Revenue Cycle Optimization: How to Improve Your Healthcare Practice's Financial Health

The cost of delivering the proper medical care to patients is constantly rising. PwC research shows that 2025 will see the highest medical cost growth rate in 13 years, with expenses rising between 7.5 and 8%. While high patient volumes could indicate that a practice's profits are in good health, healthcare enterprises could inadvertently be hemorrhaging money without attention to EPM revenue cycle optimization.

Revenue cycle optimization is the key to managing healthcare finances more effectively. The correct revenue cycle management (RCM) strategies ensure that you're accounting for every cent and maximizing profits while centering patient care at the heart of your organization.

What is Revenue Cycle Optimization in Healthcare?

Your revenue cycles are the way you understand what money is coming in and what your expenditure is. Outgoing expenses include staffing costs, utilities, and other overheads, as well as the cost of equipment and medicine, among other aspects. Incoming costs include payments from patients and insurers.

Revenue cycle optimization is an essential aspect of healthcare financial management. It carefully assesses all incoming and outgoing funds and looks for ways to improve.

Aspects Impacting Revenue Cycle Optimization

Healthcare financial management is complex due to aspects such as prior authorization forms, patients with multiple insurers, and claims administration. Each practice may also have its own payment policies that impact how often money is coming into the facility.

In an ideal world, every healthcare facility or mobile practice will always have the cost of every aspect of care covered. However, the following issues can cause a breakdown in revenue cycle management:

• Denied claims: The higher the rate of claim denial, the more a healthcare practice will struggle to cover the costs of treatment.

• Poor medical coding/billing: Practices that fail to bill or invoice correctly can take in less money than needed to cover the cost of procedures or medication.

• Failure to collect: Where money is owed to a healthcare practice, efficient processes should be in place to collect these funds or prompt next steps, such as involving a collections agency.

When any of these issues occur, it can cause cash flow to slow to a trickle while outgoings can increase exponentially, potentially leaving healthcare practices deep in debt.

Strategies for Better Healthcare Financial Management

Understanding these problems is the first step to achieving revenue cycle optimization. When you focus on every aspect of your finances, you can work to create improvements that enhance your organization's profitability.

Identify Weaknesses in Your Revenue Cycle

Start by understanding exactly what's costing your practice excess money and why. The above issues are excellent starting points. For example, if you don't have a collections process in place for outstanding payments, you could work with your finance teams to implement one.

You might also assess your medical billing and coding practices to ensure you're always covered for the treatment options you offer. A single wrong code could lead to the incorrect amount being paid or even a denied claim. Repeated errors in this area could also result in fines and other penalties.

Utilize AI-Powered Solutions

The use of AI in revenue cycle optimization is on the rise. AI (artificial intelligence) is already used across multiple verticals to forecast trends, expected revenue, and various business outcomes. In healthcare financial management, AI can be useful for capacity planning for patient intake and staffing challenges, making the claims process more efficient, and even automating the collections process.

Work with a Dedicated EPM Revenue Cycle Consultant

Your electronic practice management (EPM) tools should be a primary tool for revenue cycle optimization. NextGen EPM tools should produce reports that show your exact financial status and quickly allow you to highlight areas for improvement. However, to get the most out of your EPM revenue cycle optimization solutions, you may need assistance from experts to set up your software correctly and understand all the options at your fingertips.

Trust TempDev's Expert Revenue Cycle Optimization Consultation Services

TempDev is the healthcare industry's premier consultancy for EPM revenue cycle management and support with all aspects of NextGen healthcare software and tools. Our team can help you automate many tedious and complex tasks, improving your ability to manage claims denials, enhance cash flow, and collect payments.

We're experts in handling all aspects of the healthcare revenue cycle, from correct charging to posting payments. Trust TempDev to partner with your billing staff to assess your current status and identify areas for improvement, creating meaningful, actionable plans to boost profits while ensuring patients still receive the highest standards of care.

Our clients can reduce their monthly close time by 28 days and decrease days in accounts receivable by 22 days. To learn more about TempDev, contact us here or by calling 888.TEMP.DEV.