Physicians are critical to successful revenue cycle management
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Orthopedic surgeons, like any health care service provider, desire appropriate compensation for the work performed. After years of specialized training and education, we offer a unique benefit to health care systems.
Revenue cycle management in health care may be the most complex system for collecting payment for services rendered in any business sector. The complexity is rapidly accelerating due to government and private payers’ efforts to reduce overall spending.
In most compensation agreements, a portion of compensation is directly related to productivity, which is often defined as the revenue collected by the practice or employer. Various models exist with the bottom line of them all tethered to collected revenue.
Big business
Health care, including delivery of orthopedic care, is big business. Fundamentally, to survive, the enterprise collects revenue to pay for services provided, which includes wages, benefits, overhead and enough margin to sustain and grow the business.
Whether a physician is employed, a partner, a solo practitioner or has another arrangement, the enterprise must invest significant resources to improve revenue cycle management to ensure integrity, sustainability and growth of the business. Payers and patients drive priorities for improved quality and better value while reducing reimbursement and increasing risk for physicians. The ability to develop revenue cycle management that can succeed in this environment requires that all components of the system, especially physicians, are thoroughly integrated into the process.
Many health care systems do not provide an opportunity for providers to be part of revenue cycle management. Rather than bring physicians into the process as aligned partners, lack of transparency allows modification of physician compensation based on collected revenue, which may be below what is potentially available for provided services. This creates an environment where physicians believe they are not receiving fair compensation for their work. Yet, the business entity has established a productivity or revenue collection index for compensation that accurately lessens physician compensation due to less-than-desirable collections. Both parties walk away unhappy and frustrated with the outcome.
Active involvement
Physicians should be actively involved in their component of revenue cycle management to provide the best potential for appropriate compensation. Despite the many components to successful revenue cycle management, physicians must focus on accurate and comprehensive documentation of services provided, proper coding of the episode of care and correct entry of codes into the EMR so charge entries and claim submissions are flawless.
It may be surprising to non-physician health care leaders that physicians may lack formal training and continued education on revenue cycle. There are assumptions that physicians have insight on how proper documentation provides the basis for the selection among 87,000 ICD-10 codes, criteria for Evaluation and Management coding, and selection among 10,000 CPT codes. The decisions on selecting various codes need to align with the documented note describing the services provided, as well as with each other, or payers deny the claim or delay payment.
Despite the complexity, systems can report 75% or more “clean claims,” which have gone through the cycle without denial and receive timely payment. However, in health care, where overall operating margins are often less than 10%, the need to manage up to 25% of denied or delayed claims jeopardizes the financial stability of an organization. If revenue is uncollected, it may directly affect physician compensation and benefits, as well as continued growth and development of the practice. Not including the physicians in this process seems irrational as practices and physicians have aligned incentives.
A practice should provide continued education for surgeons and providers dictating and documenting the service provided, as well as ICD-10 and CPT codes. Whomever dictates the note should receive instruction on how to do that using CPT terminology. External coders/billers more easily recognize the language of the CPT codes to ensure a correct process.
Advanced systems will soon routinely audit the process for physician practices by detecting the language in the dictation that matches the language of the CPT code. Physicians should meet with a professional coder/biller monthly and review an audit of their documentation and coding. They should also review metrics related to clean claims, payment adjudication, denials, accounts receivable (AR) and efforts to manage AR.
An ideal collaborative partnership with the biller/coder and engaged physicians could result in a 90% to 95% “clean claims” rate over time. The practice will be more financially robust, and physicians’ efforts will be reflected in the revenue paving the way for fair market value compensation and benefits. To reach the full potential of the revenue cycle process, a team approach is essential.
- For more information:
- Anthony A. Romeo, MD, is the Chief Medical Editor of Orthopedics Today. He can be reached at Orthopedics Today, 6900 Grove Road, Thorofare, NJ 08086; email: orthopedics@healio.com.
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