Industry Insights

Five Signs Your Revenue Cycle Needs Immediate Attention

November 2015

With ever-changing billing regulations and increased payor scrutiny, skilled nursing facility (SNF) billing personnel and financial leaders face more challenges than ever. Providers that don’t stay on top of changes affecting billing and accounts receivable (AR) collections risk noncompliance and decreased cash flow.

If you recognize these five warning signs that your revenue cycle needs immediate attention, you’ll have a good start toward implementing simple solutions that can get your community back on the right track.

  1. Irregular cash flow

    The most obvious warning sign that the revenue cycle might be suffering is inconsistent or decreased cash flow. While multiple factors can lead to a change in cash flow, such as a decrease in census or payor-specific system or contract issues, a reduced influx of cash usually can be traced back to the business office.

    Many business office personnel wear several hats, ranging from answering the phone to human resources to accounting duties such as payroll or accounts payable. Often, this means billing and collections functions receive insufficient time to do a thorough job.

    When coupled with inadequate training and technology (more on that in a moment) and sequential billing requirements of many payors—most notably Medicare—outstanding balances can accumulate quickly and create a cash flow crisis.

  2. Lack of defined revenue cycle procedures, from admissions through collections, where personnel are held accountable for their role in the overall process

    To improve your overall revenue cycle effectiveness, it’s crucial to realize the revenue cycle begins at admission—or, ideally, prior to admission—and continues through discharge. In addition, it’s important to establish well-defined processes with built-in accountability.

    The admissions staff has a key opportunity to start the revenue cycle process right by gathering accurate information about a potential patient’s payors and available benefits. Compliance and cash flow issues often arise because of failure to gather correct, thorough information upon admission.

    For instance, patients enrolled in a Medicare Advantage (MA) plan versus traditional Medicare still will have a Medicare card and may not understand the differences between the two Medicare options. If the admissions representative doesn’t realize the payor actually is an MA plan, the representative is unlikely to obtain the necessary authorizations, causing denial of the claim when it’s discovered the payor was incorrect.

    Business office functions typically are considered the heart of the revenue cycle; this means it’s that much more important for business office personnel to work within defined frameworks, such as private and Medicaid billing completed by the third business day and Medicare claims submitted by the 15th of each month. Collections activities also should be scheduled into the monthly calendar, with results being consistently reviewed and evaluated by management, as discussed below.

    Nurses also play a critical role in revenue cycle success, since much of the information on claim forms is clinical in nature, including assessment data and diagnosis codes. For example, inaccurate, late or missed assessments can account for considerable reduction or delay in payments. Because of the integral relationship between clinical and billing, interdisciplinary communication should be a priority for any organization looking to improve revenue cycle results.

  3. Poor clinical to billing communication

    Since the inception of minimum data set (MDS) 3.0, it’s more important than ever for business office personnel and clinicians to communicate frequently and collaborate in a pre-claims submission review process each month. This review process is commonly called a triple check, since it typically includes representatives from nursing, therapy and billing. The purpose of the triple-check process is to confirm information on the UB-04 claim forms against the supporting documentation, which improves the accuracy of claims submitted to the payors.

    A thorough triple-check review should include verifying patient demographic information, ancillary charges and billing and diagnosis codes, among other claim form items. A triple check also should verify required documentation, such as signed physician orders, certification for skilled care and validation reports to confirm assessments were accepted.

    The triple-check meeting should be the final step before any claims are billed—to improve cash flow and compliance as well as provide billing and nursing with peace of mind that what is being billed is accurate and supported by documentation on file.

  4. Inadequate technical training and resources

    Over the last several years, Medicare—and in many states, Medicaid—billing complexity has increased. Gone are the days of straightforward scheduled assessments and simple Part B claims. The surge in managed care in the long-term care and senior living marketplace has added another level of sophistication.

    With the addition of many types of unscheduled assessments, Part B 59 and KX modifiers and, most recently, G codes (used to report the patients’ functional limitations), the importance of thorough training and reliable resources for business office personnel cannot be overstated.

    Billing for SNFs is unlike billing for any other provider type. All billing is not equal, and expecting someone who has billed for a physician’s office or hospital, for instance, to acclimate to SNF billing with little or no training is unrealistic and will negatively affect compliance and overall revenue cycle health.

    As you look for training options, keep the quality of training in mind. It can be tempting to choose low-cost options such as articles or webinars offered by Medicare Administrator Contractors, but these general resources—while helpful in supplementing knowledge—typically don’t provide the detailed education your business office manager will need to create and submit claims, follow up on claims appropriately and efficiently resolve any technical errors or payor disputes.

    Be willing to seek out and invest in quality training and consulting resources to ensure your billing team has ongoing access to the latest technical information and guidance around best practices.

    As billing has increased in complexity, so has billing software. Many integrated systems are highly customizable, which can be exciting or overwhelming, depending on the skills and knowledge of billing personnel.

  5. Inconsistent AR oversight

    If management and billing personnel are not having monthly AR meetings to review outstanding balances, there likely are revenue cycle and cash flow issues. Even for the most seasoned and knowledgeable billing personnel, there are typically a few balances that are difficult to collect. It can be easy to push those challenging accounts to the back burner or give up the collection efforts entirely.

    By contrast, consistent meetings where management reviews the AR aging reports with business office personnel can increase accountability and improve the likelihood of pushing those balances through to resolution. 

    Several important operational improvements can result from these meetings, including:

    • More effective collection efforts
    • Identification of business office knowledge or training gaps
    • Management awareness of complicated private-pay collection or specific payor or technology issues that may be better handled by someone on the executive team

Revenue cycle management isn’t going to get easier. By implementing some relatively simple but highly effective best practices—and ensuring the personnel most directly responsible for cash flow have thorough training and helpful resources—SNFs can thrive despite increased regulatory complexity and oversight.

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