Many hospitals and health systems are facing revenue shortages that threaten their resources and financial stability. External market forces can contribute to shortages, but some shortages stem from internal disorganization and a lack of oversight. An efficient charge reconciliation process can boost revenue, and it is something you can control.
Revenue can suffer without efficient coordination, especially in your accounting and clinical departments. Missed revenue targets can affect care quality and decrease patient satisfaction. They can also create poor working conditions, which can lead to low staff retention.
In an Ingenius Med survey of healthcare executives, 78% said that effective charge capture was essential to organizational success. Yet 40% of their organizations addressed it once a month or less. A majority said that up to 20% of their charges were incorrectly coded.
Inefficiencies, technology integration issues, lack of adherence to procedures, compliance problems, and coding errors. Coding departments, for example, can waste substantial time tracking down missing information from physicians.
Let’s take a look at the dynamics of charge reconciliation for a better understanding of the important role it plays in the healthcare revenue cycle.
What is charge reconciliation?
Also called revenue reconciliation, charge reconciliation is the process of comparing the cost of healthcare services delivered against the amount charged. These services can include hospital management, healthcare monitoring and improvement, and medical record-keeping.
So, how does charge reconciliation work?
The charge reconciliation process
Your healthcare team must have extensive expertise in accounting and a solid understanding of clinical operations to run an effective charge reconciliation sheet. Ideally, your accounting and clinical departments work together as accountability partners. A problem in one department often results in a problem for all — and can ultimately lead to inaccurate charge reconciliation data.
Charging occurs in the clinical departments, but patient accounting acts as the gatekeeper. This coordinated partnership requires a joint effort toward the common goal of accurate charges, identification and resolution of any discrepancies, and signed documentation indicating completion. In addition, the timing of each phase of the process is crucial. Prompt review is critical to ensure the accuracy of charges in a rapidly changing healthcare environment.
The two departments manage various functions that need constant monitoring and evaluation. Let’s discuss each department and its roles.
Accounting involves the counting and recording of information for analysis and evaluation. Roles and responsibilities include the following:
- Recording and verifying patient information and charges
- Accounting for charges stored in clinical software for collecting and displaying health information — for example, the Electronic Medical Record (EMR)
- Computing costs from patient accounting applications that track finances, such as payments from insurance companies
- Acknowledging completion of the accounting process via signed documents
A professional experienced with charge-related questions should be available during these accounting processes to reduce mistakes and inefficiencies.
Clinical health departments provide medical diagnoses and charge patients for services. These professionals maintain up-to-date lists of medical costs to minimize charge-related mistakes.
How charge reconciliation impacts the healthcare revenue cycle
Strive to conduct your charge reconciliation daily to reduce overload and decrease the chances of missing entries — which can harm your bottom line. A 2019 survey revealed that less than a third of respondents said their organization captures charges within 24 hours. A charge lag can significantly delay all the steps that follow and ultimately push reimbursement beyond payers’ allowable dates, resulting in underpayments or denials.
Benefits of a well-balanced charge reconciliation sheet
Timely charge reconciliation can help in the following ways:
- It identifies issues like underpayment, insurance denials, and pending bills. If left unchecked, these issues can create revenue shortages for hospitals and health systems.
- It clearly shows your organization’s top-performing revenue-generating departments, enabling the prioritization of those departments while you work to improve the revenue of your other departments.
- It can facilitate the timely detection of system failures. You can then update your charge reconciliation system just in time to avoid losses in revenue — for example, a failure to update automatic payments correctly can prevent those payments from coming in.
- It provides organizational insights to streamline your work processes, empowering you to achieve efficiency and grow revenue.
- It builds a team that’s accountable and organized, which is crucial for the success and sustainability of your organization. It also enables your team to come up with solutions to problems in a conducive work environment with top-down support from leaders.
With timely charge reconciliation, you can track and record your revenue generation over time, enabling you to more accurately interpret your current revenue trajectory and future outlook.
Questions to ask about your charge reconciliation process
When evaluating your charge reconciliation process, here are some of the metrics Nordic recommends watching:
- Track volumes to monitor charges coming through from providers.
- Check provider workflows to make sure all charge steps are correctly followed, including those of any independent providers affiliated with your organization.
- Double-check the logic behind automated system actions to ensure they are still valid and working to trigger the appropriate charges.
- Look for additional automation opportunities to reduce manual interventions.
- Look for operational changes that might be contributing to lower revenue, such as charge changes for certain services.
- Review reports to ensure they highlight missed charges and benchmark performance.
How to support best practices in revenue cycle management
By now, you’ll probably agree that an effective revenue reconciliation platform is crucial for your growth in the healthcare industry. By frequently updating your charge reconciliation software, you can spot issues in advance and implement strategies to maximize your bottom line.
Additionally, making sure your employees have the right education is crucial. Ensure that every member of your revenue cycle management team is performing with current knowledge and best practices.
A well-educated team understands cross-dependencies and what it takes to complete the cycle efficiently and with as few errors as possible. An investment in education will pay off in more reliable revenue recapture and enhanced stability and growth for your healthcare organization.
About our partnership with Revenue Cycle Coding Strategies
Relias partnered with Revenue Cycle Coding Strategies (RCCS) to offer resources to ensure that your organization’s medical coding is compliant and to help optimize your revenue cycle. In addition to quality online courses from Relias to invest in your staff’s coding education, RCCS offers a variety of outsourced solutions including coding audits, documentation reviews, coding professionals, and expert resources.
About Revenue Cycle Coding Strategies
Revenue Cycle Coding Strategies has provided specialty medical coding, revenue cycle, and compliance consulting services, as well as educational and training materials to the healthcare industry for over 20 years. RCCS has an extensive team of specialized coding experts and industry leaders who create and implement customized revenue cycle solutions, including billing auditing and assessments, compliance reviews, in-depth process mapping, and customized outsourced options.
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