It is now time for physician practices to get revenue cycles in order to improve financial performance. The entire process is complex in nature and often results in errors that negatively affect an organization’s profit margin. 

1. Coding and Billing: Time to go Deeper
By Carlos Arias, MD, MPH, CPC
It is now time for physician practices to get revenue cycles in order to improve financial
performance. The healthcare revenue process involves scheduling, registration, case
management, clinical charge processing, medical records, billing, payment posting, and
revenue recovery. The entire process is complex in nature and often results in errors
that negatively affect an organization’s profit margin.
There are slight differences between Revenue Cycle Management in Fee for Service
Practices and Managed Care Contracted Practices, but usually organizations have a
payer mix, so it will be appropriate to discuss the traditional Cycle for any organization.
(Graphic 1)
There are many times that I have seen every step of the process compromised,
affecting the revenue and the quality of the process: wrong patient information;
mismatches from insurance cards vs. patient IDs; not checking eligibility; not
interpreting benefits; no collection of copayments, coinsurance and deductibles; not
working the denials and appeals process; bad reporting; etc.
Every step of the cycle needs to be carefully analyzed and have processes in place to
both decrease waste and increase quality. The combination of these two concepts is
key to maximizing revenue. According to experts in the topic, the implementation of
ICD-10 will lead to an increase of denials anywhere from 100 -200%, and days in
accounts receivable (A/R) could grow 20-40%.
I believe that healthcare organizations should take a proactive approach. We must
establish benchmarks to monitor financial performance and implement strategies to
achieve an optimal financial outcome.
We must also identify operational inefficiencies by eliminating extra work and prevent
loss of revenue via sloppy documentation (i.e. demographics not entered correctly,
improper documentation and codification, eligibility and benefits not checked correctly).
To keep the revenue cycle on track, it is important to establish benchmarks. For
example:
Productivity: Coder and physician productivity as well quality metrics are important
indicators to watch in Fee for Service or Managed Care practices. E/M coding profile
enhances a provider’s productivity with education. E/M coding profile by provider (FFS)
(Graphic 2)
Clinical Documentation: The number of physician’s queries, query response time and
coder accuracy are indicators that will help to improve wasted time and unnecessary re-
coding. Incomplete notes also tremendously impact the cycle.

2. Billing Operations: Organizations should watch denials and rejections count by
category (e.g. Medical Necessity, LCD, Eligibility, Credentialing Issues and Prior
Authorizations). Pending claims, first pass rates, number of pending claims and third
party rejections should be measured and monitored.
A/R: A/R days by payer and A/R days over 120 days are indicators that allow
organizations to identify if claims are being paid in a timely manner.
Using benchmarks, we should be able to see where our revenue is today and how it will
change in the future, avoiding disruptions in the cash flow and enhancing revenue. It will
also improve performance in providers and coders, increasing efficiency and lowering
costs.
Some important Tips:
Denials: Identify your most common denials and look for trends. Is documentation
appropriate, compliant and sufficient? Are codes accurate and complete? What patterns
do we see emerging, and why?
Improvement in coding staff: Some organizations are including a coder in the
scheduling department or maximize the training on the “scheduling and front desk staff,”
so they can ensure that the correct and complete code is obtained during the pre-
certification process. This can help combat medical necessity denials and ensure
accuracy from the start of the registration process.
Plan ahead for cash reserves: Consider the fact that denials or delays in the short-
term are bound to occur, but we do not know for how long. An organization needs to be
able to cover their expenses for at least three months--and ideally six months--after the
implementation of ICD-10, in the event that payments are delayed or come to a
complete halt.
Continuous education: facilitating a continuous education for providers and coders will
improve clinical documentation, accuracy and compliance.
Some example benchmarks to compare:
A/R Primary Care Multispecialty
31 to 60 days 12.75 % 13.84 %
61 to 90 days 6.6 % 7.17 %
91 to 120 days 4.87 % 5.46 %
121 + days 21.64 % 17.98 %

3. Adjusteddays 58.48 % 69.92 %
Gross days in AR 35.81 % 37.51 %
Source: http://www.mgma.com/industry-data/all-data-resources/benchmarking-
tools-from-mgma-surveys
Graphic 1 Revenue Cycle Management
Graphic 2 EvaluationandManagementcodingprofile byprovider
Source: http://www.aapc.com/searchresults.aspx?cx=013123128296090130124:39ivq3vq7nk&cof=FORID:11&q=revenue%20cycle%20benchmarks&sa=Search