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5 Revenue cycle management Issues that could be Injuring your Practice

5 Revenue cycle management Issues that could be Injuring your Practice
22 April 2014

Rising healthcare costs are a huge concern for everyone, but many small medical practices suffer from self-inflicted injuries that could be avoided.  Failure to fully capitalize on the services performed, poor revenue cycle management, and underutilized resources are just some of the examples.  Here are five problems that could be costing your practice money without you even realizing there’s an issue.


Many small practices assume that uninsured patients make up the majority of bad debt, but in reality more bad debt comes from uncollected copays and deductibles from insured patients. When a patient walks out the door without paying, the odds that the practice will see the collected amount decrease by over 50%. The patient may simply forget, or intentionally put the bill behind other pressing bills indefinitely. The best way to eliminate this debt is to require the patient to remit the copay or deductible at the time of the visit.


Medical insurance companies deny claims for a variety of reasons, not all of which are related to the procedure or patient. According to the 2013 National Health Insurer Report Card published by the American Medical Association, 33.49% of the claims rejected by Medicare were for billing errors. The billing error rejection rate from private health insurers ranged from 12.88% to 40.37%. Set up a system for promptly handling claim denials. When your practice receives a rejection, review the reason code, comply with the insurer’s request (if possible) and resubmit as quickly as possible.


Downcoding is the act of using a diagnosis or procedure code for a less expensive service than was actually performed. Some practice employees are tempted to do this in the interest of avoiding an audit. Others may simply not select the right code at all and give away their services for free. Many payors have adopted a best practice of monitoring the number of procedures at the clinic level. If they notice your practice is submitting more of a particular type of claim than others, or is not charging for other services that typically go together, it may be worth the effort to take a closer look at these scenarios. Don’t be afraid to charge for the actual services rendered, but do thoroughly document each service or procedure so you have adequate documentation to back up your statement if necessary. Your EMR software can help your practice run self-audits to guard against these revenue leaks.


It’s the clinic’s responsibility to make sure services are covered under the patient’s medical insurance. If the payment is in question, contact the payor for authorization before you perform the service. Your EHR can help you keep track of authorized and unauthorized services.


Don’t rely on patients to tell you when their plans have changed. Contact them and reconfirm their appointment several days in advance, so you have time to fill the time slot if they need to reschedule. Send another reminder within 24-48 hours, and consider charging a no-show fee if the patient does not show up. The fee won’t make up for the cost of the missed appointment, but it will reinforce the importance of keeping an appointment in the future.

Just like the biggest killers in personal health, the problems that kill your practice can creep up unnoticed and then it’s too late. By taking steps to resolve these issues, you can help keep your practice in the black even in the face of declining payouts and increased regulation.

Some EHR solutions, like ZH Healthcare’s ZH OpenEMR, have integrated strong practice management and revenue cycle tools into their systems.