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Insightful Revenue Cycle Stats and Charts

Posted on March 2, 2015 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

It never ceases to amaze me how many opportunities there are in medical practices to improve their revenue cycle management. You’d think we’d have solved this problem, but there is still so much opportunity to improve a practice’s revenue.

With this as the premise, I was interested in the revenue cycle management (RCM) survey report which offers up a number of stats and charts on such an important topic for practices.

Here’s one example chart from the report:
Percentage of Practices that Automate Revenue Cycle Management Chart

The thing about this chart that stands out for me is that almost all of them hover around 50% adoption. Some might say that this is pretty good adoption of these technologies. I see it as a huge opportunity for the other 50% of practices to adopt much of this technology.

The one that caught my eye the most is the “automated eligibility-inquiry checks.” Since reading Vishal Gandhi‘s posts on EMR and HIPAA, I’m a real convert to the importance of high quality, real time eligibility checking. Take for example his post on “The Eligibility Verification Time Suck” and “How Does a Practice Deal with All These High Deductible Plans?” This is a big deal for a practice’s revenue and is likely going to only get bigger as reimbursement continues to evolve.

There’s a lot more in the RCM survey report. Check it out and see how your practice can benefit from better revenue cycle management.

Healthcare Revenue Cycle Mastery

Posted on November 6, 2013 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

One of the trends I see happening today is many organizations focusing too narrowly on things like meaningful use that they don’t take time to handle many of the important financial aspects of a practice. Many people call this revenue cycle management, but I loved how this whitepaper called it Revenue Cycle Mastery.

The reality is that there’s so much more to revenue cycle than most people realize. Most people think revenue cycle is just about focusing on collecting payments quicker and getting more patients to pay their bills. While those are both important aspects of your revenue cycle, there’s much more to revenue cycle mastery. The above whitepaper breaks up revenue cycle mastery into these areas:

Chapter 1 Financial Clearance
Chapter 2 Check-in and Check-out
Chapter 3 Charge Capture
Chapter 4 Coding
Chapter 5 Charge Entry
Chapter 6 Claims Management
Chapter 7 Patient Statements
Chapter 8 Payment and Denial Posting
Chapter 9 Insurance Follow-up
Chapter 10 Denial Management
Chapter 11 Patient Collections
Chapter 12 Payor Management

I’m sure that every healthcare organization can look through this list and see ways that they can improve their organizations approach to revenue. If you’re not sure what each section means, download the full whitepaper where they go into detail on each.

While I’m excited about the benefits of IT on improving healthcare, I also think there’s a tremendous opportunity to use IT to improve revenue. Every chapter listed above could benefit from a well implemented IT system. IT might not always be the right answer, but it can usually help you accomplish some part of the equation faster.

Which of the topics listed above do you think is most important for a healthcare organization to solve first?

Must-See Sessions, Exhibitors at HFMA #ANI2013

Posted on June 13, 2013 I Written By

As Social Marketing Director at Billian, Jennifer Dennard is responsible for the continuing development and implementation of the company's social media strategies for Billian's HealthDATA and Porter Research. She is a regular contributor to a number of healthcare blogs and currently manages social marketing channels for the Health IT Leadership Summit and Technology Association of Georgia’s Health Society. You can find her on Twitter @JennDennard.

It’s that time of year again. The Healthcare Finance Management Association’s annual ANI conference is just days away. I’ve come to associate the month of June with all things revenue cycle and the anticipation of learning more than I ever wanted to know about financial risk, reimbursement strategies, RACs, coding … the list could go on and on. I do enjoy the show, almost more than HIMSS, because it is smaller, shorter and so much more manageable from a logistics standpoint. HFMA puts out a great mobile app each year, and this year marks the first time I’ll be able to take advantage of it thanks to a (finally) upgraded phone.

Last year in Las Vegas, the show floor and educational sessions were largely focused on ICD-10 and ACOs. Flipping through this year’s brochure, I see that health insurance exchanges, Stage 2 of Meaningful Use and payer relationship strategies will also see a bit of the limelight. Personally, I’m looking forward to learning what healthcare finance folks think of this surge in healthcare consumer cries for price transparency. Are they paying attention? Will charge masters ever change (for the better)?

I thought I’d share some of the sessions I’m most looking forward to attending. I admit that I’m a big fan of panel discussions. Solo presenters can turn into sleep-inducing monologues far too quickly.

