Revenue Cycle Improvement: How MSOs Are Finding Cash and Cutting Their Cost to Collect

You know the revenue cycle management systems at your locations are operating well when:

• cash flow is consistently positive
• days in A/R remain under 90 
• staff reviews contracts and negotiates more favorable changes 60 days before renewal dates
• bad debt write-offs remain under 5 percent
• denied claims amount to less than the national average of 12 percent
• prior authorizations are not backlogged 
• denial appeals are not backlogged
• all contracts are located, centralized, analyzed, and compared against each other

When the location struggles with two or more of these revenue points, however, it's a prime candidate for revenue cycle improvement.

Today's healthcare organizations face numerous challenges, including slim profit margins, staffing shortages, and rising costs. Provider revenue has increased since the pandemic but it hasn’t yet regained pre-pandemic levels. Despite these obstacles, the demand for healthcare services continues to grow. To meet this demand while remaining financially viable, healthcare organizations look to reduce costs and improve margins. Review how the most assertive revenue cycle leaders find cost-cutting and revenue-improving opportunities at all points in their revenue cycle. 

What is revenue cycle improvement? 

Revenue cycle improvement is the process of enhancing financial operations from the patient’s initial registration to the final payment. Particularly given the revenue cycle staffing shortage, many points in the revenue cycle are subject to revenue leakage. Revenue cycle professionals constantly strive to improve eligibility verification accuracy, reduce claim denials, optimize billing and coding accuracy, reduce time in accounts receivable, and accelerate cash flow to improve overall financial performance. Additionally, revenue cycle improvement includes proactive management of payer contracts and reimbursement rates so that providers can receive fair compensation for their services. Overall, revenue cycle improvement builds a more efficient and financially stable healthcare organization.

Revenue cycle improvement at patient access 

Scheduling accuracy to optimize patient volume

Managing schedules manually gets chaotic, especially when multiple locations are involved. Today, most physician groups and practices use automation to facilitate scheduling. 

An automated scheduling solution centralizes scheduling, integrating frontline schedulers and staff requests. Automation plays a vital role in clearly communicating personnel assignments, accommodating last-minute changes, and optimizing staffing by quickly generating and evaluating different scenarios. Implementing automated scheduling in healthcare enhances facility efficiency, ensures compliance with local and federal labor laws, balances workloads for medical professionals, and helps maintain high-quality patient care.

Still, staff can take some important steps to improve revenue through scheduling without relying on technology. These strategic manual processes can maximize patient throughput and optimize resource utilization. 

• Prioritize high-revenue services: Schedule high-revenue procedures and services during peak hours when staffing levels are optimal. Prioritize the most profitable services. 
• Use block scheduling: Group similar appointments together to minimize transition times between different types of services. This step reduces downtime and increases the number of patients seen​.
• Confirm appointments: Use text and phone calls to remind patients of upcoming appointments and reduce no-show rates. 
• Educate Patients on Cancellations: Inform patients about the importance of notifying the clinic in advance if they need to cancel or reschedule, allowing staff to fill vacant slots with other patients​. Share your cancellation policy. Consider taking an upfront deposit. Paying a portion of a bill upfront establishes a financial commitment on the patient’s part, reducing the risk of no-shows. 
• Maintain a waitlist: Keep a manual waitlist of patients who are willing to be scheduled at short notice. This allows staff to fill last-minute cancellations. .
• Streamline your check-in and check-out processes: Staff should manually prepare patient charts and documentation before appointments to streamline the check-in process and reduce wait times. Reduce patient bottlenecks at check-out by organizing billing and follow-up appointment scheduling.

By focusing on these manual scheduling strategies, staff can effectively manage patient appointments, reduce inefficiencies, and improve revenue without relying on technology.

Registration accuracy limits denials

Another critical juncture at the front end of the revenue cycle is patient registration. Patient information inaccuracy makes the top 10 and even the top five reasons for payer denials. The more accurate and complete information obtained at registration, the better chances a clean bill is submitted on the back end. 

