By Christy Seely, Marketing Manager at ZirMed
Twitter: @zirmed
As a provider, if you had the opportunity to improve the effectiveness and efficiency of your Revenue Cycle Management system in the biggest possible way while exerting the smallest amount of effort, you’d jump at it, right?
Well, great news! That can be accomplished as long as you know where your efforts will have the highest payoffs. In other words, know exactly where you are spending the most amount of money trying to get payments from both patients and payers.
Here are three ways to best identify where attempting to get paid is costing the most money.
Map the costs—and time—associated with your RCM processes
What are the first steps you take when trying to collect payments from patients and payers? Start there, and then trace each subsequent step you take until you’ve finally been paid.
Understand the costs associated with any product or service you use, and also look for additional costs that could be hidden, unpredictable, or irregular (backing up data, hard drive failure, etc.). Then find out how many staff hours it takes to submit/follow up on a claim, process a payment, or any other similar action. Finally, how long does it take to get paid by various patients and payers, and where are the bottlenecks?
Processes like denials and appeals management have a major impact on both staff time and AR days.
Convert time into dollars based on employee compensation
As the old saying goes, “Time is money.” But how much money? It all of course depends on the person.
Therefore, to answer the question of “how much,” an hourly cost for each employee will need to be calculated, and that includes employees who are not officially paid hourly. Sometimes, multiple people who are a part of the same process may be compensated differently, and in these cases, identify who they are, who does what, and how much time does each spend doing it.
Match up costs with resulting income
Making improvements to your RCM system of course costs money, but rather than seeing them as costs, try to see them as investments and understand what your return is on each investment.
Let’s say someone on your staff spends three hours performing a task. How much money does that produce? How much remains after subtracting the cost of those three hours?
When converting time to money, you’ll likely realize you’re spending more money on RCM than you thought and understand some activities are operating more efficiently than others. You may also come to discover the cost is outweighing the benefit in certain areas, and you’ll want to fix these areas as soon as possible.
Calculating your return on every RCM expenditure will allow you to identify what’s working and what’s not.
This article was originally published on ZirMed and is republished here with permission.