To Merge or Not to Merge: Hospital Executive Panel Discussion (Monday, 6/17)
What are the advantages and challenges of maintaining stand-alone status? What factors could influence a decision to see affiliation partners? What various affiliation strategies have worked for others?

Living in Atlanta, which has seen its fair share of hospital mergers and partnerships, I’ve often wondered why some facilities choose to go it alone and some choose to affiliate. I’m looking forward to hearing some inside scoop from the four scheduled hospital executives.

Transitioning to Value: Barriers, Solutions and Opportunities (Tuesday, 6/18)
Former CMS administrator Don Berwick will give this keynote address, which promises to “identify the barriers that must be overcome to reform the delivery system, the outcomes of successful delivery models, and the signals of progress within provider organizations.”

I can’t help but wonder how his stage presence will compare to Farzad Mostashari’s, and what sort of neck attire he’ll don.

Physician/Hospital Revenue Cycle Integration: a Panel Discussion (Tuesday, 6/18)
This session will cover the “opportunities and challenges of unifying the revenue cycle to reduce overall costs while increasing collections and patient satisfaction.”

I think it will be interesting to hear from providers just how important patient satisfaction (and presumably referrals) are to a provider’s bottom line. I expect at least one of the panelists will bring up Stage 2, as I’m learning that patient engagement and satisfaction are closely intertwined.

Women as Leaders: Charting the Course (Tuesday, 6/18)
As I mentioned in a recent post, I’m looking forward to learning how the HFMA board members (dare I call them #RevCycleChicks?) on this panel manage careers, families and communities.

Quiet: Harnessing the Strengths of Introverts to Change How We Work, Lead and Innovate (Wednesday, 6/19)
This keynote from author Susan Cain seems tailor-made just for me. Until social media came into my life, I’d always considered myself an introvert. But social networks have turned that idea on its head in unexpected ways, and so I wonder if Cain will touch on digital media in her presentation.

Best Practices for Managing Consumer Payments in the Current Environment (Wednesday, 6/19)
This “late-breaking session” promises to share best practices on improving collections and patient satisfaction.

I hope they’ll touch on the “future” environment, as it seems reasonable to assume that 2014 will likely make a number of current best practices out of date.

Then, of course, there is the exhibit hall, which I always enjoy roaming around without plan or purpose. A few recent postcards have piqued my interest in several companies:

sock

I’m not even sure what the name of this company is, but the idea of a singing sock intrigues me.

emdeon

I fared poorly at Emdeon’s Cash Stacker games last year, and am determined to do better this time around. Plus, the company always seems to be doing interesting things in the revenue cycle space, so I look forward to catching up with several of their team members to get the inside scoop.

relayhealth

I’m very intrigued by the idea of provider benchmarking at the moment, so I’m planning to learn more about what RelayHealth is doing in this area.

athenahealth

While this postcard doesn’t allude to athenahealth’s recent claims of guaranteed ICD-10 compliance, it will definitely be my main talking point when I stop by their booth.

Good works are always a good idea, and several companies are making charitable contributions in lieu of giveaways:

optum

jpmorganbnymellon

What sessions and exhibitors are you looking forward to? Let me know what I shouldn’t miss via the comments below.

Top 5 Revenue Cycle Management Issues

Posted on September 27, 2012 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

Like Jennifer, I’m going to be heading to AHIMA 2012 as well. She correctly identifies that ICD-10 is a major AHIMA topic and Upcoding is the topic de jour, but another topic which I think continues to sit under the radar at AHIMA is revenue cycle management.

In many ways this makes sense when you consider that the ICD-10 has such an influence on revenue. Upcoding is all about revenue. Even healthcare documentation is dominated by a discussion of its impact on revenue (Yes, we could discuss why this should be about patient care in a future post). While many don’t want to admit it, humans need to get paid to survive and they want to get paid as much as they can get. Last that I checked doctors were human.

What then are the challenges that doctors face with revenue cycle management (or revenue integrity which many like to call it)? Here’s a great list of RCM challenges as listed by Ruth Zwieg on LinkedIn:

1. Managing the revenue cycle of a practice starts with good Practice Management (PM) software; one that has an easy to use scheduling tool for the front desk and that can determine insurance eligibility before the patient arrives so that the practice can collect the correct co-pay and/or out-of-pocket expenses up front before seen by the physician. This increases A/R and saves time instead of spending resources collecting after the fact which is time consuming and expensive.

