To remain competitive in today’s healthcare marketplace, physician practices must not only provide the best clinical care to their patients, but also optimize the way they manage revenue, making sure they preserve cash flow, limit bad debt and receive full reimbursement for services rendered.
While most practices are comfortable focusing on clinical care, they struggle with revenue cycle processes—managing the business may not be a primary concern or strength for most physicians.
Several years ago, Capital Women’s Care (CWC)—a 45-site obstetrics and gynecology group practice operating throughout Maryland, Virginia and Washington, D.C.—was facing this challenge. We were committed to maintaining high quality care and wanted to grow our business, but our revenue cycle was not functioning to its full potential.
In order to stay nimble in these changing times, we needed to get our financial house processes in order. In response, we looked at both our front-end and back-end operations and put systems in place to improve performance from both perspectives.
Getting things “right” from the start
Front-end financial processes—eligibility verification, registration, patient payment and so on—set the stage for the rest of the revenue cycle. If an organization has strong front-end capabilities, then the back-end tends to flow more smoothly. As such, we aimed to make our upfront work as reliable, accurate and timely as possible, laying the groundwork for efficient billing and revenue capture.
For example, by automating eligibility verification, we decreased the number of denials due to lack of insurance. Using technology to check coverage proactively, we now know before the patient comes in the door whether he or she has insurance or whether we need to offer a form of financial counseling. It used to be that confirming eligibility was time-consuming and onerous, but the right technology makes this an easy and efficient way to reduce denial risk. Moreover, it puts our patients at ease, helping them understand their coverage parameters right from the start.
CWC also make sure to collect patient payments when required. Unlike some medical specialties, patient payment is relatively rare with obstetrics and gynecology. That said, we did see an uptick in patient responsibility about three years ago when high-deductible health plans became more common. If a patient does have a co-pay or deductible, we collect that money upfront. In the case of obstetrics patients—whose treatment runs nine months—we collect payment at the first visit, making adjustments as necessary once the baby is born.
To ensure front-end processes consistently go according to plan, CWC now provides regular staff training. For instance, we walk staff through the different payer requirements, showing them each insurance card and talking about what to do when a patient presents with a certain type of insurance. Well-trained staff is key to effectively capturing patient information, verifying coverage and accepting payment, and we make sure our staff have the tools they need to complete this successfully.
Outsourcing the back end
While CWC manages front-end operations internally, the practice outsources its payer billing efforts. We wanted to build an effective and efficient back-end office that would serve as the backbone of our revenue cycle. However, we found it challenging to keep up with all the changes in the field due to emerging technology, evolving regulations and shifting payer rules.
Outsourcing gives us a practical alternative to keeping things in-house, allowing us to rely on an expert whose sole business is revenue cycle management. This frees us up to focus on expanding our practice and supporting providers in high-quality clinical care for patients.
CWC’s revenue cycle partner processes the practice’s claims—amounting to several million dollars a year—electronically. To optimize claims submission, the company leverages technology with detailed front-end edits that proactively verify each claim houses the required information in the right place, reducing the number of rejections and denials and speeding cash flow.
CWC is also vigilant about denials management. Although there are fewer denials than before, they still occur and our outsourcing partner has dedicated staff working them every day, clearing inventory within 48 hours. In addition to resolving specific problems, the company tracks the kinds of denials that are occurring, looking for possible trends. If a pattern emerges, the company researches it to find the root cause and collaborates with CWC to proactively resolve the issue. Many times this necessitates reaching out to the payer, which CWC handles due to our closer ties with insurance companies.
While organizations can sometimes shy away from outsourcing due to concerns around losing control of their revenue cycle, CWC has found the opposite to be true. Our partner sends frequent reports showing our days in accounts receivable, denial turnaround time, phone calls handled and so on. Not only does this help us keep tabs on their performance but our performance as well. We have a collaborative relationship and if there are any issues to work through, we tackle them together.
Preparing for the future
As a result of its two-pronged approach to revenue cycle management, CWC has seen notable outcomes. Before we began outsourcing our backend processes, our days in A/R were over 100. Now we consistently see rates of less than 20. We also have about a 99 percent collection rate.
In addition to stabilizing its financial operations, CWC is also building the foundation for future growth. Because of our strong front and back-end revenue cycle, our organization is more attractive to new providers and potential partners. Providers come to us seeking membership because they see how we effectively manage both the clinical and business sides of the practice. This has allowed us to expand our business and prepare for the coming changes in healthcare.
Debbie Redd is the chief executive officer of Capital Women’s Care.