3 Revenue Cycle Management Mistakes to Avoid

Quality of care is the first and most important focus for any home health agency. Unfortunately, offering best-in-class care is not enough to keep agencies financially stable.

Financial issues can arise for a variety of reasons, from losing patients to competitive agencies to not receiving reimbursement for services in a timely manner. Home health agencies experiencing financial struggles quickly come to realize that, after quality of care, revenue cycle management is the second most important focus for their businesses.

When putting in place revenue cycle management systems and processes, a good place to start is identifying common mistakes and learning to avoid them. With that, here are a few mistakes that home health agencies are encouraged to pay particularly close attention to:

1. Not Being More Proactive About Referral Management

Home health agencies often fail to track and analyze referral data. Without visibility over referrals, agencies don’t have the insight they need to measurably impact the one area of their business responsible for driving growth.

A great example is in the area of inquiry calls. Many agencies simply don’t track them. The causes of this oversight vary. Perhaps the agency doesn’t provide a particular service, so the rep never notes the call or the reasons why the patient could not be accepted. Or, it boils down to simple forgetfulness or ease of tracking. If there is no system in place for tracking inquiries, the rep may not be logging calls of any type, whether they convert to a patient admission or not. Tracking and following up on inquiries helps provide a full picture of conversion rates—not tracking creates missed opportunities on several fronts.

First, it becomes impossible to identify referral issues that could be addressed with better communication or process changes. For instance, perhaps those people calling about services your agency doesn’t offer are coming from one or two referral sources. This is the type of insight that opens the door to more meaningful conversations with partners to ensure they have a full grasp of your services and are sending the right types of patients.

Referral tracking can also help identify new areas of growth (and revenue) for an agency. If a majority of non-converting inquiries are around a specific care need, this could be an opportunity for an agency to specialize in serving a specific patient population.

Without referral tracking, an agency could experience significant referral leakage, that is losing prospective patients to another agency. That agency may not even know this or, if it does, it may not be able to identify why people are choosing another agency.

Part of the issue comes down to the fact that many referrals are still handled through spreadsheets and paper-based processes. These methods are time consuming, error prone and make it virtually impossible to accurately log referrals and gain the insight needed to position an agency for long-term success.

Referral management technology can help eliminate these manual processes, and capture and analyze the data. It is also important to consider how referral data can be used to monitor and motivate the team for success. Consider implementing data-driven programs that can move the needle on partner relationships, and then reward staff efforts accordingly.

2. Failing to Track the Clinical Data that Affects Payment

Many home health agencies have issues with getting paid in a timely manner or receiving reimbursement that is commensurate with the quantity of services provided.

There is no silver bullet for solving these types of payment problems, but more often than not, they are related to clinical documentation issues that don’t come up until billing, when claims are delayed or rejected due to errors or incomplete information. Not only does this impact cash flow and reimbursement, it can raise red flags to CMS that result in audits and fines. Ultimately, it can lead to lower ratings on Home Health Compare, the comparison website for Medicare-certified home health agencies. Since consumers pay attention to these ratings when choosing a home health agency, losing a five-star rating could have a severe impact on your business.

No agency wants this, so it is crucial to treat billing and clinical documentation as a single integrated function—not as separate silos. Start with streamlining the quality assurance (QA) process and supporting your clinicians at the point of care.

Educating clinicians on the proper completion of Outcome and Assessment Information Set (OASIS) forms is extremely important for recouping dollars that will help keep your business open. If QA has to keep going back to the nurse to make corrections, it will hold up your agency’s days to RAP (Request for Anticipated Payment), which holds up the cash flow needed to pay staff and provide services. EMR systems can support these processes by providing built-in guardrails that guide clinicians to complete patient assessments and require them to document against the care plan. This will result in documentation that accurately reflects the patient’s health, minimizes the potential for errors and ensures compliance from the very start.

Additionally, how nurses fill out the OASIS form directly impacts the level of reimbursement. OASIS scores are used to determine payment and, as such, represent an opportunity to boost revenue and better support the patient. Helping clinicians understand how to answer these questions should be a top priority. Many agencies do not focus on the education piece, and this can result in nurses filling out forms the same way for every patient. EMR systems can help by guiding nurses through the questions and offering recommendations based on evidence-based clinical content on the best course of treatment for individual needs.

3. Not Using Data to Make Smarter Financial Decisions

Even in cases where agencies have robust systems in place for tracking clinical data, they can fail to analyze data in ways that could improve decision making, and their bottom lines.

Using data to drive business decisions has not typically been a hallmark of homecare, but that is rapidly changing with greater scrutiny, rising health care costs and new regulations that focus on outcomes data. Home health agencies need to go beyond simply “reporting” on metrics to leveraging the wealth of clinical, financial and operational data available to boost productivity, revenue and quality of care.

For example, by looking at the patient case mix and understanding the statistical significance of the calculations, agencies can take a more proactive role in managing clinician resources, determining the appropriate compensation levels and implementing just the right level of care that will provide optimal outcomes and reimbursement levels.

Tracking health trends in patient populations, such as rehospitalization rates, can help agencies identify issues and prevent readmissions, which not only affects the agency, but also referring physicians and hospitals that are subject to penalties for higher-than-expected readmission rates. Agencies that use data to minimize these risks will go a long way toward improving patient care, avoiding penalties and increasing referrals.

The Bottom Line

These revenue cycle management mistakes are all too common and avoidable. It is time for agencies to take advantage of the great data available at their fingertips to realize the financial gains that will help them drive growth and become the agency of choice. Agencies that embrace data will certainly put themselves at a competitive advantage.