Healthcare organization staff can improve patient data collection efficiency and accuracy using several manual tactics. 

• Patient data collection checklists: Standardized procedures and checklists for patient registration and data entry ensure consistency and reduce errors. Asking specific questions like, “Are you still living on Mulberry Lane” or “Is Humana your current insurer” as opposed to the more ambiguous “Are you still at the same address” or “Do you have the same insurance” catches patient address changes from those who have moved since their last visit and forgotten they never updated you.

• Staff training: Regular training sessions increase awareness of common data entry mistakes. Additionally, periodic audits of patient records and scheduling logs can help identify patterns of errors and areas for improvement. You can read more about patient access revenue cycle optimization best practices here. 

When leaning more on staff just won’t work for your organization (given the staffing shortage and expertise deficits), technology can assist. 

You can support registration staff by using an EMR and/or RCM solution with features that oversee staff data entry and even reduce data entry errors. Their fields are limited by predefined character limits and character types that flag errors before they progress to the next step. 

Use patient access data analytics to improve revenue

All the staff training, recruitment efforts, and spreadsheets in the world can’t compare to the improvement opportunities data analytics uncovers. Manual processes are quickly becoming arcane as advanced technologies automate tedious tasks and collect results, all without tiring.

Data analytics provides crystal clear visibility into what’s going on at your physician group or practice location. As renowned 20th-century American statistician Edwards Deming warned us, “In God we trust. All others must bring data.” 

Data and the insights it provides play a crucial role in enhancing a healthcare organization's patient access operations. Here's how:

• Optimizing scheduling: Data analytics can identify patterns and trends in patient appointments, allowing healthcare organizations to optimize scheduling processes. This helps reduce wait times and increase appointment availability, improving patient satisfaction and access to care​.
• Improving resource allocation: Insights from data can help organizations understand peak times for patient visits and allocate resources more effectively. By aligning staff schedules and facility resources with patient demand, organizations can enhance efficiency and ensure that patients receive timely care. These moves improve labor costs and patient satisfaction.
• Enhancing patient engagement: Data-driven insights enable healthcare providers to tailor communication and engagement strategies. By understanding patient preferences and behaviors, organizations can offer appropriate, even helpful payment plans, improve patient engagement, and encourage adherence to treatment plans​. 
• Streamlining administrative processes: Data analytics can identify bottlenecks and inefficiencies in administrative processes, such as patient registration and insurance verification. By streamlining these operations, healthcare organizations can reduce errors, speed up patient intake, and improve overall access to services​.
• Predicting and managing demand: Predictive analytics can forecast patient demand for services, allowing organizations to proactively manage capacity and resource planning. This ensures that patients have access to the care they need when they need it, without unnecessary delays​. Explore the five fascinating types of healthcare payer analytics here. When MSOs have the data to back up the systems or changes they want to make at a physician group or practice, stakeholders cannot argue. 

Overall, data and insights are instrumental in making informed decisions that enhance patient access operations, leading to better patient experiences and outcomes​.

Patient access data to collect includes: 

Here is a list of patient access data that healthcare organizations should collect:

• patient demographics
• insurance information
• appointment scheduling and no-show rates
• patient wait times
• eligibility and benefits verification data
• pre-authorization and referral data
• patient communication preferences
• patient registration accuracy
• patient satisfaction scores
• financial clearance rates
• check-in and check-out times
• service utilization rates
• cancellation and rescheduling 
• patient access to portal usage
• registration and insurance verification errors
• patient payment collection at registration
• referral conversion rates
• time to first available appointment

Collecting this data helps healthcare organizations enhance patient access operations, improve patient experience, and streamline administrative processes​

Upfront collections’ contribution to cash flow and margin improvement

Did you know that, due to the increase in high deductible healthcare plans and the number of self-pay patients, patient payments now make up more than 30 percent of provider income? If not, rest assured, many physician groups and practices aren’t even aware of which payers (patient, government, or private) account for what portion of their revenue. A 2023 survey of healthcare CFOs reveals that 22 percent don’t use any financial benchmarking, and 40 percent feel their current benchmarking solution is inadequate. If your revenue seems reduced, take a look at patient payment collection rates at your locations. You may be surprised. 

