11 Key Strategies to Optimize Cash Flow in RCM

Improving your healthcare practice’s revenue cycle management is easier than you may think. Various reasons, including insurance verification and denial management, impact your practice’s revenue. So, if your billing team or department struggles to keep up – it might be a good time for change. To boost your cash flow in RCM, you must first analyze the inner workings details of your billing department – this shall help you determine where changes might need to be made.
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Leave your billing headaches and the limitations of conducting a successful healthcare financial analysis by outsourcing to a third-party billing company. Before taking that leap, you must know and understand the following:

Role of RCM in Healthcare

Cash flow in RCM for healthcare institutions highly depends on streamlining billing operations. RCM deals with a healthcare institute’s business and clinical sides by collectively working the patient’s care data with the administrative data, which includes:

Patient name
Payer details and other personal information.

Communicating with insurance providers is essential for sufficient cash flow in RCM. Furthermore, below are some of the main functions of an effective revenue cycle management, including:

Classifying medical services into a chargeable bill
Submitting medical claims to relevant insurance providers
Determining patient balances and collecting payments
Collect the necessary information/data for a smoother patient onboarding experience and generate the medical record number for meeting regulatory, financial, and clinical requirements.
Applying or rejecting payments via remittance processing
Following up with patients and insurance companies for reimbursements

Improving Cash Flow in RCM for your Medical Practice

A healthier cash flow in RCM helps deliver better patient care by making the necessary funds available for acquiring medical equipment and improving the healthcare infrastructure. Maximizing cash flow in RCM should be a priority of practice owners; this can be done by understanding and implementing effective strategies.
Below, we have compiled the top 11 effective strategies for revenue cycle that can help you increase your practice’s cash flow.

1. Collect Patient Information

A significant cause of revenue loss for healthcare providers is the oversight of updating patient insurance information. Failing to have accurate insurance details on file leads to claim rejections, shifting the payment burden onto the patient. To enhance cash flow in RCM, providers must use tools that automatically verify insurance coverage before each appointment.

2. Automatic Eligibility Checking

Integration between your practice management and billing software is vital for simplifying cash flow in RCM. It facilitates the automatic checking of patient eligibility for services. It also ensures that patients are covered for the upcoming services, allowing providers to inform them about their options transparently if coverage is lacking. Streamlining this process optimizes cash flow in healthcare revenue cycle management.
Furthermore, a study by the Healthcare Financial Management Association (HFMA) revealed that practices implementing automatic eligibility checking reported a 20% decrease in billing errors.

3. Taking Payments at the Time of Patient's Visit

Providers can use integrated practice management and billing systems to address challenges in collecting outstanding balances or copays. A practical approach involves collecting patient balances at the beginning of their visit. This facilitates a smoother patient experience and acts as a safeguard for the medical practice’s cash flow in RCM, increasing upfront collections.

4. Integrated Billing and EHR

Your billing software should effortlessly integrate with your Electronic Health Record (EHR) to boost medical practice cash flow. This integration provides patients with a user-friendly platform on their patient portal to review and understand their medical bills. This enhanced understanding significantly encourages quick payments.

5. Outsource RCM Services

Consider outsourcing RCM services to an expert billing services provider to increase cash flow. This becomes particularly important when your billing department experiences a high staff turnover rate. By entrusting RCM services to experts, you offload a substantial part of your billing responsibilities, empowering efficient claims management and a subsequent increase in practice revenue.

6. Maintaining Accounts Receivable

A substantial problem towards an effective cash flow in RCM is a heavy volume of accounts receivable – the pending payments from patients or insurance companies for healthcare services. Minimizing accounts receivable is essential for a healthier cash flow in healthcare practices.
A well-managed A/R relies on a dependable and efficient payment system, ensuring timely payments from patients and payers. Introducing an EHR system serves as a bridge between payers and the healthcare practice, computerizing payment processes.

7. Computerization of RCM Workflows

Enhancing revenue in healthcare relies on effective RCM. A vital approach is structuring the unique workflows. Here’s where automation can significantly impact the cash flow in RCM:

Automate front-end tasks for speedy claim processing.
Streamline the migration of patient files and create necessary non-patient files.
Automatically verify and correct patient information.
Update outdated and add missing policies before a patient’s visit.
Verify patient insurance eligibility before the scheduled appointment.

Many claim denials arise from errors in the initial RCM stages, like missing patient information or inaccurate coding. Embracing automation lowers claim denials and makes the entire revenue cycle more cost-effective, ultimately boosting profitability.
Recent industry statistics indicate that practices adopting comprehensive workflow automation experience a 30% decrease in claim denial rates. This highlights the impact of automation on the efficiency of revenue cycle management.

8. Chronic Care Management (CCM)

Chronic care management is beneficial for providers to increase income while helping patients. A well-structured CCM program introduces a fresh source of cash flow in RCM without burdening your team.
Additionally, a chronic care management system enhances financial returns and develops a practical approach to patient well-being. This dual impact is valuable in the healthcare landscape.

9. Improving Claims Management

Outsourcing RCM services can increase the quality of claims management, and significantly impact the cash flow in RCM. By joining forces with an RCM partner, your practice can achieve clean claims rates as high as 99%. Expert billers use claims scrubbing and tracking to optimize every claim for payment.
Incorporating these advanced claims management techniques minimizes errors and accelerates the reimbursement process. This, in turn, contributes to a more healthy practice cash flow.
Statistics indicate that practices outsourcing claims management witness a remarkable 25% reduction in claim denial rates, emphasizing the effectiveness of this approach.

10. Improve Denial Management

A well-functioning denial management system is essential for maintaining an optimal cash flow in RCM. Billing services partners play a vital role in this aspect. They track claims through payment and address and rectify denials, ensuring a seamless resubmission process for payment.
This practical denial management approach reduces revenue loss. Practices partnering with RCM services report a 30% decrease in the overall impact of claim denials on practice revenue.

11. Offer Multiple Payment Options

Increase patient collections by providing a variety of payment options. Allowing patients to pay through credit card, check, or bank draft and reminding them via the patient portal for overdue bills ensures convenience for patients and maximizes collections.
Implementing multiple payment options and using patient portals for notifications and follow-ups results in a 20% increase in on-time payments. This straightforward strategy contributes directly to improving the overall cash flow of healthcare practices.

Conclusion

Adopting these key strategies strengthens cash flow in RCM and develops a patient-centric and financially resilient healthcare practice. By addressing key aspects of improving RCM, the healthcare practices can boost their financial health. Implementing these strategies ensures a healthier revenue cycle and enables practices to provide better patient care.