts say revenue cycle inefficiencies eat up about 15 cents of every healthcare dollar — a number projected to jump to 33 cents by 2022, due to inefficient payment processing. Even the most buttoned-up practices could find opportunities trickling away where they least expect them.
Check our list of top seven reasons ambulatory practices leak revenue to see where your organization has the potential to improve.
1. You (and your patients) don’t always know they’re covered.
The #1 contributors to healthcare bad debt are self-pay accounts. The irony is that patients often have insurance coverage and just don’t know it. Checking for coverage can save you time, hassle and costs of trying to collect directly from patients.
2. You don’t validate insurance for every claim.
Denials are an undeniable headache. But did you know submitting unverified insurance claims is the number one source of payer denials? Locking in patient insurance eligibility will save the cost to collect later and increase your chances of getting what you’re owed.
3. You don’t collect payment from patients in your office.
If patients walk out the door without paying, they’re 20% less likely to pay – ever. Following up by mail could cost you up to $5-$10 per statement. A process for collecting on the spot will help plug a common revenue leak.
4. You work on everything instead of exceptions.
If claims are moving along as expected, there’s no reason to rock the boat. Yet many practices do, wasting precious time and money. A better idea is to use automation to notify your staff when claims are in danger of being denied. Another example: instead of trying to find coverage on every self-pay account, let your system tell you which ones have coverage so you can get a higher return.
5. Your staff checks claims status manually.
Checking claim status manually can take five to 12 minutes, making it a prime time-devourer. If your staff spends a lot of time on routine tasks or you don’t know how much they spend, you could have a costly leak. Automating claim status checking can take just seconds, reducing unproductive time and shifting staff attention to more valuable activities.
6. You don’t appeal denied claims.
Denials are one of the largest sources of healthcare revenue leakage. That’s the bad news. The good news is that 67% of denials are appealable.¹ If you’re among the 35% of providers who take this step, bravo. If not, you could be leaving money on the table.
7. Patients don’t pay their medical bills.
There are many reasons people don’t or can’t pay their medical bills. One big one: almost half of U.S. adults can’t cover a $400 emergency expense without selling something or borrowing money. Complex statements are another culprit. A survey of patients said 75% of bad debt is because of unanswered billing questions.² Easy-to-understand patient estimates, clear statements and palatable payment alternatives can help you capture the revenue you earn.
Knowing where revenue leakage is likely to happen in an ambulatory practice is the first step to stopping it cold. Up next: prioritizing opportunities based on investments and actions needed to make a real impact on the bottom line.
¹ Driving the Denials Management Initiative, a Renewed Focus, The Advisory Board Company, Washington, D.C., web conference, July 28, 2009
² “Trends in Healthcare Payments,” InstaMed Annual Report, 2014
This article was originally published on ZirMed and is republished here with permission.