By Lynn Labarta SimiTree VP, Revenue Cycle Management
To be successful, home health and hospice agencies must generate revenue. However, that is only part of the puzzle in building your business. Just as important is collecting the revenue your agency produces while minimizing leakage and possible lost dollars.
As your agency grows, it becomes more difficult to manage your cash flow and keep your billing processes organized and efficient. If your billing cycle isn’t planned to scale, you can expect common issues like claim rejections and denials, poor collection rates, and eventually, lost revenue.
That’s why it’s vital to use experienced staff, a billing service that specializes in home health and hospice, and proven workflows to ensure your agency continues to be financially healthy as it looks ahead.
Here are four strategies to help you scale your home health RCM:
1. Standardize your processes.
Having clear assignment of responsibilities for each step of the billing process is critical. This is especially true if you have multiple people in your billing department or maybe even part-time staff dealing with billing functions. Submitting a claim is just one step in a series of many that ultimately lead to getting paid or not. So, consistency is crucial.
Your processes for submitting Home Health Notices of Admission (NOAs) or Hospice Notices of Election (NOEs), Finals or Sequential claims, collections and posting payments should be broken down and follow a standard workflow. This also means that a specific person or team needs to take responsibility for each step in this process and should also be enforced across all locations.
2. Prioritize accuracy & efficiency
The RCM process is very detailed and involves complex payer requirements so make sure you have the right experienced staff invoicing in home health RCM.
You may need to ensure you are conducting staff trainings regularly, since Medicare and commercial insurance regulations change frequently. This means your whole team needs to be familiar with any changes in payer requirements. Having a set frequency for staff in-services will save you a lot of headaches as you expand.
Follow these tips below to optimize your cash flow—and even increase your revenue:
- Perform all billing electronically
- Goal should be to maximize time spent resolving claim denials
- Set follow-up dates for outstanding claims based on payer processing time
- Develop denials tracking system to allow for issue quantification
- Collections notes should include enough detail that someone unfamiliar with the case would understand progress
- Maximize electronic cash posting
- Perform cash reconciliation weekly at a minimum
3. Develop a payer matrix
As your business expands, your billing and collections process must expand with it. Having a detailed payer matrix is one of the keys to scale your RCM along with your agency. As you grow, you will most likely not only care for more patients, but also bill different insurance payers with different payer rules. At minimum, consider having these key metrics on your payer Excel sheet:
- Initial and subsequent timely filing limits
- Authorization rules
- Link to payer portal and phone number
- Payer portal capabilities
- Available levels of appeal
- Any unique payer intelligence
- Reference to payer contract
Ideally, having a detailed payer matrix will house important billing-related information for each insurance company. This information is crucial to ensuring the claims get billed correctly and eventually paid. It will also be a life saver when there is any staff turnover or a need to backfill for work overloads.
3. Key Performance Indicators (KPI)
One of the most common mistakes that we see agencies of all sizes make is not tracking trends in their home health RCM processes. Identifying these patterns can make or break agencies, especially as they grow.
So, if you start tracking your most common claim rejections, you can find solutions to address the root causes of those mistakes before they start affecting your bottom line.
Additionally, tracking KPIs common in our industry will give you insight on whether you are ready to expand.
Here are a few KPIs that some of the top home health and hospice providers watch very closely:
- Accounts Receivable (A/R)
- Medicare aged over 90 days = <10%
- Non-Medicare aged over 90 days = <20%
- Total A/R aged over 90 days = <15%
- Unbilled Claims
- <10% of unbilled DOS aged over 30 Days
- Medicare final claims held over 30 days negatively impacts cash flow
- Track/trend by held reasons (unsigned Orders, F2F, Visits, etc.)
- Days Sales Outstanding (DSO)
- Medicare = 25-30 Days
- Non-Medicare = 55-60 Days
- Total = 45-50 Days
- Clean Claim Percentage
- Billed and paid without rejections/denials
- Audit payor EMR payor setup or clearinghouse to fix reoccurring rejections/denials
Oversight of your billing and collections processes, although challenging, is a necessary part of a successful RCM process and, really, the central piece to get to the route of claims issue and ultimately grow your business.
You can set up all the processes in the world, but if you don’t have oversight, you’ll just be spinning your wheels with no clear direction for growth.
The dictionary describes oversight as “watchful care” ... I love that description. It’s about taking care and nurturing of all the processes you but in place to grow.
Here are some tips to consider when thinking about oversight of your home health RCM:
- Working Supervisor vs. Department Manager . It’s important to understand the differences in these positions. Managers have a significantly broader focus in the company outside their department. Supervisors have a more internal focused responsibility for implementing the manager's decisions through the work of the staff they are supervising.
- Quality Analysis (QA) Review
- Ensures staff is receiving consistent feedback on actions taken and collections tracking
- Weekly Account Strategy
- Prioritize by timely filing and highest balance
- Place larger focus on problem payors
- Accountability and Productivity Standards
- Medicare: 50 accounts worked per day
- Non-Medicare: 30 accounts worked per day
When a home health or hospice agency grows from an increase in census or adding multiple branches, it enters a whole new world. So, if you’re ready to take that next step, be sure your billing and collections process is ready to shine!