The revenue cycle begins at initial contact with the patient and closes once the line item on the balance sheet shows charges paid in full and a zero balance to close that particular cycle. In many scenarios, patients can have one or multiple cycles going at any given time. Multiple cycles going at one time are very common, especially at the primary care level, and certain specialty practices as well. There are times when, for example, a surgeon might see a patient for one reason, correct the patient’s complaint, and finish by seeing them for follow up. The doctor may never see that patient again. The cycle opened services performed, payment collected and is closed with a relatively short life.
To maximize profitability means taking a look administratively between the initial patient contact and the $0 balance of paid in full. Every medical practice and every patient encounter is unique. To consider Revenue Cycle Management is to look at services rendered and service billable.
Keeping in mind the integrity of the provider and patient care, medical practices have a difficult balance to keep the practice in business. Like all business, there is a cost associated with being in business.
Examples such as:
- Labor of medical staff; salaries, insurance benefits, vacation time, sick leave and the like.
- Rent for the office space, utilities
- Taxes
- Supplies; paper, folders, pens
- Storage of past medical charts in a traditional paper environment
In order to stay in business, these obligations must be met. To maximize profitability is to watch closely the expenses versus the income. To keep profitability high and a patient load which is manageable and maximizing each encounter is the challenge. Cutting expenses or not accepting new expenses is a good first step. Efficiencies gained with an Electronic Health Record (EHR) can help in many ways.
Examples include:
- An EMR that has a fully functioning Evaluation and Management (E & M level), calculator
- Time saved by quick easy E-access to any patient chart when needed, even if the provider is not in the office
- Reduction of staff redundancies
- Stimulus dollars available by the US Government for EMR adoption through American Reinvestment and Recovery Act of 2009 (ARRA)
- Financial incentives for eRx
Medical practices are looking to new ways or alternate ways of expense reduction and profit maximization. Labor expenses are most likely number cost of running a medical practice. Outsourcing to a medical billing service is a consideration. Billing services have a high degree of experience, with seasoned medical billing specialists. These specialists collaborate to make certain all billable charges are included. There are a lot of changes in healthcare and healthcare reimbursement. It is very difficult for a billing manager to stay on top of their profession by knowing the billing practices of one medical practice. A thorough review or audit of the medical billing practice is current and accurate. There have been times when a biller can fall victim of autopilot billing and miss some opportunities.
Accurate office services data should help to determine:
- Which billing codes are being maximized
- Which of the services being performed in the office are even profitable
- Should there be a shift in the types of service being performed
- Is it a good idea to hire an additional provider such as a Physician Assistant or Nurse Practitioner
Related: Selecting the right RCM company for you medical practice
The medical practice can be made more efficient and more profitable with the addition of an EMR to track and bring closure to RCM.
For more tips on medical billing for your practice, sign up for our EHR newsletter and stay updated.