2. The PM software must be easy to integrate with their existing or new EMR so that the physician group can show meaningful use and get that incentive money. Many practices still think they have to get new Practice Management software when they start looking at EMRs and many EMR companies try to sway them this way so they can get the sale for their PM software and their EMR.

3. ICD-10 – Need I say more – you have written about this in detail. Some Practice Management systems have a coding assistant built in but most do not. Coding correctly determines payment.

4. Staff training is very important from the beginning of the revenue cycle (scheduling, verifying insurance) to managing the patient once he/she checks in to when the physician sees them to check out and billing/collecting. Just like every other business, time has to be managed and time is money, especially a physician’s time. The more efficient the staff and their use and understanding of the software, the more patients the physician can see.

5. Many hospitals have and still are purchasing physician practices because the physician either does not know the business side of running a practice or just wants to be on salary and get rid of the headaches. Billing for physician practices is different than hospital billing. Hospitals are realizing that their hospital staff may not be doing the best job of that. In addition, the hospitals are realizing that their hospital system’s EHR does not have the desired functionality that a physician group needs or worse, they have multiple physician practices all using different EMRs that the hospital now has to manage or integrate into one.

I find this list really interesting and does speak to many of the revenue challenges healthcare faces. If we could solve these five challenges we’d have done a lot of good for doctors.

Increasing Revenue Through Clinical Connectivity

Posted on August 27, 2012 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

As most of you know, I’ve been working hard to create more content related to revenue in healthcare. My interest in this has grown even more since I had the chance to attend the ANI 2012 conference in Las Vegas where I got the chance to talk to people like Rishi Saurabh from GE Healthcare. It’s amazing how many people (myself included) don’t think that revenue cycle management is sexy since there are so many opportunities in healthcare.

One example of missed healthcare revenue management opportunities has to do with connecting clinical content with the financial data. From my experience, it’s quite rare to see a healthcare institution that does a great job of connecting these two pieces of data. The clinical data is in a silo of its own and it’s only looked at by the clinical people. The financial data is in its own financial data silo and only ever looked at by the financial people.

These silos are a problem and present a really big opportunity for healthcare organizations to increase the revenue of their organization. Although, doing so in an organization is not always easy. It takes great leadership to bridge the two content silos. Plus, you need someone who’s effective at understanding both the clinical and financial point of view. So, it’s not hard to understand why this doesn’t happen more often.

I think the most basic example of what I’m talking about can be seen in the annual checkup. I was talking with a colleague the other day when I told him that I couldn’t remember the last time that I’d been to my doctor. In fact, I honestly don’t even know my doctor’s name (which might beg the question of whether he’s really MY doctor). Why hasn’t my doctor sent me a reminder about the need to do an annual physical exam? Why don’t I have a regular connection with my doctor that helps me to take better care of my health?

I think at least part of the answer to this is that the clinical is not tied to the financial. If the clinical were tied to the financial, then the doctor could provide a care plan for me and my specific health needs. Then, the financial could ensure that I’m following that care plan. Imagine the revenue implications of me visiting the doctor regularly as part of a well defined care plan.

I’m sure that many of you out there are likely skeptical about whether patient reminders will actually change behavior. Certainly in many cases, these reminders will be discarded or ignored. However, a certain percentage of those reminders will be followed. This will mean your patients get better care and your clinic increases their revenue. Plus, maybe we need to take a deeper look at the care plans that we offer patients. If large percentages are ignoring the suggestions, then maybe we need to rethink the plan or how we’re communicating that plan to the patient.

There are certainly plenty of other medical examples where a follow up doctor visit would make sense and improve the health of your patients. In fact, you could get really sophisticated with how you reach out to your patient population.

I believe the key to success of this type of program is to integrate the clinical data with the financial data. It creates tremendous power and amazing opportunities.

Revenue Cycle Management Interview with Rishi Saurabh – GE Healthcare

Posted on July 25, 2012 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

As most of you know, I had the chance to attend the ANI 2012 conference in Las Vegas that’s put on by HFMA. This conference is a hospital CFO’s home since all of the major players in the healthcare financial management space were in attendance. Around every corner was another Hospital CFO it seemed.

