How To Reduce Revenue Leakage In Your Medical Practice

Revenue leakage in healthcare refers to unwarranted or unrequested outflows of money as a result of fraud, overbilling, incorrect coding, or other errors. Slowly but surely, it eats away at profits like water running down a leaky faucet. Not identifying and addressing the problem of revenue leakage as soon as possible can lead to significant losses for healthcare organizations.

Revenue leakage is estimated to have a financial impact of between 3-10% on healthcare spending. The bottom line of a healthcare organization is likely to suffer as a result of this. Without strong internal controls, healthcare providers are at risk of significant financial losses due to revenue leakage. It is therefore essential for healthcare providers to monitor and proactively address any potential revenue leakage in order to protect their profits.

Reasons for Healthcare Revenue Leakage 

The healthcare industry is heavily plagued by revenue leakage, a worrying reality that leads to significant financial losses and decreased quality of care. Although revenue leakage may have a wide range of causes, incorrect coding, inaccuracies in billing, and uncollected copayments are the most common culprits that lead to leaks in healthcare revenue. 

Among the most common causes of healthcare revenue leakage are:

• Coding errors: Inaccuracies in billing and uncollected copayments can result from insufficient patient follow-up and, if left unchecked, can add up over time.

• Claims denial: Revenue leakage can also result from claims denials caused by incorrect data entry, outdated patient information, and incorrect authorization.

• Inaccurate patient data: Inaccurate data can lead to inaccurate billing or missed revenue opportunities, thus leading to leaks in healthcare revenue.

• Delayed billing: Delays in billing can lead to lost revenue opportunities or untimely payments from payers that may lead to unpaid balances in the future.

• Inefficient processes: Revenue cycle processes that are inefficient can result in delays in claim processing and payment, leading to a revenue leak.

• Undercharging: There can be both intentional and unintentional undercharging of services that directly impacts their revenue stream.

• Overhead costs: For healthcare organizations that operate with a high administrative overhead, revenue leakage may be a consequence.

• Patient no-shows and cancellations: When patients don’t show up for appointments or cancel at the last minute, healthcare providers lose revenue.

• Out-of-network referrals: Some providers may refer their patients to providers out of their network, which results in a loss of revenue for them.

 

There can be revenue leakage at any point in the revenue cycle, but billing and collection are perhaps the most common instances. It is very crucial for healthcare providers to come up with strategies to protect patient data and billing information so that revenue  leakage can be prevented. 

Keeping Healthcare Leakage at Bay with Outsourcing

By outsourcing, healthcare providers can gain access to specialized expertise, increase operational efficiency, and lower administrative costs – all while better protecting patient data and billing information.  This, in turn, allows healthcare providers to reduce their risk of revenue leakage and maintain their focus on delivering the highest quality of care for their patients.

Outsourcing can be beneficial to your practice in several ways, as follows:

1. Efficient Management of the Revenue Cycle 

Identifying and addressing revenue leakage issues can be accomplished more quickly by outsourcing revenue cycle management (RCM). RCM experts with experience in billing systems, claim denial reduction and collection rate improvement can all be an advantage to your practice to boost revenue and maximize profits. 

2. More Accurate Medical Coding and Billing

The accuracy of medical billing and coding is absolutely essential to prevent revenue leakage in the medical industry. Floating out these functions to specialized service providers can minimize the likelihood of claims being undercoded or overcoded because specialized service providers will ensure that the claims are coded correctly, submitted timely, and paid in full, thus reducing the chances that payments are delayed or incomplete.

3. A Better Insight into Processes through Data Analytics

Onboarding an outsourced team to keep tabs on the financial stream of your practice through data analytics can help with identifying the potential factors that can contribute to revenue leakage, including inefficient billing processes, a high denial rate, or the vulnerability of your practice to insurance coverage gaps. Using data analysis as a tool, providers will be able to make more informed decisions regarding their revenue cycle management and ensure that leakages are prevented.

4. Expert Assistance with administrative functions

Having an outsourced team of experts to take care of administrative tasks like maintaining IT infrastructure, setting up appointments, patient answering on call and chat, and maintaining a record system can allow providers to focus on providing patient care. Aside from reducing administrative costs, letting experts handle administrative work can improve patient satisfaction and reduce revenue leaks. 

Providers may benefit from outsourcing billing and coding, revenue cycle management, and administrative tasks in order to reduce the amount of time and effort they spend on these tasks, allowing them to focus on providing quality patient care. Additionally, they provide providers with advanced analytics and reporting tools that assist them in making informed decisions and improving the financial performance of their practices.

Wrap-up

How well you handle the processes that trigger revenue leakage in your medical practice is key to getting it under control. Capline’s healthcare billing experts can help your practice maintain a more efficient billing process and reduce the chances of revenue leakage. Not only can we at Capline help you reduce revenue leakage, but we can also equip you with the resources and tools to capitalize on new revenue streams.