7 Ways to Stop Medical Practice Revenue Loss

Troubleshooting the billing process can be time consuming, aggravating, and cost your practice money in time and lost claims. Finetuning your medical revenue cycle management and addressing gaps may be tedious, but it’s necessary to the financial health of your business. From unclaimed reimbursements to increased staff costs driven by inefficiencies, a broken revenue cycle leads to lost revenue.

Despite improvements in technology and systems of record, recent surveys show that some aspects of RCM are no longer improving as much as a hopeful multiyear trend predicted. A 2024 Medical Group Management Association (MGMA) Stat poll reported that 60% of medical group leaders saw an increase in their practices’ claim denial rates for that year compared to the same period in 2023. Only 11% said their practices have decreased their claim denials compared to the previous year.

Another factor to consider when assessing revenue loss is prior authorizations. Rigid regulations often require an investment to achieve acceptable pre-authorization rates. An important question to ask: If a practice has a near perfect prior authorization approval rate, what was the staff cost to achieve such numbers?

Both unclaimed revenue and unnecessary cash flowing out can lead to losses that impact your bottom line. Let’s review seven ways to stop medical practice revenue loss.

Enhance Price Transparency

Providing patients with clear and transparent pricing information builds trust and helps them make informed financial decisions. With 66% of Americans with employer-based insurance underinsured due to high out-of-pocket costs, it’s crucial to be clear about the cost of services up front.

Clearly communicating expected costs allows patients to anticipate expenses, minimizing billing disputes and enhancing satisfaction.This transparency benefits both patients and physicians. It empowers individuals to plan for medical expenses and leads to more open financial relationships with providers.

Implement Rigorous Pre-Authorization Processes

Pre-verifying insurance details and confirming up-to-date coverage information before patient visits reduce claim denials by 23%, according to the MGMA. Using patient portals to collect insurance data streamlines this process, allowing patients to self-start for data confirmation prior to their visit and giving staff more agency to address issues proactively.

Ninety-two percent of physicians report care delays due to insurer approvals, according to the American Medical Association (AMA). Make sure to adjust your workflow to leverage your EHR system properly and train your team to understand which procedures need specific approval in advance. Assess your pre-authorization approval rates often and implement changes to benefit your entire medical practice ecosystem.

Implement Efficient Software Systems

Practices that operate on outdated software face higher claim denial rates. And even if you’ve implemented a more modern EHR, you should be intentional about how your protocols fit within the system to close gaps on revenue losses. Old and unintegrated systems create daily challenges, from difficulties in seamless data exchange to compromised data security and reduced patient satisfaction.

Auditing billing workflows regularly and ensuring staff receive continuous training on system updates can help mitigate revenue leakage. Additionally, integrating automated claim scrubbing tools can reduce errors before submission, improving reimbursement rates and financial stability.

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Maintain Credit Card Information Securely

Storing patient payment information securely facilitates prompt payment collection, especially for high-deductible health plans. This practice reduces the need for sending multiple statements and accelerates cash flow. Some analyses report that practices implementing card-on-file systems see a decrease measurable in days in accounts receivable.​

Optimize Front Desk Procedures

Training front desk staff to collect co-pays and outstanding balances during check-in enhances revenue capture. With access to real-time information from EHR systems, staff can inform patients of their financial responsibilities up front. It’s proven that point-of-service collections are a best practice and lead to improved medical practice revenue standings.​

Similarly, efficient check-out processes, supported by integrated EHR systems, ensure that all services are billed accurately before the patient leaves. This approach reduces the likelihood of missed charges and enhances patient satisfaction. Practices that streamline check-out procedures report higher collection rates and reduced billing errors.

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Prioritize Proper Coding

Coding errors are a chief culprit of claim denials and underpayment. These mistakes may take the form of incorrect diagnosis or procedure codes, and often stem from data entry mistakes or human bias.

Common coding errors include unbundling, upcoding, and using outdated codes. Undercoding, or reporting a lower-level procedure than actually performed, often results from documentation mistakes or audit concerns, and missed modifiers is another common source of error.

These mistakes contribute to significant financial losses and compliance risks for healthcare providers. Be certain to monitor your claim rejections due to coding errors daily, and implement the necessary training or workflow adjustments to pivot to a more efficient and profitable practice.

Identify and Address Revenue Leakage

Analyzing financial reports regularly to detect patterns of revenue loss is vital. When you can pinpoint if your practice has gaps due to coding errors, underpayments, or inefficiencies in billing processes, you can take action to remedy the situation and capture lost revenue.

A structured approach to medical revenue cycle management can prevent revenue leakage and optimize financial performance. Efforts to seal revenue drain could include training providers to perform more robust documentation, analysing your payer contracts, better tracking KPIs, and auditing the billing process. Identifying gaps is the first step to eliminating avoidable losses.

Protect Your Practice From Preventable Revenue Loss

Managing your medical practice revenue cycle effectively is essential for maintaining a financially healthy medical practice. While challenges like claim denials, prior authorization delays, and coding errors can lead to significant revenue loss, implementing proactive strategies can safeguard your bottom line.

By enhancing price transparency, leveraging efficient software, optimizing front desk procedures, and prioritizing proper coding, practices can reduce financial leakage. Regular audits and staff training as part of your medical revenue cycle management strategy can build your confidence that you’re capturing the appropriate reimbursements for the quality care you provide. Taking time to address revenue gaps today will help you achieve your practice goals tomorrow.