While at the conference, I was able to corner the Global Product Marketing Manager at GE Healthcare, Rishi Saurabh, for a short video interview about revenue cycle management. In the video Rishi provides his insights into the biggest challenges facing hospitals today and also provides some insight into how GE plans to approach these challenges. I hope you enjoy the video:

HFMA ANI Las Vegas: That’s a Wrap

Posted on June 28, 2012 I Written By

As Social Marketing Director at Billian, Jennifer Dennard is responsible for the continuing development and implementation of the company's social media strategies for Billian's HealthDATA and Porter Research. She is a regular contributor to a number of healthcare blogs and currently manages social marketing channels for the Health IT Leadership Summit and Technology Association of Georgia’s Health Society. You can find her on Twitter @JennDennard.

Though it was only my second time attending the annual HFMA ANI show, I think it’s fast proving to be my favorite when compared to HIMSS – at least when both are held in Las Vegas. The shorter exhibit hall hours; a smaller, more manageable venue; and a general feeling of being less rushed to accomplish every task I set myself was a welcome contrast to the breakneck speed at which we all seem to attend HIMSS.

Though the ANI show had a more laid back vibe, it was by no means any less meaningful to its attendees and exhibitors. Some of the exhibitors I spoke to noted that while booth traffic wasn’t as brisk as they’d have liked, they were having deeper, more meaningful conversations with the folks that did stop by. Others told me that it didn’t seem like many members of the hospital C-suite were in attendance, and decided to send their seconds-in-command instead. (Perhaps they were too busy back home attending to projects related to any of the following healthcare IT acronyms – EMR, HIE, ACO, CPOE, ICD-10, SCOTUS.)

I didn’t get a chance to attend any educational sessions, but from the tweets that I saw, most folks really enjoyed keynotes from Olympian Carl Lewis and renowned pilot Sully Sullenberger. Speaking of tweets, the volume of chatter on Twitter was pretty dismal. There were a few devoted tweets around the #ANI2012 hashtag of course, but for the most part, Twitter (and social media in general) was non-existent.

I walked the show floor Tuesday to see if I could spot any technologies tied into EMRs, and didn’t find much to choose from – at least not as many as I came across last year. I did have some interesting conversations with the folks at Nuance about new solutions being sold under the Dragon Medical umbrella.

Population health management was a phrase I heard (or saw) a number of times, as was predictive analytics and the ubiquitous “Big Data” – all three of which tie together in the world of hospital CFOs. In my mind, it seems that it will be necessary from a financial standpoint for hospitals to get a firm grasp of what “Big Data” means to their organization, and then how to use predictive analytics to derive meaning from that data in their population health management programs, especially if they plan on successfully participating in any sort of coordinated or accountable care program. MedAssets is doing some interesting work around this concept that I hope to learn more about once I get back home and settled.

I’d be interested to hear your thoughts about the show, especially if you were an attendee. How did it compare to last year? Did you think, like me, that many folks were seduced by the lure of the pools at Mandalay Bay to the detriment of folks working the exhibit booths? Gather your thoughts while you peruse a few pictures I took on the show floor:

I stopped by the MedAssets booth to talk population health management with Carol Romashko, Director of Marketing.

AfterHours UR intrigued me with its pleasant logo and hospital utilization review service founded by nurses.

The folks at Executive Health Resources had a catchy come-by gimmick with a caricaturist creating portraits on etch-a-sketches.

 

EnableComp definitely had kid-friendly schwag. I'm still kicking myself for not going by there during the last hour of the show.

Emdeon's Cash Stacker games seemed to be a big hit on the show floor.

HumanArc knows that creativity really does pay off, at least when it comes to attracting passers by with Lego-inspired logos.

It was interesting to me, being an Atlanta native, to note how many Georgia-based revenue cycle management clients MediRevv has.

My favorite part of the Nuance booth was the tag line "Use it for Good."

Objective Health, formerly known as McKinsey Hospital Institute, had a very inviting booth. It was nice chatting with their CEO, Dr. Russ Richmond.

I didn't see any "whack a mole" type attractions, but this game from PNC definitely grabbed attendees' attention.

I didn't get a chance to stop by the Premier booth, unfortunately, but it was certainly eye-catching.I heard several interesting customer success stories from the Protiviti team, which I hope to cover in greater detail in the near future.

The VisiQuate booth impressed me with its high-tech feel.

It certainly wasn't all work and no play. I enjoyed Dell's evening event at the Shark Reef Aquarium with Stephen Outten, Content Marketing and Social Media Strategist at Dell, and Amanda Woodhead, Manager of Corporate Communications at Emdeon.

