University Orthopedics Center’s Recipe for Revenue and Collection Success

Updated on May 12, 2016

By Joseph Myers


Revenue cycle management (RCM) is one of the most critical processes for a healthcare organization. Because the revenue cycle directly affects cash flow, it is often considered the lifeblood of a business.

For RCM to be successful, highly trained and experienced staff are essential. Staff must be very knowledgeable of the ins and outs of billing and stay current on rapidly changing state and federal government regulations. Proactively managing every item is a difficult and time-consuming challenge that requires much diligence. Without adequate staff in place, the process quickly can become overwhelming. This is often the case for healthcare organizations that rely on internal staff to manage RCM processes. Inconsistencies with internal billing staff and limited knowledge is a common problem for many ambulatory surgery centers (ASCs) and a primary cause of RCM disruptions. This was a challenge faced by the University Orthopedics Center (UOC).

For years, UOC’s ASC relied on an internal team to manage billing. A two-year phase of staffing inconsistencies resulted in revenue peaks and valleys from month to month. The center was under-achieving on many benchmarks it used to evaluate department performance including days to bill (DTB), days in accounts receivable (AR), and net collections. It was clear; something had to change.

In search of a more reliable approach, outsourced RCM services quickly became an appealing option. A third-party company offered expertise and best practice strategies for billing and handling denials. In addition to providing the much-needed knowledge of billing policies, the billing company staff are trained to look for trends and patterns concerning payer-specific denials. Most importantly, an outsourced billing partner was able to provide the consistent staffing necessary to get benchmarks back to the desired level.

Partner Success

The partner implementation took approximately 90 days and finished in September 2014. Since initiated, UOC has realized significant revenue cycle improvements including:

  • Decreased DTB. The faster a claim is submitted to the insurance company, the shorter the time to receive payment. This critical step in the revenue cycle requires well-defined workflows with daily, weekly and monthly measurement to ensure results are in line with expectations. Working with our outsourced partner, the average days to bill decreased by 50 percent.
  • Reduced AR Days. The longer a claim is outstanding, the less likely it is to be paid – and providers need to receive payment for services as quickly as possible. Over a six month period, UOC’s days in AR were reduced by over a third; AR over 90 days decreased from 41 percent to 26 percent.
  • Increased Revenue. Overall collection efficiency has improved, with the net collections percentage growing by more than 60 percent over a five-month period. The result? More revenue that UOC can invest in things like new capital equipment, technologies, staff and services to better serve patients.

The partner’s staff expertise, including in-depth knowledge of the revenue cycle and coding requirements for Medicare and other regulations, played a key role in the achievements attained. Perhaps the biggest reason for UOC’s RCM success was the persistent follow-up on outstanding claims and diligent follow-through to resolve denials. UOC’s outsourced billing partner, SourceMed Revenue Cycle Services (RCS), has excelled at ensuring timely claims processing and quick resolution of discrepancies, resulting in a positive impact on revenue.

Key Considerations when Selecting a Partner

When working with an outsourced billing partner, it is important to get the necessary processes, policies, and procedures in place and fully transition your information to the partner team at the start. With upfront diligence, there should be no declines in revenue or hiccups in claims going out during the transition. For other healthcare organizations considering outsourcing as a way to regain control over billing and collections, advance research is essential to find the right revenue cycle services billing partner. The following lessons learned are a great place to start:

Know Your Needs. One of the keys to successfully outsourcing billing services is the ability to accurately assess an organization’s challenges and needs, and convey them to the service provider.  The vendor you select should work as a partner to understand your expectations and immediate requirements. When collaboration is a priority, significant results can be achieved.

Experience Matters. Inquire about what processes the vendor has in place to stay current on state and local requirements. Ask about staff longevity and turnover.

One Size Does Not Fit All

There are significant differences between hospitals, outpatient departments, physician care practices and ASCs. It is important to select a billing company that is extremely well versed in your particular area. For example, in the ASC industry, processes are typically a little different. Medicare bills differently, documentation requirements are different, reimbursements are different, and coding is different. 

Pick a Partner

Remember, you are not just choosing a vendor, but a partner. Do your research and get to know the people with whom you will be working. In-person briefings whenever possible are a great start. Ask to speak with current clients. This will give you a feel for the team. Inquire about how easy they are to work with, responsiveness, knowledge and professionalism. 

A streamlined revenue cycle means processing bills more quickly, which results in faster payments. With the right partner in place, billing success can be achieved. With revenue cycle management challenges behind UOC, we can now focus on expanding the services we provide to patients, particularly in the areas of same-day total joint replacements and outpatient spine surgery.

Joseph Myers, is VP of Surgical Services at University Orthopedics Center (UOC) located in State College, PA.

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