As a business, you want to get paid for the costs of your services immediately. When comes to healthcare, especially in behavioral health, it gets a bit trickier.
You’re no longer getting paid directly by the person who is directly benefiting from the service. So you not only have to keep track of all the costs for this third party but you have to prove to them that they owe that amount.
Insurers are looking for any reason to deny your claim. The reasons can range from minor errors to a lack of data.
With an ineffective revenue cycle, you can begin to struggle financially. Getting paid less than your expenses, and late payments can begin to impact your bottom line.
So how can you improve your behavioral health revenue cycle?
In this guide we will discuss:
- What is behavioral health revenue cycle management?
- The 9 steps to revenue cycle management
- Pros and cons of outsourcing billing
- Top three reasons for claim denial
- How software can help optimize your revenue cycle management
Let’s dive in!
What Is Behavioral Health Revenue Cycle Management?
Revenue cycle management (RCM) is all about identifying, collecting, and managing your organization’s revenue. This involves using your management systems with medical billing systems to pull together information.
Behavioral healthcare RCM is complex because it involves the person served, providers, and payers.
Previously, behavioral health treatment centers would solely rely on self-pay for their revenue. Insurance companies did not pay for anything. As more payers began to cover more services making the revenue cycle more complicated.
9 Steps Of The Revenue Cycle
Knowing the steps of the behavioral healthcare revenue cycle can help you optimize your process and get more money back in your company’s pockets.
Create Behavioral Health Payment Policies
Creating policies is a great way to lay out a roadmap and guidelines for payments. You can discuss:
- How long do self-pay patients have to pay
- What kinds of payments do you accept
- Consequences of nonpayment
- What happens if there are no-shows
This helps both the person served and internal team members have complete transparency.
After the appointment has been made and before any care is provided check the eligibility and insurance coverage of the person you are serving. This ensures everyone understands how much will be out-of-pocket and can reduce non-payments.
During intake capture a copy of the person served information including insurance card and credit card information. Be sure to remain transparent and communicate that it will be kept on file.
Once benefits are checked and care has been delivered, the provider will assign the clinical services charges in a centralized system. Having a full understanding of what contributes to claim denial can help ensure charge capture success.
While as medical professionals we want to heal the people we serve free of charge, it’s also important to remember that you are still a business and need to make money to continue serving people.
At the same time as the charge capture the provider can also match charges to their ICD codes. This tends to be the step that has the most issues leading to claim rejections.
Billing codes and regulations are constantly changing. Small mistakes like over or under-coding can cause denial because the claim doesn’t match up with the services.
Claims are submitted by the behavioral health provider to the insurer. Before you submit anything you want to do an internal review. This keeps you from having to deal with the long and costly denial process later on.
While claims can be submitted manually by contacting them software can streamline the process. Electronic health records (EHRs) can scrub claims and check for missing or incorrect information.
Then the insurance company reviews the claim and determines if the service the person served received is covered under their plan and medically necessary.
They will provide Remittance Advice that gives their reasoning for why the claims were denied. This is attached to your reimbursement if your claim is approved. The Remittance Reporting gives a list of what was and wasn’t paid.
Once the insurer has reviewed and accepted the claim the provider bills the person served. Most of your revenue will be coming from reimbursement but there is still the amount you need to get from the people you serve who are private pay.
Before the Affordable Care Act, private insurance did not pay for many behavioral health services like drug rehab. Now these private companies pay the person served directly with the reimbursement checks, not the treatment center adding an extra step in collections.
You will want to keep a close eye on the results of your claims. This can be done with an EHR or claims processing software.
If they have been approved you want to make sure all payments are received. When the claim is denied you will want to quickly correct and resubmit the claim.
Reimbursement is not simple, especially for behavioral health treatment so you can expect to get several claim denials. The key is being able to appeal these denials.
When writing your appeal letter for insurance companies you want to include all updated correct information, why you believe their assessment is wrong, and any additional details they will need of the treatment to explain why it was necessary.
Outsourcing Vs In-House Billing Pros And Cons
Outsourcing your behavioral health billing can help you in many ways. RCM is still relatively new for behavioral health providers and not every one many companies do not have the training and resources needed to do it correctly and efficiently.
Outsourcing to third parties who have experience in behavioral health revenue cycle management (RCM) can help increase reimbursements. Plus it saves you time to focus on the people you serve.
On the other hand not any RCM specialist will do. They need experience in the complex behavioral healthcare space. You’re also working with a lot of confidential information and need to be sure you are working with people you trust.
Main Reasons For Claims Denial
So why do behavioral treatment centers see denial claims? There can be many reasons from small manual errors to larger process inefficiencies.
The top reasons for claim denials are:
- Providers lack proper credentials
- Claims were not perfectly clean when sent off for payment
- Billing was not specified in the payor contract
So what can you do to decrease denials and ensure more reimbursements? Use technology.
How Software Can Help Revenue Cycle Management
As technology advances your behavioral health organization needs to learn how to leverage it. While it can be intimidating having to restructure some processes to adapt to new systems, in the long run, you will see increased efficiency and a decrease in claims denials.
As we mentioned earlier one of the main reasons for claim denials is that there is an error in the claim. Small mistakes like a typo in the billing code or on the persons served information.
Scrubbing claims with software can clean your claims of any errors before submitting them.
Using billing software can come with remittance reporting tools that help you to better analyze the reports. Doing your claim through software allows you to get Electronic Remittance Advice (ERA) so you don’t have to wait for the mail and can settle denials faster.
Electronic Eligibility Verification
To make sure you get paid the right amount you need to ensure you are only providing services that they are eligible for. Billing software gives you automated electronic eligibility verification to check coverage instantly.
This saves you time chasing down information or the possible loss of revenue from false assumptions.
The best way to optimize your revenue cycle and reduce denial rates is to fully assess your current process and past claims. Billing software has reporting tools that compile all data to ensure you have a clear picture of your revenue cycle.
With these reports, you can review why your claims get denied, pinpointing weaknesses and opportunities.
If a denial occurs you want to act fast. As soon as you get the remittance advice you need to correct the claim and resubmit your denial appeal within a specific timeframe.
While your business may be okay financially waiting on one reimbursement, it can quickly add up. Billing software can help you track claims and denials so you can respond and see cash flow sooner.
The use of software also aids in tracking payer requirements so you don’t miss any deadlines and can get your reimbursement.
- Create Careful Contracts – When creating contracts with payors it is important to clarify what services they will be covering to help reduce denials down the road.
- Consistently Track Claims – Continuously follow up until reimbursement of claims is shown in your account.
- Leverage Billing Software – Technology can improve productivity leaving you more time to focus on delivering quality care. Research the best EHR software for your center.
- Diversify Payor Networks – Having a payer mix ensures you will always be able to negotiate rates and ensure positive cash flow if one is continuously denying claims.
Get Help With Revenue Cycle Management From C4 Behavioral Health Consulting
Revenue cycle management can maximize the productivity of your behavioral health organization. It can reduce the frustrations of the person you serve from payment complications, improving patient management and satisfaction. Additionally, RCM reduces claim denials leading to fewer out-of-pocket expenses.
Get expert revenue cycle alignment and optimization with our C4 financial consultants. They can help you strengthen every step in your behavioral health revenue cycle management, increasing the clarity, accuracy, and precision of your payor claims and reimbursements for an optimized revenue flow, growing your bottom line.
We have the experience and tools to help you step up your RCM. Request a free consultation to see how we can help you.