Create RCM resiliency with strategies to mitigate volume variations
Steady cash flow is critical for every healthcare organization – accurate budgeting depends on it. Cash flow dips have the power to hinder operations, ultimately affecting patient care. Unexpected revenue can feel like a windfall. However, ‘bonus’ cash that could be put toward new equipment or salaries instead languishes as just another number in a spreadsheet without proper planning.
The last 18 months have seen claims volume variations unlike any experienced in healthcare. In August 2020, over 50% of respondents to a survey said that claims volumes were unpredictable. Thankfully, claims volume has stabilized for many providers and labs, but the underlying issues of claims variability remain.
Fortunately, there are strategies to reduce the effects of claims variations and give healthcare organizations greater control over their revenue stream.
Involve billing leadership in business planning meetings
A critical factor for success is the need for RCM leaders to be involved in senior-level operational discussions. Billing leadership needs to be aware of business planning; business planning needs to be mindful of timelines required to ensure payments. Activities that have effects on claims volume include:
- Facility openings
- Facility closings
- New service lines
- New equipment that produces revenue
Without proper planning, fluctuations in claims volume can lead to billing bottlenecks which cause payment delays. Conversely, volume slowdowns can offer opportunities to reallocate labor to increase productivity.
Plan for yearly seasonal fluctuations
Some specialties see volumes consistently increase or decrease during certain parts of the year. For example, October is often a busy month for radiology because it is breast cancer awareness month. Plan workflows to accommodate for expected claims fluctuations.
Monitor data feeds for breakdowns
Multi-location organizations often have separate data feeds from each department or facility. If claims volumes drop unexpectedly, it may be an IT problem. Check daily to ensure data streams are landing in the EHR/practice management system for claims generation.
Ensure current provider and location credentialing
There needs to be constant communication between billing operations and credentialing specialists. Although it is the credentialing specialist’s job to keep credentials current, oversights happen. Any denial associated with a credentialing issue needs to be investigated immediately to avoid resulting claims volume drops. Credentialing issues often take weeks to resolve. Therefore, it is critical to have current credentialing to avoid claims disruptions.
Monitor volume with reports and analytics
Understanding how volume fluctuations affect KPIs is central to ensuring a steady cash flow. Analytics can help keep claims volume even by signaling trends you may not notice otherwise. Cross-trained staff can be allocated where needed to maintain regular revenue. Some KPIs to watch include:
Days to submission
A rise in days to submission means that future payments will be delayed. If facing high claims volume, consider shifting your workforce to accommodate working through the backlog and getting a higher number of claims moving. If volume drops, consider turning your workforce to denial resolution to accelerate payments.
Days in A/R
Longer days in A/R could indicate higher-than-normal-claims volume. Lower days in A/R may be an indication of claims volume drops. Consider checking in with claims cycle and payment posting operations to see if there are issues that need to be resolved.
Many practices average net collections over three months because the measurement is based on outgoing claims and incoming payments within a single month. An unusually high net collections percentage could indicate a claims volume drop. A lower-than-normal net collections ratio may indicate a higher volume of claims.
Plan for the unexpected
A Healthcare Financial Management Association (HFMA) survey found 75% of responding organizations plan to permanently change how they manage their revenue cycle due to COVID-19. Many providers and labs were unprepared for the claim volume drop of COVID, and hopefully, there will not be another situation like COVID in the future. However, it is best to be prepared as much as possible to keep operations and cash flow steady. Reflect on COVID protocols now and update your emergency policy according to the lessons you learned about keeping claims moving.
Let’s Take On The Revenue Cycle Together!