A good solution for improving revenue at patient access exists, and too few healthcare organizations are taking advantage of it. 

Collecting patient payments upfront has enormous potential to improve provider revenue. Until the last five years or so, providers, their staff, and patients were accustomed to collecting 90 percent or more of revenue from insurers. That 10 percent just didn’t have enough of a business impact to send providers chasing after it. Thirty percent of the patient bill is another story. 

There’s evidence that more hospitals and surgery centers are beginning to collect patient payments in full upfront. According to a 2023 Kodiak survey reported in The Wall Street Journal, “advance billing is becoming a more common practice among facilities because it avoids costly follow-ups, debt collections, and lawsuits over unpaid funds.” 

Upfront collections rely on a combination of technology and patient engagement strategies. For example, automated price estimators can provide accurate pre-service payment information – essential for setting clear expectations with patients. Training staff in effective communication techniques for collecting co-payments and other charges at the point of service also improves revenue. The goal is to maximize collections at or before the time of service, as the chances of collecting payments decrease once the patient leaves the facility.

Patient payments depend on good faith and patient payment estimates. Take a quick tour of how you can automate eligibility verification and estimate generation here:

Physicians and their staff can struggle when asked to collect payments upfront. They’re in a profession where the patient/doctor relationship can impact health outcomes. Review the tips in Upfront Collections: How to Get Physicians and Staff On Board with Collecting Pre-Service to normalize the upfront collection process.  

Mid-cycle revenue improvement

Revenue cycle leaders can improve coding accuracy and charge capture using current staff and manual methods. Here are some effective tactics:

• Staff training and education: It takes continuous training to keep coding staff updated on changes to ICD and CPT codes and their modifiers. They must also remain current on coding guidelines, regulations, and best practices. When you create paths for your valued coders to become Certified Professional Coders (CPC) or Certified Coding Specialists (CCS), you increase their loyalty and their coding accuracy. 
• Standardization of processes and workflows: Establish clear and standardized operating procedures for coding and charge capture to ensure consistency across the organization. SOPs help reduce errors and provide a helpful reference for staff​. Also, consider creating checklists coders can use to get all necessary documentation. This documentation alleviates their mental load and gives them more confidence. Most of all it reduces the chances of omissions and the subsequent denials. 
• Conduct internal audits: Perform regular audits of coding and charge capture processes to identify discrepancies and areas for improvement. Audits can help uncover patterns of errors and provide opportunities for correction. 
• Peer reviews: Peer review programs where coders review each other’s work to catch mistakes. They also help coders share feedback, fostering a collaborative environment focused on accuracy​.
• Foster collaboration with clinicians: Because they execute the initial charges, clinician buy-in to your charge capture process is critical.  Encourage open communication between coders and clinical staff to ensure accurate documentation of patient encounters. This collaboration helps clarify any ambiguities and ensures that coding reflects all services provided​. 
• Feedback loops: Establish feedback mechanisms where coders can discuss charge discrepancies or unclear documentation with clinical teams to improve accuracy and understanding​.
• Manual audits of high-risk areas: Focus on auditing high-risk areas or services known for frequent errors to ensure accuracy and compliance​.
• Implement charge reconciliation: Ensure that all charges are accurately captured by manually reconciling clinical documentation with billing records. This process helps identify missing charges and ensures that all services rendered are billed appropriately​​.

By emphasizing these manual and staff-focused methods, revenue cycle leaders can enhance coding accuracy and charge capture, leading to improved financial performance and reduced claim denials​

Data analytics in the mid-cycle revenue 

Data analytics enhance a healthcare organization's mid-cycle tasks such as coding and charge capture, two common spots of significant revenue leakage. It delivers the insights so you can create strategies to improve coding accuracy, enhance charge capture, streamline workflows, and limit denials. 

