Receiving payment from insurance companies and payers does not always translate into a profit for a practice owner. In order to generate income, a revenue cycle management system (software) managed by billing professionals (in-house or outsourced) should be in place.
Nitin Chhoda explains what to look for in a revenue cycle management and how to increase profitability in your practice.
In a simple café setting, the revenue cycle starts when the guests order their food and drinks and is completed when they pay their bill.
Revenue Cycle in Physical Therapy
In physical therapy billing and management, the process is much more complex and can be drawn out over much longer periods of time. Any time your practice is waiting for money, you are losing money.
Revenue cycle management is the process of looking closely at your revenue cycle and determining where there are problems. The most obvious kind of problem is errors in physical therapy billing, but there can be much more subtle problems which pose similar threats to the revenue cycle.
Problems with contracts, recurring billing issues, and regulatory compliance problems can also pose a threat to the practice’s ability to collect the revenue that is due.
Evaluating Issues Within the Revenue Cycle
The first place to start if you want to improve the efficiency of the revenue cycle is with time management.
Many of the tasks that physical therapy billing staff completes are quick and simple. A few clicks here, check the numbers there, print and send.
But it is precisely these kinds of tasks that can take up more time than is necessary if an employee is not managing their time well. Here are a few questions that will start the process of improving both time management and efficiency within the revenue cycle:
- How much time does it take to fix mistakes?
- What percentage of revenue is not reported just in case?
- How much time does it take to compute physical therapy billing revenue?
- Are staff members forced to do a lot of duplicate entry?
- How confident are you that you can find mistakes?
- Are you taking risks by reporting inaccurate revenue?
- How realistic are your recognized revenue numbers each month?
There are many ways that evaluating your revenue cycle can improve profitability, but the process will require that your physical therapy billing staff make some changes.
Problems with revenue mistakes are a big one for physical therapy billing, because a tiny mistake can cause a huge delay in revenue recognition.
But another way that the system can be improved for physical therapy billing is to remove the duplicate and sometimes triplicate entry that staff members perform.
Redundant tasks are almost as bad for the revenue cycle as errors in physical therapy billing. For many billing departments, the process of eliminating duplicate entry can add hours to each day in free time. And free time is time that can be spent on other tasks, otherwise known as an increase in productivity.
Evaluation and action are essential if your practice is going to improve productivity in the physical therapy billing process. But the real benefit to the staff and the practice will come when you introduce revenue cycle management software.