Before COVID-19 struck, many healthcare providers were already nearing a breaking point from the stress of their jobs. Faced with a number of demands – evolving laws, regulations and standards; healthcare reform and changing payment policies; too many administrative tasks; balancing increased patient expectations as healthcare consumers with limited time for patient interactions – providers and their staff were already suffering burnout at record levels.

These pressures became even greater during the pandemic. Providers risked exposure to the virus by keeping their office doors open but saw their patient volume and revenue swiftly drop. As a result, some providers took pay cuts, practices furloughed employees, and many rushed to adopt or expand telehealth offerings in order to continue providing services. Since the beginning of COVID-19, the Medical Group Management Association found that, on average, practices saw at least a 55% decrease in revenue and 60% decrease in patient volume. Combined with an increase in expenses, 97% practices experienced a negative financial impact as a result of the pandemic.

In an effort to ease some of the financial stressors, the federal government stepped up to provide some stop-gap funding. These included the provider relief fund that provided grants to healthcare providers to cover lost revenue and unreimbursed pandemic-related costs, the Paycheck Protection Program and other loans under the CARES Act, Medicare Accelerated and Advance Payment Programs to mitigate cash flow disruptions, and additional funds made available for certain providers under the American Rescue Plan.

Optimizing the revenue cycle

Despite this help, the economic impact of COVID-19 still weighs heavily on healthcare providers and practice staff. To ensure a healthy future and help ease the burnout providers and staff contend with, practices must take a hard look at their internal operations and make changes that put them on solid financial footing. A key to this is optimizing the revenue cycle.

Billions of dollars are wasted on inefficient revenue cycle management (RCM) every year. The 2020 CAQH Index revealed that in the United States, with better practices across the entire revenue cycle, healthcare providers could have saved $16.3 billion in 2020 – money that could have prevented furloughs, pay cuts or practice closures.

So, how can your practice ensure it is maximizing its revenue? First, it’s important to understand where you stand in terms of fundamental revenue cycle key performance indicators (KPIs) are, which could include days in accounts receivable (A/R), clean claim rates, collections per visit, and other metrics. Then analysis should be performed to see how these KPIs are trending, and what changes should be made to improve performance.

You should evaluate all the processes that touch the revenue cycle – from the front office to the appointment itself, to back-office billing and collections.

When looking at front office procedures, staff should collect up-to-date patient data when appointments are scheduled, enabling them to check for eligibility and benefits before the patient arrives. It’s also important to stay abreast of the different, and often changing, rules and requirements for each payer, so the information the front office gathers is helpful in building clean claims. If patients are able to schedule appointments from an online portal, they should be required to provide current demographics and insurance information at that time.

The front desk also should make clear all financial policies, collecting co-pays and outstanding balances before the appointment. For those patients who may have larger balances or who may have lost their jobs or have financial hardships, having an option for payment plans can help increase income and reduce write-offs over time.

Once patients are at their appointment, clinicians should document all interactions and capture details about the care provided. As new services – such as telehealth and remote patient monitoring -- are added, clinicians need to understand the coding for these, so they don’t cheat themselves from being reimbursed for all services provided. Clinical documentation, combined with data capture at the time of appointment booking, will result in cleaner claims and reduce the likelihood of rejections or denials -- two important factors in the practice being paid in a timelier manner.

In the back office, it is important that payments are reconciled on a daily basis. This fundamental practice gives the office staff an opportunity to catch and correct any billing or coding errors before they become a bigger problem, such as delaying or denying reimbursement. And, daily payment posting streamlines billing procedures, which ultimately improves practice cash flow.

Optimizing the revenue cycle can help reduce much of the stress that contributes to burnout in today’s dynamic healthcare environment. Working with an RCM vendor can have great benefits too, partnering to improve financial performance or patient reviews around billing processes, where there is a lack of staffing resources or training, or by serving as an extension of a practice’s existing staff. All in all, by having effective RCM processes in place, providers can worry less about the financial health of their practices and focus more on caring for and interacting with patients.