Is Revenue Cycle Management Getting Transgressed with Meaningful Use Stealing the Focus?

Posted on June 7, 2012 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

This is the next in a series of posts I’ve been doing focused on Revenue Cycle Management (RCM). It’s been a fun series to do as I’ve explored more of the details of RCM and learned a lot along the way. Although, as is usually the case, the more that I learn the more I realize I still need to learn. I will be attending ANI in Las Vegas later this month, so I’m sure I’ll have plenty more RCM related topics to write about after that event.

This post was inspired by a comment Madelyn made on my Is Revenue Cycle Management Sexy? post:

You’re making a really important point with this story and it’s a topic we’ve discussed at length in my company. The availability of incentive funds is causing so much thought and energy to be focused on EHRs, but if a practice or hospital’s RCM is a mess, they’re losing far more money than the Meaningful Use dollars could ever reimburse them for.

What an extremely important question! I’m afraid far too many clinics are falling into this trap.

Each day I’m amazed a little bit more on the far reaching impacts of meaningful use on healthcare and EHR. There’s been amazing array of unintended consequences that are associated with meaningful use and the EHR incentive money and most of them aren’t good consequences. Sure, there are also some really great benefits to the government EHR stimulus money, but my fear is that they benefits won’t outweigh the negative consequences and the taxpayers will be out a cool $36+ billion.

Why do so many practices and physicians become so irrational when they hear about “free” government money for EHR? This I don’t have an answer to, but I hope by pointing it out more doctors will take a step back and do what’s right for their clinic. I’d expect in most cases this will involve EHR and technology, but Madelyn makes a really important point:

If your RCM is a mess, you could lose far more money than you gain from meaningful use.

Increase in Patient Self Pay Increases Collection Risks

Posted on May 4, 2012 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

There is a major trend that is happening in healthcare that is going to impact the economics of healthcare in a major way. This trend is the increase in Patient Self pay. There are a number of factors which are causing more patients to pay for their medical expense including lost jobs and employers dropping health insurance coverage. I’ve heard a number of people predicting the move to a patient focused payment model with high-deductible insurance plans. In fact, this New York Times article says “The share of employees enrolled in high-deductible plans surged to 13 percent in 2011 from 3 percent in 2006, according to Mercer Consulting.”

Personally I think this is a great thing for healthcare since I’ve long been a proponent that any healthcare reform needs to put the consumer (patient if you prefer), not the insurer or the government at the center of the healthcare financial system. However, this change also poses a risk for practices and hospitals since the risk inherent in collecting self-pay balances rises in parallel with this increase in patient self pay.

How then are EHR vendors and revenue cycle management companies dealing with this shift to patient self pay?

This certainly won’t be a comprehensive list of ways that revenue cycle management can help with patient collections, but it will show a few ways technology can help now and in the future.

EHR software can integrate a Patient Pay Estimator to provide patients a close approximation of their final bill which helps a practice collect payment before they leave. The software physicians use to estimate the patient total for an office visit are going to have to get better and more accurate. I don’t have the numbers in front of me now, but I’ve seen multiple studies that illustrate well how the key to good patient collections is to get the money while they’re present. Once the patient leaves your office your ability to collect from that patient drops dramatically.

I know I’ve been to a lot of doctors where I get to the front desk and they don’t know what to charge me. Far too often they just say, don’t worry about it, we’ll send you a bill in the mail. If they just had the right information available to them, they could collect the money on the spot and not have to worry about collecting it from me later. An EHR can really facilitate this process if it has a good patient liability estimator built into the EHR.

In the cash or check world, it was much harder to set up budget plans or recurring payment. Now there are more and more systems out there where you can store a person’s payment information and set up the recurring payment to happen automatically. This will likely be a key trend going forward.

I’ve even seen some of the larger EHR vendors who have programs that offer financial assistance. In fact, the really large EHR vendors have whole financing divisions that can assist patients who have financial issues related to their healthcare. I wonder how deeply these financing options can be integrated into EHR software, but I could see it as a big advantage to have it as an integrated part of the payment workflow. I’m always amazed at how quickly you can be approved for a credit card or financing a car. I expect this type of financing will be pushed down throughout the various layers of healthcare. Will it become a differentiating factor in a large EHR vendor versus a small EHR vendor?

