Healthy revenue cycle is crucial to a post-acute agency’s overall fitness.
This is even truer now, with the new payment model on the horizon. QIRT’s financial experts have created a “fitness routine” to help strengthen your agency. Make use of QIRT’s Financially Fit List for toning processes and preparing benchmarks.
What does your agency’s revenue cycle look like? Summer is a great time to focus on fitness. Take some time this summer to ensure your agency is financially fit with QIRT.
#1: Verify Eligibility on a Bi-Weekly Basis
Nonexistent or poorly performed eligibility checks can have far-reaching effects on an agency’s revenue cycle health. When verifying eligibility, intake personnel are notified of differences in coverage and differences in demographic information. Claims submitted with incorrect data can account for a large percentage of an agency’s outstanding revenue. Be sure to train staff on what to review for, such as the patient’s DOB or contract number, etc. Reducing these low-level rejections is crucial to an agency’s financial health.
Does your agency perform these checks solely at admission?
Single checks run the risk of missing a beneficiary enrolling in a Medicare Advantage plan partway through the episode. Commonly, an agency finally resolves F2F or Plan of Care issues, only to have a claim expire because Medicare was not primary! Checking eligibility on the first of each month is not sufficient: information retrieved can be as many as ten days outdated.
Bi-weekly verification is one of the first steps to a healthy revenue cycle. The marketplace abounds with tools to automate much of this process. Such tools allow for differential reporting and other time-saving options. We recommend contacting your EMR support team to discern any built-in capabilities available.
#2: Benchmark Your Agency
Benchmarking is a function of management oft-mentioned (but seldom utilized) in agencies of all sizes. When establishing a system of benchmarking within your agency, it is crucial to first define the objectives of your agency. Data and the forms that express data are limitless. Be sure to define what will give your agency a proper return on time invested. Make use of the new QAPI program regulations. Establish data within your agency for benchmarking and develop different Performance Improvement Projects (PIPs) to both meet regulatory requirements and improve overall processes to ensure financial fitness. What processes make sense for you?
In a healthy revenue cycle, benchmarking systems should begin with cash flow metrics. Increasing cash flow alleviates financial pressures in stressed agencies and allows for investment in growth. This is true regardless of an agency’s financial health.
Examples of pivotal metrics include:
- Days Sales Outstanding (DSO): 50 days or less
- AR over 90 Days: 20% or less
- Days to RAP: 7 days or less
- Days to Final: 12 days or less
- Write-off Percentage: Less than 1%
How well does your agency measure up according to these guidelines?
Keeping apprised of these numbers as they fluctuate is both an early-warning system and a measure of effectiveness. Even without perfect numbers, a jump in AR over 90 can be a warning to take steps to recover receivables, a service offered by QIRT. Ultimately, benchmarking allows for timely intervention when one or more metrics fall outside of financially healthy parameters.
#3: Managed Care Contracts Are More Than Just Rates
As managed care companies increase their penetration of Medicare/Medicaid, it is more important than ever to develop sounds strategies for collaboration with these entities. With the correct approach and a healthy revenue cycle, contracting with managed care contracts can preserve margins and allow for growth through expanded coverage areas and referral sources.
The universal approach to these negotiations? Calculate the direct costs of providing a service to derive the price that would allow for your desired gross margin. While there is no universal figure for acceptable gross margin, there is more to this picture than many realize. When preparing to negotiate, think about the kind of payer-provider relationship you want. It is important to set goals for the negotiation and to understand if you are looking for a one-time rate change or the beginning of a long-term relationship.
Besides a good rate, what are other considerations in establishing a long-term partnership?
Quality-based incentive plans are an example of how agencies can negotiate for the mutual benefit of both parties. Benchmarks such as hospital readmissions or admission times can be a source of value to the managed care organization and leverage for your agency. You may also be interested in risk-sharing models, new products, or network affiliations.
#4: Make Technology Work For You, Not Against You
Modern technology is steeped in paradox. It is a remarkable gift that often feels like a curse. Many tools promise the world at your fingertips, yet leave you stuck in front of a screen for hours staring at a user guide.
Does technology leave you feeling out of control?
Be sure your new priority is to develop a strategic vision for technology adoption.
Successful technology adoption begins with taking a step back and analyzing your workflow from a bird’s-eye view. Contemporary solutions exist that allow for infinite minutiae. The goal of revenue cycle management (RCM) is to chisel away at the extraneous until what is left is a streamlined process falling within compliance guidelines. Keeping this in mind as you shop for solutions can help prevent the “informational overload” and transactional overhead that plagues many agencies.
About QIRT: QIRT leads the post-acute industry in coding, billing, and consulting. Across the United States, QIRT provides agencies with multi-level internal and outsourced coding, quality assurance, appeals, billing, consulting, and education.
QIRT financial and billing experts guide post-acute agencies in streamlining all aspects of the revenue cycle.
For more information on getting your agency financially fit or any topic in the post-acute industry, email ContactUs@QIRT.com or call 855.485.QIRT (7478).