Keys to maximizing revenue and reducing inefficiencies for physiciansIf cash is king, then cash flow optimization provides physicians the keys to the kingdom in terms of opportunities to grow and maximize their practices. With increased cash flow comes the flexibility to hire staff, invest in specialized equipment, take advantage of purchasing discounts, reduce potential borrowing expenses and make other operational decisions that benefit a practice in the long term. The implementation of the Affordable Care Act (ACA) is bringing numerous challenges – and opportunities – for doctors looking to get the most out of their revenues, said Michael Miller, vice president of healthcare banking for Fifth Third Bank in Central and North Florida.The Connection to Patient CareFew physicians enter the medical field because they’re passionate about business operations, noted Miller. “The majority is in it for the patient care, and take great pride in how their clinics operate,” he said. “Running a tight ship operationally can significantly affect the quality of patient care. It can mean everything from more one-on-one time during appointments to the ability to build on-site labs that enable faster test results. Improving cash flow is a smart business decision that ultimately benefits patients most of all.”Track the Revenue Cycle Step one to optimizing cash flow is data gathering. Practitioners can use revenue-tracking software to map the ebb and flow of funds throughout the month. By reviewing this data alongside records of insurance claim denials, they can identify inefficiencies in the billing and collections process. Miller advises clients to obtain reports on a monthly, or ideally weekly, basis. “Successful practices have a disciplined approach to managing claims and an even more disciplined approach to managing denials, as they are the primary reason for collection delays,” he said. “The key is to go back to claim originations, determine why denials happen and use that feedback to improve the process.”Improper coding is the most common factor in denials, according to Miller. And the coding system is about to become even more complex. The Center for Medicare and Medicaid Services (CMS), which distributes payments to hospitals and physicians, will implement a new system in October 2014. The ICD-9 code sets currently used to report medical diagnoses and inpatient procedures will be replaced by ICD-10 – a transition required for everyone covered by the Health Insurance Portability Accountability Act (HIPAA). The new codes are designed to improve the “granularity” of billing – for instance, certain procedures will be identified as being performed on the “left side” or “right side” of the patient’s body. As a result, billing departments will need to be aware of as many as 87,000 codes. The ICD-10 system is already used by 99 other countries, and its implementation in the United States could eventually enhance global communication of patient information. That could have a positive effect on Central Florida’s healthcare system, which sees a heavy volume of international tourists in its emergency rooms and urgent care systems, Miller said.One element of the ACA implementation is the rollout of electronic healthcare records in an attempt to make patient information more readily available to multiple physicians. CMS has issued awards to hospitals and physicians who have already implemented the records, said Miller. “By 2014, we should see a vast improvement in terms of access to records,” he said. “By eliminating replication of tests and procedures, this will lead to more cost effective care and accurate billing. Since every one of a patient’s doctors will share access to the same information, it will support a more consistent revenue cycle.”Invest in Training To navigate this increasingly complex system, staff training is critical – starting at the top. “Doctors need to be trained in the new codes so they can be more detailed in their notes for coders,” Miller said. “Many smaller practices should consider outsourcing coding to a third-party physician management program or billing service that can help ease the burden.” Training the front-desk staff, who serve as patients’ first point of contact, is also paramount. During the first visit – or prior to the visit during an initial phone call – the receptionist should collect insurance information and set up a payment plan, if needed. During each visit, this staff member should verify any changes in insurance and identify for which specific charges the patient is responsible, said Miller. “You’d be surprised by the number of practices that still mail post-visit bills with a 30-day payment deadline, which automatically builds in a month-long lag,” he said. “This means physicians have to float all the expenses associated with treatment or care until the time they’re reimbursed. It’s best to process that charge when the patient is physically present in the office.”  Industry-wide, deductibles and co-pays are rising – and many patients are using higher-deductible plans, which translate to higher out-of-pocket fees and can be more difficult to collect, Miller noted. “Physicians need to have a collections strategy in place, even if it requires flexibility with payment plans,” he said. “The key is getting that monthly debit or credit charge authorized in the first place.” Several banks, including Fifth Third Bank’s merchant services division, offer payment software that can assist.Improve Staff CommunicationAfter patients have left the office, ongoing communication among key staff members is critical. Physicians, billing and accounting departments, and administrative staff need to create a “feedback loop” to share relevant information, said Miller. “Often we see a disconnect among those interfacing with patients and those collecting old bills,” he said. “If a patient comes in and a prior visit hasn’t been paid, or their insurance has changed, the front-desk staff needs to know.” If a patient’s current insurance status is in question, staff can track it down using a clearinghouse. As another example, the accounting department should convey claim denials resulting from paperwork errors to the medical staff, said Miller. “It can be as simple as, ‘Dr. Johnson forgot to check the box at the bottom of page 2,’ and then you know to avoid that mistake going forward,” he said.Hire a Practice Manager One potential solution: hire a practice administrator experienced in financial operations to oversee all aspects of coding and billing. “Having one person take ownership of cash flow along the entire spectrum of care can go a long way toward making the system less fragmented,” Miller said. This person can identify revenue trends and problem areas, communicate them to other staff and ensure denied claims are resubmitted on a timely basis. When a practice has five or more physicians, it’s time to start considering hiring someone for such a role – and Miller recommends adding another administrator at the 10-physician threshold.Immediate Impact The impact of cash flow optimization can be immediate, Miller said. “Take, for example, a practice that wants to maintain a cash balance of $1 million with an average collection window of 45 days,” he said. “If the practice bills on average $50,000 a day, and they can shave 10 days off that collection cycle, it would boost their cash position by 50 percent,” he said. “Or, if a practice could get by with a $500,000 balance, the same technique would double their cash.” Gathering and analyzing the right data, investing in staff training and enhancing communication can yield solid results, said Miller. “Taking these simple steps,” he emphasized, “can be very impactful on what physicians are able to accomplish in their practices.”