Another interesting idea to stem the patient payment problem is to accept prepayments. Meaningful Use is bringing the patient portal and PHR software back to the forefront of many EHR implementations. If you have patients filling out the paperwork for their office visit, why not collect the co-pay at the same time? Pre-payment could become a really great way to avoid revenue cycle management issues on the back end.

I’d love to hear other people’s thoughts related to patient payment and revenue cycle management trends. What can be done to help avoid the patient self pay collections issues?

Revenue Cycle Management is So Popular Because Most Physicians Aren’t Business People

Posted on April 10, 2012 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

In a previous post, I asked the really important question: Is Revenue Cycle Management Sexy? I was amazed and impressed by the discussion that spurred out of that post. People were talking revenue cycle management details in the comments, on Twitter and even on their own blogs about how revenue cycle management is indeed sexy.

Turns out that a number of doctors wouldn’t be practicing medicine today if it weren’t for revenue cycle management companies that support these doctors. Keeping doctors in business is sexy to me. I know that the media often spins revenue cycle management as the rich (doctors) getting richer. They also love to talk about revenue cycle management companies taking such a huge chunk of a physician’s reimbursement. Let’s look at these two factors.

Are Doctors Rich?
First, it’s a little bit of a misnomer that doctors are all rich. Doctors don’t do anything to help this image since so many of them drive around in their high priced Mercedes and BMWs. There are many doctors (specialists top this list) that do make a very large amount of money. Many primary care doctors and certain specialties make much less. Don’t get me wrong. Every doctor I know is making plenty of money to live and live well. In fact, they’re making more than the average American. Although, when you look at their overhead, medical school expenses, etc you wouldn’t classify most doctors as rich.

Plus, let’s be honest for a minute. Many doctors are great at caring for patients and terrible at running their practice. Most physicians aren’t business people. There’s nothing wrong with this. In fact, some of the very best doctors are terrible business people. In these cases, many doctors turn to revenue cycle management to help them improve the business side of things. In some examples, no revenue cycle management assistance for a practice means the practice goes out of business. Hard to classify a practice that can’t collect money and goes out of business as someone that’s rich.

Revenue Cycle Management Company Fees
I’m sure if we looked across the spectrum of revenue cycle management companies, we could likely find some bad actors that are really gouging doctors more than they should because the doctor is in a vulnerable position. However, I think this is more the exception than the rule from what I’ve seen. In most cases where I see revenue cycle management in play, it’s because the practice for one reason or another couldn’t keep up with the demands required to do good revenue processing or didn’t have the expertise to do it well.

The problem is those doctors who are great business men don’t understand why their colleagues would allow a company to take a percentage of their reimbursement. What these great businessmen/doctors seem to miss is the choice that most doctors are really making when they choose to get assistance with their revenue cycle from another company.

The real choice for many doctors is whether they’re ok paying 7% of their reimbursement in return for a huge increase in how much reimbursement they actually receive. It’s just basic math really. If I can increase a doctors reimbursement more than the percentage I take, then it’s a good choice for many (definitely not all) doctors.

Could the doctor just increase the reimbursement themselves without having to pay a fee to someone else? Sure they could. In fact, many try this approach over an extended period. Then, many realize that they’re not very good at that part of the business. They realize that an outside revenue cycle management company can help them find missed claims that will now get paid. They realize that revenue cycle management companies can help those providers get paid faster.

Revenue Cycle Management and EHR
Some of the most popular EHR companies are built around this fact and offer the EHR for free or nearly free as a compliment to the core revenue cycle management. Plus, more and more EHR companies are building in some sort of revenue cycle management component. In many cases this is a good way for an EHR company to generate revenue, but for many practices it’s also a great service for them.

Of course, I’ve also heard from the many EHR vendors who don’t provide these revenue cycle management services to their providers. They usually give me an exasperated “How can doctors pay of their reimbursement to these companies?” A part of me understands this exasperation completely since I’m an entrepreneur like these EHR executives. If I were in a physician’s shoes I’d figure out the business process myself instead of giving a big chunk of my reimbursement to another company. This just ignores that many doctors can’t (or in many cases don’t want to) figure out the business process. In these cases, a percentage of their reimbursement is a better business decision.

Conclusion
The biggest challenge to revenue cycle management is doctors don’t want to admit that they need a revenue cycle management company. By doing so, they’d be admitting their not business people and that’s a really hard thing to do. Although, in many cases it is the best business decision.

Next up in my series on revenue cycle management I’ll talk more about the relationship of EHR and RCM.