According to a report by the American Hospital Association (AHA), overall hospital expenses increased by 17.5% between 2019 and 2022. Healthcare systems across the U.S. have been plagued by rising supply and labor costs. In response, organizations of all sizes are revisiting their revenue cycles to uncover and eliminate inefficiencies.
A revenue cycle audit holds the key to financial stability and adequate cash flow. Our revenue cycle audit checklist will outline how you can conduct this valuable analysis and learn more about your organization’s fiscal health.
A revenue cycle audit involves a comprehensive evaluation of your healthcare organization’s financial processes. You will uncover insights about patient registration, payment collection, and other key steps in the revenue journey during the healthcare audit.
The goal is to uncover useful information about cash flow and the journey from patient intake to bill payment. A revenue cycle audit can help you identify ways to reduce losses and increase revenue. By periodically performing a revenue cycle audit, you can improve cash flow and minimize the risk of compliance issues.
According to a report by the American Hospital Association (AHA), overall hospital expenses increased by 17.5% between 2019 and 2022. Healthcare systems across the U.S. have been plagued by rising supply and labor costs. In response, organizations of all sizes are revisiting their revenue cycles to uncover and eliminate inefficiencies.
A revenue cycle audit holds the key to financial stability and adequate cash flow. Our revenue cycle audit checklist will outline how you can conduct this valuable analysis and learn more about your organization’s fiscal health.
Here are the five primary steps involved in a revenue cycle audit:
The first step to an audit involves evaluating your registration processes. You must capture critical patient information during the initial point of contact, including personal details and insurance coverage.
Your auditors should conduct a thorough review of current patient registration workflows as well. If there are gaps in your collection processes, explore potential ways to remedy them.
Incomplete or incorrect data can lead to claim denials down the line. These denials can cost your business valuable time and resources, even if you ultimately recoup most of the money during appeals.
Accurate medical coding and billing are crucial for ensuring timely and correct payments. Payers will deny claims if key details are missing or your team enters the wrong billing codes. Something as minor as an incorrect use of abbreviations in medical billing can also lead to overpayment or underpayment.
Your auditors need to thoroughly examine current coding practices and follow the latest guidelines. It’s important that you analyze whether your billing team is adhering to established best practices and company policy.
After you’ve identified weaknesses in your coding and billing processes, explore methods for making them more efficient. Introducing automation technologies can simplify the data entry process, saving time and reducing the risk of human error.
Denials and rejections are a major source of lost revenue that you must address. A revenue cycle audit will reveal how many denials you are receiving and help determine the cause of those rejections.
Focus on identifying and fixing simple issues first. Claims that get denied due to missing information or incorrect coding should be a red flag that something in your process needs to be changed.
Payer contracts are the backbone of your revenue cycle. Outdated contracts or unfavorable terms can lead to reduced revenue. If you are underpaid by insurers, you could be losing out on thousands, if not millions, of dollars in revenue.
A revenue cycle audit is a great tool for consolidating reimbursement data and gaining insights into current contracts. Compare your findings to industry standards and identify areas where your organization might be under-compensated. Be prepared to renegotiate contracts with your payers to reflect the true cost of the services you provide.
The final step in your revenue cycle audit involves evaluating your payment collection processes, both from insurers and patients. You need to be billing payers and patients in a timely manner. Delayed collections practices can disrupt cash flow and hurt your organization’s financial stability.
Review the efficiency of your collections team. Are payments from insurers being followed up on promptly? Are you collecting patient balances efficiently? Consider implementing automated reminders, patient payment portals, and other tools to streamline the collection process.
Automating portions of your revenue cycle audit can save time and reduce the risk of human error. The Rivet Health Revenue Diagnostics platform can streamline your audit process and pinpoint areas for improvement. It provides reliable forecasts, which you can use to promote long-term business continuity and profitability.
Integrating automated tools into your revenue cycle allows your organization to perform audits more efficiently and gives you access to actionable data. You need to maintain real-time visibility into the revenue cycle, and technologies like revenue diagnostics help you do exactly that.
Be aware of the following when performing a revenue cycle audit:
Without clear guidelines or regular training, coding practices can become a major pain point for your organization. These shortcomings can lead to higher denial rates and lost revenue opportunities.
You should always enter payer negotiations with audit data in hand. Use the insights you’ve gathered to support requests for rate increases and ensure that your contracts accurately reflect your costs of doing business.
Claim denial patterns are a major red flag. Say that you have a 30% denial rate on a common procedure. This trend indicates an inconsistency between your staff’s practices and the payer’s coding requirements. You need to identify the root cause of the issue to reduce the frequency of claim denials and reclaim lost revenue.
An internal audit represents the first step in improving revenue cycle management. However, you need the right tools to unlock the potential of your data and shed light on key segments of the revenue cycle. Enter Rivet Health.
Our revenue diagnostics solution delivers reliable, timely revenue forecasting capabilities that you can trust. Schedule a demo to learn more.
