Advanced Revenue Cycle Analytics: An Overview
For a long time, the majority of practices have focused their attention on keeping out denials. It’s an obvious loss of revenue when claims get denied, especially since 50% of all denied claims never get resubmitted. While keeping a low denial rate is important, many practices are actually paying a higher cost to keep their denial rate looking good than they realize.
Reducing Denials the Wrong Way
When the focus is only on reducing denials, many practices pay a high cost. There really is a “wrong way” to prevent denials. The wrong way to keep a low denial rate is to have your coders reviewing every single encounter. It slows you down on the back-end, it costs more than many of the denials actually cost, and it makes you entirely dependent on individual coder knowledge, which puts you at risk with coder turnover.
Slow on the Back-End
Maintaining a low denial rate by reviewing every single encounter slows down the back-end of the revenue cycle. Coding accuracy should not come at the cost of slow revenue cycle processes. In this strategy, practices have lost sight of the goal to get claims out the door as quickly and accurately as possible. Accuracy may be there, but speed is not. You need cash flowing back into your practice quickly, and having your coders review every single encounter does not help.
It may actually cost you more to review every single encounter than it does to get a denial. Let’s assume that your coders are making $20 an hour. The average coder can review 20-25 encounters in an hour. If they have 1000 encounters to process, it will take the average coder who is reviewing every encounter 40 hours. That costs the practice $800. It only takes the coder using accelaSMART 7 hours to complete the same amount of work. It costs the practice $660 extra dollars to keep a low denial rate with their current workflow of reviewing every encounter.
Dependent on Individual Coders
The fact is that there is a lot of coder turnover in the market today. If your strategy for keeping a low denial rate is to have your coders manually reviewing every single encounter, then you are fully dependent on the knowledge of your best coder. What if that coder were to retire, move, or switch companies? Your denial rate would suffer. That is a risky strategy.
Reducing Denials & More
The best denial management strategy is about far more than reducing denials. You can improve your coding accuracy, prevent denials, and save hours of time. Today, the best revenue cycle management strategies are about improving the efficiency of the entire revenue cycle.
Better Coding Accuracy
The best coders in the world are still human. They make mistakes and miss errors. That is why coding edits and automation are central to the top revenue cycle strategies of today. With custom rules, all of your coders have the same coding knowledge. They all get stopped on the same encounters, and if your best coder moves, your revenue cycle won’t miss a beat.
This excellent coding accuracy is even better because it also saves you time. Because of the custom edits, your coders only have to stop to review encounters with errors. This is called coding on an exception-only basis, and it is critical to a top-notch revenue cycle strategy. Coders who only review encounters on an exception-only basis are able to process as many as 141 encounters per hour. That is huge time savings compared to the average 20-25 encounters per hour.
Productivity increases like this are a win-win for the practice. You can reallocate the extra time to handle all of the revenue cycle work that can easily pile up. Prior auths, following up on denied claims, and more can all get done faster because your coding team is working more efficiently.
Revenue Cycle Analytics
One of the best revenue cycle strategies is to include analytics on a quarterly basis. There is always room to improve the productivity of your coding staff. Analytics helps managers identify these opportunities and create action steps.
Still Need Help with Denials?
If you are looking for more resources on dealing with denied claims, we have put together a free denial management guide. Download this free resource to brush up on your denial management strategies.