According to the American Medical Association, physicians who switch to electronic claims processing can dramatically reduce the cost of submitting claims from as much as 14 percent of revenue to roughly one percent.
With the MGMA estimating that U.S. medical practices are, on average, failing to collect 25 percent of the money they’re owed for treating patients, you can’t afford to reduce expenses by using electronic claims processing and other e-billing tools.
Power Your Practice understands the financial challenges medical practices are facing and is here to help. Every week during our A/R Best Practices series, we’re describing the must-have features managers need to look for in practice management systems to manage and collect all of their receivables.
Electronic Processes Can Automate the Revenue Cycle
One key element of an efficient, hassle-free revenue cycle is payment accuracy, so practices need ways to ensure their claims are being accurately paid in full.
One method is accepting electronic remittance advice messages (ERAs) from insurance companies. An ERA is a standard report that can be read by a computer system detailing payments made.
Choosing a system that accepts ERAs allows practices to cross-examine those payment details against payer contracts, so the practice can make sure it’s collecting according to its contracts.
Likewise, choosing a system with the ability to post denials makes it easier to track, measure, and manage them – that helps make sure more denials are resolved and makes it easier to gather data to prevent more denials in the future.
The best systems also automatically post lost or ignored claims based on the practice’s daily aging of receivables.
These features impact practices by:
1. Increasing collections – Electronic remittances help practices make sure they’re receiving what their payer contracts say they’re owed. And automatically posting denials and ignored claims helps keep better track of unpaid claims so each issue can be resolved.
2. Improving efficiency – Automating these parts of the revenue cycle eliminates manual work and decreases the likelihood of data entry errors, which can add even more hassles to the process.
3. Getting practices paid faster – Converting more parts of the payment cycle into automated electronic processes helps practices drastically improve their DSO (days sales outstanding) metrics.
How do you accept remittance advice?
Next week, we’ll point out eight advanced collection features that can vastly improve practice workflow and efficiency.
