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Revenue Cycle Management: Enhance Cash Flow with Improved Efficiency Print E-mail
Written by Todd D. Demel, MBA   
Wednesday, 24 August 2011 17:45


While healthcare providers typically rely on conventional revenue cycle management methods to ensure financial performance, most are not collecting all of the potential revenue they have earned. Whether due to pricing, charges, or coding, considerable amounts of reimbursement are being lost daily. Today, providers must do more with fewer resources. Therefore, it is critical that practices effectively identify and address the root causes of lost revenue.   


All of this comes down to establishing a better way of managing the business of providing healthcare. And accomplishing this requires the proper processes, tools, and related expertise. While there has been an increased emphasis placed on technology and automating part of the revenue cycle management process, improved financial performance must also incorporate proper compliance measures and appropriate documentation.

Technology can certainly improve efficiencies and reduce some administrative burdens, but the reimbursement ultimately received by the practice correlates with and is a reflection of the data that was initially entered into the system. Just as important, if a practice is cited for noncompliance due to inappropriate or inaccurate documentation, cash flow could be reduced to the point of devastating a practice due to a review or audit that entails a hold being placed on payments. 


Rather than backend processes, the source of inadequacies is typically people and technology on the front-end. Accounts receivable decreases in value as it ages. Therefore, in cases where a claim is not paid the first time it is submitted, the chances of the practice ever receiving payment drops significantly. This is why it is so important to catch potential denials before claims are submitted.  

is also a key factor and therefore staff should be aware of:
  • Whether the claim has been transmitted;
  • Where the claim is in the process;
  • Whether the claim is complete;
  • Whether there are any factors that may delay transmission of the claim;
And, when the practice can expect payment to be made.


While less emphasis has been placed historically on patient receivables (as opposed to insurance receivables), annual increases in health insurance premiums have caused consumers to search for plans that require higher out-of-pocket responsibility in order to offset costs. Since this trend is likely to continue, equal attention must be given to this area of the revenue cycle as well. 


The goals for the practice administrator should include:
  • Increasing the first pass resolution rate;
  • Speeding-up the collections process;
  • Reducing workload and increasing efficiencies of staff;
Other factors to consider include the chargemaster or fee schedule, and payer contract management. Establishing a team environment at the practice where everyone is clear on their functions and responsibilities will go a long way towards creating efficiencies. Work distribution should be well thought out, and staff should be educated on best practices for pricing, charging, and coding. There must also be an awareness of compliance risks, accountability, and the possible consequences of noncompliance. 
ABOUT THE AUTHOR:  Mr. Demel is Senior Executive of Physician Management Services at MF Healthcare Solutions.  Possessing both operational and financial backgrounds, the MF Healthcare Solutions management team has vast experience in a range of healthcare industry settings. Combined expertise enables the firm to offer specialized physician practice managementservices. For more information, please visit: or contact Todd Demel at (954) 475-3199.
Last Updated on Wednesday, 31 August 2011 17:26

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