Over the past few years, ophthalmology practices have faced a number of challenges related to compensation for the patient services they provide: declining reimbursement levels, increases in prior authorization (PA) requirements and escalating payer scrutiny, with payers requesting patient records prior to payment to ensure clinical documentation supports the services billed. These changes continue to negatively impact the financial health and efficiencies of the practice, making it more important than ever to optimize your practice’s revenue cycle.

Processes to achieve timely and accurate reimbursement can be tedious, but skipping steps can delay patient care and impact reimbursement. Read on for six key steps to streamline the revenue cycle and improve the overall financial health of your practice.

1. CAPTURE PATIENT INFORMATION CORRECTLY

The revenue cycle begins with patient registration. Capturing patient insurance and demographic information correctly is foundational to optimizing financial performance. With Medicare and with most employer plans, new coverages go into effect each January. However, not every plan falls into this timeline, and with a lot of movement in the current job market where people change employers, there is good reason for staff to double-check for changes before every visit.

Many practice management systems have integrated solutions to verify plan eligibility electronically. These solutions utilize the upcoming appointment schedule to screen for effective coverage and flag patients whose insurance may no longer be in effect. This technology can facilitate an automated process for updating patient records. However, the best practice is for staff to ask patients about insurance and demographic changes during check-in.

2. VERIFY BENEFITS AND OBTAIN PRIOR AUTHORIZATION

Many procedures, diagnostic tests and treatments require prior approval from payers. This makes benefit verification and PA the next vital step to ensure payment and avoid unrecoverable denials. Benefit verification consists of reviewing a patient’s individual plan to determine covered services and identify whether a referral or PA is required. It also provides a glimpse into estimated patient financial responsibility, which can be communicated in advance, allowing patients to make informed decisions about their care.

The PA process involves notifying the payer about an upcoming service and providing supporting clinical rationale — diagnoses and documentation — to obtain approval. Once a service is approved, the payer often provides an authorization number and requires it to be submitted on the claim. If the treatment involves repeated administration, some payers will provide a 12-month PA; this must be documented to ensure treatment doesn’t run out before the patient’s next appointment. Any changes made to the procedure or service must be communicated to the payer prior to the claim submission, so that the authorization can be updated. If an authorization was required but not completed, the practice will likely not be paid.

3. COMPLETE CLINICAL DOCUMENTATION THOROUGHLY

Thorough and complete clinical documentation aids in the timely submission of claims and subsequently improves the time to payment. Procedure codes submitted on insurance claims should directly reflect the services provided, and the ICD-10 diagnosis codes should represent the highest level of specificity to capture the reason services were provided. Whenever possible, refrain from selecting unspecified codes, as these can prompt claim denials and medical record requests, resulting in extra work and payment delays. Establish policies related to documentation and coding completion timelines along with a structured reconciliation process to ensure all patient visits have associated charges.

4. UTILIZE CLAIM-SCRUBBING TECHNOLOGY

To prevent claim denials, reduce rework and shorten the time to payment, utilize claim-scrubbing technology and implement a root-cause denial feedback loop. Claim-scrubbing software reviews pending claims for specific criteria known to cause denials, allowing your practice to identify potential issues and correct claim errors prior to submission. Claim scrubbers can include reviews against the National Correct Coding Initiative edits, Medicare national and local medical policies and third-party payer policies. Some software systems allow customized edits, and newer technology on the horizon is using artificial intelligence to analyze historical payer denial patterns to predict claim errors.

A denial feedback loop captures and aggregates historical denials to determine root-cause and identify where breakdowns occurred. Once the root cause is identified, the practice can implement new policies and procedures to prevent future similar denials.

5. DEVELOP AND MAINTAIN STANDARD OPERATING PROCEDURES (SOPS)

An often-overlooked step to optimizing revenue cycle operations is the implementation of SOPs. Since the pandemic, many employees with years of undocumented, detailed billing expertise have left practices, forcing practice leaders scrambling to find replacement talent who understand the unique complexities of their specialty and practice operations. Standard policies and procedures, combined with a structured training program, can help limit the impact to cash flow during times of employee turnover and industry change.

6. MONITOR REVENUE CYCLE PERFORMANCE CLOSELY

Continuously monitoring the revenue cycle is an important steps to improve a practice’s financial health. Trending key performance indicators (KPIs) monthly delivers insight into overall revenue cycle health. The following six KPIs can help you understand historical performance and identify potential issues so that you can quickly implement changes and establish future goals:

• Charges and payments are two financial measures used to capture fundamental patient service revenue and set foundational benchmarks for the business. Viewing this information over time shows trends in practice activity and reimbursement.
• Days in accounts receivable (AR) measures how many days’ worth of charges are outstanding in the accounts receivable. This metric indicates how long it takes, on average, to collect on charges. Your practice can benchmark this metric to see how efficient your revenue cycle operations are.
• The total AR is the sum of all current outstanding balances. Become keenly aware of this figure. Capture it by both responsible party (payers and patients) and by aging buckets. Changes in total AR can offer insight into overall revenue cycle efficiency. A decrease in the total AR could be a sign of improvement, whereas an increase may indicate collectability problems.
• Measuring the aged AR over 120 days as a percentage of the total outstanding accounts receivable is important to determine the collectability of outstanding balances. As charges age, they have a lower probability of being paid.
• The gross collection rate, or GCR, is a percentage of total payments received over total charges billed, which offers a benchmark to assess average reimbursement. It is a great tool to understand aggregated reimbursement and recognize abnormal patterns in cash flow.

BE PREPARED

By taking these steps to optimize your revenue cycle, your practice can reduce denials, strengthen its financial health, and be prepared to navigate the ever-changing landscape of health-care reimbursement. OM

Heather Walton, MBA, CMPE, is the director, revenue cycle operations at Cardinal Health, a distributor of pharmaceuticals, a global manufacturer and distributor of medical and laboratory products and a provider of performance and data solutions for health-care facilities.