Revenue Cycle

Tip: Get paid what you’re due

Patient Financial Services Weekly Advisor, March 4, 2005

Front-end and back-end processes play a part in securing reimbursement and proper revenue cycle maintenance. Take the following steps to stay aware of what you're owed:

1. Book all of your contractual adjustments at time of billing. This practice cannot be stressed enough, says Steven Berger, FHFMA, CHE, CPA, president of Healthcare Insights, LLC, in Libertyville, IL. The reason it should be done all the time, he says, is that "it's good accounting, good finance, and good management."

If you're booking adjustments at time of payment, you're booking the payment, he says. "It means you didn't know how much money you were expecting to receive for that service. That is outrageous," he says; however, it is not out of the ordinary:

  • With inpatient cases, it's hard to know beforehand because you're getting paid a per diem or case rate (DRG). You wouldn't know how long the patient will stay or exactly what his or her ICD-9s are going to be to turn into a DRG. You can take a guess, but you just don't know.

  • On the outpatient side, there are not a lot of excuses for not knowing ahead of time, Berger says. "If a patient is coming in for an abdomen CT, there will be a charge-but if the patient has been pre-registered and you already have done pre-certification work, you should know the amount of the patient's payment." Some providers have a system that allows them to instantly determine their net revenue for that case.

    2. Take advantage of a contract management system. Contract management systems allow hospitals to put their contracts into the software. By inputting essential elements that create the net revenue, the system produces the net revenue, and therefore the net receivable.

    Berger acknowledges software implementation requires time and money, but that "there is a small upfront amount you have to pay, which can get paid back through better reimbursement. In my experience, the payback of this cost can be as little as four weeks."

    A contract management system can also help your staff recognize underpayments, which Berger says are common from managed care companies. "With software, you can identify those underpayments, which they weren't able to before, because they were booking the payment without knowing whether it was right."

    3. Ensure proper preregistration and precertification processes on the front end. Pre-registration and the registration process are key, Berger says. "The biggest thing I say in revenue cycle classes is that the most importance pieces are preregistration and precertification. If you do things from the beginning correctly, it's even more important than billing and follow-up."

    This week's tip was excerpted from the March issue of PFS Advisor: Your comprehensive revenue cycle resource. For more information, click here.

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