Creating a healthy and stable revenue cycle is critical for medical organizations of all shapes and sizes. Medical practices and health systems benefit from examining every step of their revenue cycle and finding ways to improve their processes to get paid faster.
Medical coding is a vital and complicated aspect of the revenue cycle that, when performed incorrectly, can create unwanted negative repercussions on your bottom line.
Receiving proper reimbursements is almost entirely dependent on accurate medical coding. Yet, some organizations neglect it altogether.
Ensuring the accuracy of your organization’s medical coding can create immediate and lasting positive impacts on your revenue cycle.
Here are five ways how.
1. Fewer denied claims
Denied claims have become an increasingly significant issue and deterrent to healthy revenue cycles. Reportedly, denial management costs hospitals roughly $262 billion per year and costs medical practices upwards of $20 billion per year in delayed or lost reimbursements.
Accurately capturing services rendered to patients through coding leads to proper reimbursement. Without accurate coding, these claims of rendered services are denied or delayed.
Not to mention, the healthcare coding industry is facing new, complex challenges due to evolving payment requirements and guidelines, such as payor-specific coding schemes designed to trigger denials.
And when you consider that 68% of hospital denials (by dollar value) are due to incorrect coding, it’s clear that ensuring accuracy to prevent denials should be at the forefront of any organization’s administrative team.
2. Easier revenue forecasting
Accurate and compliant medical coding creates a domino effect that trickles down into every facet of the revenue cycle, including the ability to forecast future profits correctly.
When organizations can analyze accurate data on costs, write-offs, and reimbursements, they can better predict and anticipate their financial future.
Once that information is analyzed, they can make more informed business decisions around staffing, patient outreach, products, and services without hurting their bottom line.
3. Improved payment velocity and cash flow
Better denial management, fewer denied claims, and fewer billing days in A/R help organizations improve their payment velocity and cash flow.
The median turnaround time for coding is 4.1 days. If teams could turn coding around in minutes instead of days, they could address potential denial flags, addendums, or documentation updates immediately—and with better detail.
Not to mention, the collections process is very time-consuming. Employing the help of a medical coding automation company that ensures accuracy relieves this time-intensive burden.
With more time in the day, organizations can focus on identifying and implementing other improvements (not just in your billing/coding sector) that’ll streamline and optimize the revenue cycle and flow of payments.
4. Ensure proper reimbursements
Beyond denied claims, inaccurate coding can lead to missing charges, resulting in lost revenue for your organization. Payors can’t reimburse you for services you didn't capture in the first place!
Employee fatigue plays a huge role in these occurrences. A coder likely combs through hundreds of pages of medical records each day, inevitably leading to inaccuracies and missed codes, causing revenue to “fall through the cracks.”
To combat fatigue and ensure proper reimbursement for services, many organizations utilize solutions such as medical coding automation services or full-service coding to take some of the load off of their busy team.
5. Financially protect your organization
Medical coding inaccuracies can lead to negative legal ramifications and potentially costing organizations hefty fines and legal fees.
If a coding error compromised a patient's care, they could file a malpractice lawsuit. And with the introduction of the No Surprises Act, organizations can receive fines if a coding error results in a patient receiving a “surprise” medical bill.
If you file an incorrect claim to the government (Medicare and Medicaid), it could violate the Federal Civil False Claims Act (FCA). These violations can lead to organizations potentially paying up to three times the amount of damages sustained by the government, plus penalties up to $22,927. In addition, incorrect claims can result in a $10-$50K fine from the Office of Inspector General.
Accurate medical coding stops these violations from ever occurring and thus, helps organizations avoid detrimental financial ramifications and protect their revenue cycle.
Positively impact your revenue cycle
Create and nurture a healthy and stable revenue cycle through accurate medical coding.
Fathom’s services can reduce the total cost of your coding operations by up to 70% and seamlessly integrate into your existing workflows.
Looking to boost your revenue with a new approach to coding accuracy? Schedule a consultation.
Photo: Deva Darshan