8 Steps to Improve Revenue Cycle Efficiency

The AMA wants to help relieve a major practice stress point.

authors Lynne Jeter

Editor’s Note: This article is part of a Medical News exclusive series, “Who’s Tending Our Doctors?” to focus on ways the industry can help alleviate physician stress and allow physicians to return to the joy of practicing medicine.


Even though patient care is top priority for doctors, administrative drills remain a nagging worry. To take the pressure off the financial side of a medical practice, the American Medical Association (AMA) recently launched a module on revenue cycle efficiency in the AMA STEP Forward series, aimed at making life easier for physicians nationwide.

“An efficient revenue management system is critical for your practice’s financial health and sustainability,” said Christine A. Sinsky, MD, FACP, an internist with Medical Associates Clinic, a multispecialty group practice with sites in Iowa, Wisconsin and Illinois, and the AMA point person for STEPS Forward. “Electronic methods can streamline revenue-related processes, such as eligibility checks, claims submissions and payments, all allowing your practice to maximize the amount of time available for patient care.”

To improve revenue cycle efficiency, doctors may follow eight steps:

  1. Select a practice management system (PMS) that fits your needs.
  2. Verify insurance eligibility electronically before every patient appointment.
  3. Reduce prior authorization burdens through electronic transactions.
  4. Submit claims electronically to save time and money.
  5. Determine the status of submitted claims.
  6. Leverage electronic remittance advice (ERA) to simplify processing of payment information.
  7. Review electronic payment options and make an informed choice for the practice.
  8. Maximize collection of patient payments.

“As with any technology selection, the ‘right’ PMS for your practice is the one that will best meet the needs of you and your staff,” said Sinsky. “Whether purchasing your first PMS or changing to a different product, first turn your attention inward to your practice. Soliciting input from all staff who use and interface with a PMS and including them in the selection process will ensure that you pick a vendor and product that matches your practice’s priorities and needs. A thorough analysis of your practice’s revenue cycle process and workflow will provide valuable insight into your system’s requirements. Additionally, this type of analysis will help to identify opportunities for automation through the PMS that will improve the efficiency of your practice.”

Verifying insurance eligibility electronically before every patient appointment is greatly underrated.

“Ideally, this eligibility check should be performed electronically,” said Sinsky. “Although most health plans allow patient eligibility to be verified over the phone or via a health plan web portal, these methods are often inefficient and may not provide you with all the necessary information.”

Because reducing prior authorization burdens via electronic transactions dovetails nicely with the AMA’s belief that prior authorization is overused, the AMA urges health plans to limit the use of these programs to true utilization outliers, instead of broadly applying coverage restrictions to all practices. To reduce the physician’s time spent on prior authorizations, the AMA recommends incorporating a team-based model into the practice routine. (Medical News will cover the team-based model in 2016.)

“Ideally, a physician will be aware of drugs’ prior authorization requirements before sending a prescription to the pharmacy, which minimizes the chances of patient medication nonadherence,” said Sinsky, pointing out that electronic prescribing system vendors are in various stages of implementing electronic prior authorization technology.

To save time and money, submit claims electronically.

“Healthcare claim submission used to require a cumbersome, manual process of completing a paper form, mailing it to a health plan, and waiting – sometimes weeks! – for a response,” said Sinsky. In addition to time and cost savings, “electronic claims submission often speeds heath plan adjudication and payment.”

Determine the status of a submitted claim via the electronic claim status inquiry to confirm receipt of submitted claims, and to garner claim status.

“Health plans are required to support real-time claim status processing,” said Sinsky. “To electronic eligibility inquiries, practices can also send ‘batch’ transmissions to health plans to check the status of multiple claims at the same time. By law, the practice must receive a response by the next business morning, although some practices report receiving these responses much sooner. Rather than waiting two or more weeks before taking action on a submitted but unadjudicated claim, using the electronic claim status request provides the practice with an immediate status report on the claim. The practice can then fix a problem, resubmit the claim and lower the days in accounts.”

Leverage the ERA, an electronic version of a paper explanation of benefits (EOB), to simplify processing payment information.

“Manual reconciliation processes and sifting through stacks of paper EOBs can be sizable administrative hassles,” said Sinsky. “The standardized ERA offers a way for practices to reduce these burdens, more quickly identify those claims that require reworking, and generally have staff spend more time on higher-value activities.”

When determining electronic payment options, consider the hassle attached to paper checks, a time-consuming activity that’s ripe for fraud.

“Using electronic payment can simplify your practice’s revenue cycle and lead to faster payment from health plans,” said Sinsky, pointing to the industry standard Automated Clearing House electronic funds transfer (ACH EFT). “However, be aware of the benefits and risks of various electronic payment options to make the best choice for your practice.”

For example, even though health plans and their vendors may offer supplemental “value-added” services for an additional, percentage-based fee, all health plans are required to offer basic ACH EFT upon physician request and at no additional cost beyond a nominal, per-transaction banking fee of approximately 34 cents.

“In addition to ACH-EFT payments, health plans frequently use virtual credit cards (VCCs) for physician claims payments,” said Sinsky. “Practices are charged interchange fees of up to 5 percent of their total payment to receive these VCC payments. In some cases, health plans are receiving cash-back incentives of up to 1.75 percent from the credit card merchants for using this payment method.”

Collecting payments at the time of service is the vital first step in any effective patient collections strategy.

“Especially because of the growing prevalence of high-deductible health plans leaving many patients to bear additional financial responsibility for their treatment, doing so will increase your practice’s cash flow, decrease accounts receivable, and reduce billing and back-end collection costs,” said Sinsky.

In summary, “Every workflow that a practice converts from manual to electronic process will save valuable time and resources while also reducing the overall administrative burdens of practicing medicine,” said Sinsky.



AMA: http://www.ama-assn.org/ama

AMA Steps Forward: https://www.stepsforward.org/

AMA Steps Forward/Revenue Cycle Management Module: https://www.stepsforward.org/modules/revenue-cycle-management


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