The Money Ball Effect

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Baseball Player

Revenue Cycle Management

By Scott C. Spradling, CMPE

In Moneyball, a 2011 baseball movie about the Oakland A’s, their manager Billy Beane tries to shake up the way players are chosen and played, in hopes of finding a winning combination while thinking outside the box.

He accomplishes this by getting players to score a base run. If everyone up to bat scores a base run, soon someone has to cross home plate and score. Full disclosure, that is also the sum total of my personal knowledge of baseball! However, the premise of the story makes me think about our very own “moneyball” in private practice, the revenue cycle. Most of us think of the revenue cycle as “claim goes out … money comes in,” much like how one might think baseball should work: “A player comes up to bat … player scores.” If only it were that easy, and if only we had to think about just those two simple things. To be honest, 85 percent of the time the “claims going out, money coming in” part happens almost automatically, and in today’s electronic climate, most of the time within the first 30 days. So what about the other 15 percent of the time? The answer to that lies in a deeper understanding of what truly comprises the whole of the revenue cycle.

In our moneyball lineup, the first player up to bat is the front office. We may call it by different names, but in its basic form, it is the first point of contact a new (or potential) patient has with your organization, and it’s the first opportunity to hit a line drive. Your front office plays a critical role in identifying any potential hiccups in this patient’s revenue cycle experience. Are your staff able to speak appropriately about the insurance plans you are able to take? Can they explain the difference between being in-network and out? Can they speak to the rules regarding direct access as it relates to your specific state? Are they able to identify the need for prior authorization or specific utilization management programs? Or, as has been witnessed even in my own clinic, do they simply say, “I’m sure we take your carrier; let’s just get you onto the schedule and we can work on all of that later.” Swing and a miss!

Next up is verifications and authorizations. If you are lucky enough to have a separate person (or department) that solely focuses on eligibility, benefits, and authorizations, well then, that is living well. And that extra 15 percent is right there for the taking. But hey, even if you aren’t that lucky and this is also a task of the front office, you’ve still got great odds. The key to this arduous task is never to think this plan is just like the last plan, even if they are from the same carrier and have the same alpha prefix. (Sidenote: If you ever truly want to appreciate your admin staff, spend an hour trying to do what they do when talking to, or trying to get information from an insurance carrier. And then go buy them a pizza.) There could always be a curve ball. Fortunately, we have several online and electronic tools we can utilize to get the most accurate and timely information available. This limits the phone calls to the more obscure carriers and plans. I urge that every new patient intake be verified and documented. Just because the patient told you over the phone, “Oh, yes, I have Medicare,” does not actually mean that they really do have Medicare. Turns out, when they walk into the clinic for that first eval and you go to make a copy of their Medicare card, you discover it’s actually a MedAdvantage HMO plan that you are not contracted with. Swing and a miss!

Next up to the plate is documentation. Now, since this is really an administration-focused article, I’ll quickly just say: Documentation is critical. More to the point, timely and accurate documentation that provides substantive support for medical necessity is an “intentional walk.”

As mentioned before, the heart of the revenue cycle is claims going out and money coming in. The real opportunity to improve your odds is known as “scrubbing,” when a claim is reviewed and anything that is wrong is addressed and fixed. That way the claim goes out as “clean” as possible. Scrubbing can occur in-house, at the point of the clearinghouse, or even at the point of entry to the insurance carrier (in the form of a rejection). All of these are opportunities to resubmit the claim and get it corrected quickly. As a sidenote, the sooner a rejected claim gets turned around, the better your odds. However, sometimes you don’t find out about the rejection until you get the Explanation of Benefit and Electronic Remittance Advice (EOB/ERA). EOB/ERA review and posting is hugely important, not for the 85 percent that are all green lighted and post without incident, but for those “foul balls.” Remember that if you’re learning about it from the EOB/ERA, it’s been at least 14 days if not more. Swing and a miss!

Rounding out our lineup, the heavy hitter, the swinger from Cincinnati, it’s accounts receivable, good ol’ A/R. Some people refer to this as billing and collections. Potato Potata. This is where most practices get hung up and lose the greatest potential for capturing any of that 15 percent. It’s detailed and time consuming. There is no easy “Hey look at me, I’m a claim they didn’t pay properly.” To make things worse, the clock is really ticking on this one—30 days, 60 days, 90 days … The key to good A/R management is being organized and touching it every single day. It’s not possible to simply review your A/R once or twice a month right before statements and month end. It has to be reviewed and “worked” every single day, hence the need for organization. All patient balances should be accurate (clean and tidy) and ready for statements, courtesy calls after 30 days, a gentle written reminder after 60 days, a more assertive communication after 90 days. After that, well, it’s collection time. Three strikes and you’re out. Hopefully it doesn’t come to that and you have procedures in place for payment plans and deferments. Now to the insurance balances, the “unclean” claims that you thought you scrubbed thoroughly, but “Hey, you missed a spot.” Front of the line, take action on those immediately. Document all action, all communication with the carriers, and pin a follow-up flag for no more than seven days. Every unpaid carrier claim in the 60- or 90-day column should have an action item noted on it. Do not rely on the carriers to do the follow-up; remember, you are the one who needs to get paid.

Unlike baseball, where eventually only one team gets to win the grand slam, with good revenue cycle management, everyone takes home a World Series trophy. No matter the size of your practice, whether you have several teams or one person wearing several hats, each phase along the revenue cycle brings you ample opportunity to hit a line drive. Attention to detail, organized standards of practice (especially among different staff and different locations), communication and documentation from one phase to another, and repetition and cross training to prevent errors. All of these things wind you up for a bases loaded, no outs, bottom of the ninth, grand slam home run!


Scott C. Spradling

Scott C. Spradling, CMPE, is the chief operating officer for Harada Physical Therapy on Whidbey Island in Washington. Scott serves as the chairperson of the APTA Private Practice Section’s Administrators Network. He can be reached at scott@haradapt.com.

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