• Error analysis: By analyzing historical coding data, organizations can identify patterns and common errors that lead to claim denials or underpayments. This allows coders to focus on specific areas that need improvement, enhancing overall coding accuracy​. 
• Staff coding assistance: Leveraging data-driven tools like AI and natural language processing, autonomous coding suggests accurate codes based on clinical documentation. This reduces the likelihood of human error, improving accuracy and ensuring compliance with coding standards​. 
• Charge capture:  By analyzing data from electronic health records (EHRs) and other systems, healthcare organizations can identify missed charges and ensure that all services provided are billed appropriately​. Data analytics can also reveal inefficiencies in charge capture processes, enabling organizations to streamline workflows and improve charge capture rates. This leads to more accurate billing and increased revenue​.
• Workflow efficiency: Data analytics can pinpoint workflow inefficiencies that hinder mid-cycle tasks, such as delays in coding or charge entry. Addressing these bottlenecks improves overall operational efficiency​, reducing staff cost and frustration. 

Here is a list of mid-cycle data that healthcare organizations should collect:

• coding accuracy rates
• charge capture rates
• denial rates and reasons
• accounts receivable aging
• claim rejection rates
• days in accounts receivable 
• patient encounter documentation quality
• compliance with coding standards
• coding productivity metrics
• cost-to-charge ratios

Collecting this data helps healthcare organizations improve coding accuracy, optimize charge capture, and enhance overall financial performance

Back-end revenue cycle improvement

Revenue cycle leaders can improve billing, payments, and contract management through staff training, process standardization, and regular audits. Here are some strategies to achieve these improvements using staff and manual methods:

Billing and payments tactics to boost revenue

• Comprehensive training programs: As with charge capture, ongoing training for billing staff to ensure they understand the latest billing codes, regulations, and payer requirements is essential. It takes well-trained staff to accurately process claims, reducing the likelihood of errors and rejections​. Cross-training among staff members to enhance their understanding of various roles within the billing process can improve team collaboration and provide backup support when needed​.

• Standard operating procedures (SOPs): Establish clear and consistent procedures for billing and payment processing. SOPs help ensure that all staff follow the same steps. Implement checklists for billing staff to ensure all necessary steps are completed before claims are submitted. These fail-safes apply instructions across all staff, side-stepping uneven training and favoritism. 

• Conduct internal audits: Perform regular audits of billing and payment processes to identify discrepancies and areas for improvement. Audits can help uncover patterns of errors and provide opportunities for corrective action​. 
• Review payment posting: Manually review payment posting to ensure that all payments are applied correctly and that any discrepancies are addressed promptly​. 

Improve revenue cycle with aggressive contract management

Given healthcare organizations’ razor-thin margins, the time when payers created contract fees and terms with no push-back from providers is over. You can be aggressive with your payers without risking losing their subscribers. 

Your staff can take control of your payer relationships with: 

• Manual review of contracts:  Find all contracts and keep them in a central location. Create a spreadsheet that includes renewal dates. Regularly review contracts manually to identify areas where terms are not being met or where improvements can be made​. 
• Identify key contract metrics: Manually track key contract metrics, such as reimbursement rates, to ensure they align with agreed-upon terms and are competitive with industry standards​

• Manual negotiation preparation: Use historical data and manual analysis to prepare for contract negotiations, ensuring that the organization’s needs and goals are met​. 
• Compliance monitoring: Manually monitor compliance with contract terms to ensure that both the organization and payers are adhering to agreed-upon terms​. Penalties eat into net revenue. 

• Identify inefficiencies: Use manual audits to identify inefficiencies in contract management processes and implement changes to streamline operations​ 
• Develop templates: Create standardized templates for contracts to ensure consistency and compliance with organizational policies​ 

Of course, these steps assume you have staff with the experience and knowledge to evaluate legal terms and reimbursement rates. Providers who don’t have available, competent contract staff use outside consultants,  bring in a part- or full-time contract specialist or use contract management software. Each has its advantages.  Read more about your best options for executing proactive healthcare contract management. 

