REVENUE CYCLE PRINCIPLES SERIES
Part 2
Getting the correct time allocation by focus area
Derek Morkel, President & CEO, GAFFEY Healthcare
REVENUE CYCLE PRINCIPLES SERIES
Part 2: Getting the correct time allocation by focus area
Part 1 Recap:
The message of Part One was simple - our work is to collect cash in the most efficient manner
possible.
As complicated as it all is, our work can be segmented in two focus areas on a daily basis:
1. Collect more cash
2. Collect cash more efficiently
It sounds very simplistic, but if all of our daily activities were structured around either of these two
areas, I would bet that our results would improve dramatically.
Perhaps an easier way to put this is that all of our daily activities (no matter what the job title)
should answer one of the following two questions:
• Does it improve cash collections?
• Is it improving a process (fixing a broken one permanently)?
These two basic principles can then be broken down into three main areas of focus:
- Clean claims
- Bill efficiently
- Collector productivity
Part One Recap:
Performing the basics correctly on a daily basis and having tools
to measure progress is critical in Revenue Cycle management.
Introduction:
It is hard today to pick up a healthcare magazine that either focuses on finance or receivables
management that doesn’t have an article on the importance of clean claims. The majority of these
articles focus on the myriad of technical problems that cause claims to be reworked or rejected –
thus creating problems downstream.
Our first paper in this series on the basics of Revenue Cycle had “clean claims” as the first main
area of focus. Part 2 – much like the first in this series takes a slightly different angle to the same
problem and starts at the beginning to answer some very basic questions about time and resource
allocation.
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Why is it important?
The key takeaway from Part One was that the entire focus of any Revenue Cycle operation is to collect
cash in the most efficient manner possible.
Consider this: Industry statistics estimate the following relative to registration data and accuracy:
► 70% of the data required for billing comes from registration
► Registration accuracy related to this data is ~ 50%
► 50% of the denials can be traced back to admission based errors
Different studies have come up with slightly different numbers, but they all come up with the same
basic conclusion – registration accuracy is the foundation for a successful Revenue Cycle
process.
A series of short quizzes (be brutally honest in answering these) might help illustrate where the
problem starts and also what the solution is:
Quiz 1:
Please rate the relative importance (by %) that you believe each of the three sections contributes to a well run
Revenue Cycle process.
Functional Area
% Allocation
Clean claims
Bill efficiently
Collector productivity
TOTAL
100%
Quiz 2:
Please estimate the amount of the time that you (or your managers) focus on each of these 3 areas on a daily
basis.
Functional Area
% Allocation
Clean claims
Registration accuracy
Bill efficiently
Collector productivity
TOTAL
is vital to a successful
100%
Revenue Cycle
Quiz 3:
Please estimate the average talent level of each area relative to the
others, i.e. best, average, worst.
Functional Area
Allocation
program and greatly
impacts a hospital’s
bottom line.
Clean claims
Bill efficiently
Collector productivity
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Results
The answers to these three questions at most facilities will produce startling results. Almost every
facility that I have ever visited or been associated with allocates the best resources to either the billing
or collections function and almost never to the registration process. Registrars are often the lowest
paid and least trained people in the business office and yet control not only the accuracy of the
registration data, but are also the customer service face of the organization.
One of the most important positions in any Business Office is the one that checks registration accuracy
(QA). Some facilities do not even have this position (or complete this function) and very rarely is the
position filled by the best available person. It is truly amazing to think that a facility would not have
their best person in admitting focused on this on a daily basis – especially since we have determined
that 70% of every claims data comes from registration.
The old adage of “Garbage in – Garbage Out” is still very relevant today in healthcare. Part One of this
series established that to build an effective process there are three focus areas. The answer to Quiz 1
should provide you with the starting point that you need to take a fresh look at what resources you
have allocated where – relative questions that need answering are:
• Do you have the right people in admitting?
• Do you provide them with right training and incentives?
• Is your best person responsible for admitting QA – DAILY?
• Do you QA all accounts? (Hint: QA for an account takes far less time than rebilling)
• How much of your time do you spend on this function daily?
• How important do you make this in terms of rewards and accountability?
Conclusion
Clean claims are the foundation - the building block of an efficient Revenue Cycle operation. I think
that we all know this – the question is how do we allocate the time and resources to make this a reality
on a daily basis?
This paper did not touch on the many technology applications that
are available today that can help improve the registration process and
improve claims accuracy. The first step is to acknowledge that “clean
claims” is the critical first step in the process and that it deserves the
time and resources to make it successful. Making sure that everything
is airtight at the beginning of any process in any business is critical
– collecting receivables is no different. Billing efficiently and having
superior collector productivity will be significantly enhanced if you get
the first step 100% correct on a daily basis.
For more
information,
contact us
today at
800-228-0647
sales@
gaffeyhealth.com
GAFFEY Healthcare hopes that the information contained herein will be informative and helpful on industry topics. However, please
note that this information is not intended to be definitive. GAFFEY Healthcare and its affiliates expressly disclaim any and all liability,
whatsoever, for any such information and for any use made thereof. Recipients of this information should consult original source materials
and qualified healthcare regulatory counsel for specific guidance in healthcare reimbursement and regulatory matters. © 2014 GAFFEY Healthcare
www.gaffeyhealth.com
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