Use contract performance data to optimize revenue  

Contract performance data can improve revenue for healthcare providers by:

• Identifying underpayments: Contract performance data helps healthcare providers identify discrepancies between expected and actual reimbursements. By highlighting underpayments, providers can take corrective actions, such as filing appeals or renegotiating contract terms, all on the path to healthcare revenue recovery.  Read how a large orthopedics group recovered $10 million in underpayments here. 
• Enhance negotiation leverage:  Detailed contract performance data gives providers the evidence to support their cases for higher reimbursements and better terms during contract negotiations with payers. It also helps providers recognize their highest and lowest payers, another contract negotiation lever. By understanding which payers offer the best reimbursement rates and terms, providers can adjust their payer mix to focus on more lucrative contracts, thereby increasing revenue. Further, when you can analyze and predict payer behaviors, and patterns, you gain insight into their motivators and goals and can leverage those to achieve your goals. 
• Improve claims management:  Healthcare organizations refer to patterns of claim denials and delays associated with payer contracting as “hassle factor.” High hassle factor scores may make a payer cost INEFFECTIVE to deal with. Staff time on the phone, high denials rates, and heavy documentation requests eat up staff time and labor budget. Learning just which payers burden you gives you contract negotiation power and the rationale to walk away, thereby improving the performance of your overall payer mix. 
• Remain compliant and avoid penalties: Monitoring contract performance data ensures that both providers and payers adhere to agreed-upon terms. This compliance reduces the risk of penalties and ensures that providers receive full reimbursement 
• Track utilization trends: Contract performance data provides insights into service utilization trends across different payers. By understanding these trends, providers can adjust their service offerings and resource allocation to serve the most lucrative revenue streams.
• Net revenue forecasting: Detailed contract performance data enables providers to forecast revenue more accurately and plan for future financial needs. This data-driven approach supports strategic decision-making for financial stability. 
• Denial management:  predictive data analytics uses historical data to flag which claims are most vulnerable to denial. Staff can then intervene to adjust claim details and documentation and meet payer requirements before submission.

By leveraging contract performance data, healthcare providers can enhance their financial performance, optimize reimbursement processes, limit denials, and maximize revenue potential​.

Payer contract performance data to collect:

• underpayments by payer, location, CPT code, and provider
• rate of claim denials
• reasons for claim denials
• denial appeal resolution times
• volume of business by payer
• eligibility verification issues
• prior authorization approval issues
• reimbursement rates by payer

Post-pandemic, signs point to healthcare organizations gaining more control over their contracts and aggressively lobbying for the fees and terms they need. One indicator is that Value Market Research expects the global demand for healthcare contract management software to grow from USD $2.15 billion in 2023 to USD $14 billion by 2032, a seven-fold increase and a CAGR of 23.12 percent. In a high merger-and-acquisition environment, revenue optimization can make or break a lucrative deal. 

Take a quick, self-guided tour through a powerful contract performance optimization and underpayments recovery tool:

Make contract management central to revenue cycle improvement 

Payer underpayments are widespread, with experts estimating they eat up three percent of net revenue every year for healthcare organizations. We’ve talked with clients whose underpayments are as high as seven percent. Just as bad, payers with 30-day response clauses and other provider-unfavorable terms ram through changes before providers have the time or wherewithal to review them. Assertive contract generation and review is the answer.

MD Clarity's RevFind enables practices, physician groups, and MSOs to gain crucial insights from payer data and contracts by first centralizing and digitizing all agreements. This system then scrutinizes all payments against contract terms and fee schedules.  It flags discrepancies for staff to resolve with payers, demanding proper reimbursements as needed. Additionally, it benchmarks your reimbursements against national standards, including Medicare. RevFind valuable insights fuel proactive negotiations and highlights costly trends as well. By identifying systemic root causes of revenue leakage, it boosts cash flow and margins.

Schedule a demo to discover how RevFind will recoup the net revenue you’ve already earned.