What are the most common errors in revenue cycle management, and how can software help?

Revenue cycle management (RCM) is the process of managing the financial aspects of healthcare delivery, from patient registration to payment collection. It involves multiple steps, such as coding, billing, claim submission, denial management, and reporting. However, RCM is prone to errors that can affect the quality of care, patient satisfaction, and revenue generation. In this article, we will discuss some of the most common errors in RCM, and how software can help to prevent or correct them.

1 Coding errors

Coding errors occur when the medical services or procedures performed by the providers are not accurately or completely documented and translated into codes for billing and reimbursement purposes. Coding errors can lead to undercoding, overcoding, or unbundling, which can result in claim denials, audits, fines, or lost revenue. Software can help to reduce coding errors by providing tools for electronic health records (EHRs), computer-assisted coding (CAC), and coding validation. EHRs can capture and store clinical data in a standardized format, CAC can automate the generation of codes based on the documentation, and coding validation can check the codes for accuracy and compliance before submitting the claims.

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2 Billing errors

Billing errors occur when the charges for the services or procedures are not correctly or timely generated and sent to the payers or patients. Billing errors can lead to incorrect or missing charges, duplicate or overlapping claims, or inaccurate or outdated payer information. Billing errors can cause payment delays, rejections, or underpayments, which can affect the cash flow and profitability of the healthcare organization. Software can help to prevent billing errors by providing tools for charge capture, charge entry, claim scrubbing, and claim tracking. Charge capture can ensure that all the services or procedures are recorded and billed, charge entry can verify that the charges match the codes and contracts, claim scrubbing can identify and correct any errors or discrepancies in the claims, and claim tracking can monitor the status and follow-up of the claims.

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3 Denial errors

Denial errors occur when the claims are rejected or partially paid by the payers due to various reasons, such as eligibility issues, authorization issues, coding issues, billing issues, or policy changes. Denial errors can result in lost or reduced revenue, increased administrative costs, and lower patient satisfaction. Software can help to resolve denial errors by providing tools for denial analysis, denial prevention, and denial appeal. Denial analysis can help to identify the root causes and patterns of the denials, denial prevention can help to implement best practices and strategies to avoid the denials, and denial appeal can help to submit and manage the appeal process.

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4 Reporting errors

Reporting errors occur when the data and information related to the RCM process are not accurately or timely collected, analyzed, and presented. Reporting errors can affect the decision-making, performance improvement, and compliance of the healthcare organization. Software can help to eliminate reporting errors by providing tools for data integration, data visualization, and data analytics. Data integration can help to consolidate and standardize the data from different sources and systems, data visualization can help to display and communicate the data in a clear and interactive way, and data analytics can help to extract and interpret the data for insights and recommendations.

Software can be a powerful ally for healthcare organizations to improve their RCM process and outcomes. By using software to automate, validate, and optimize the RCM steps, healthcare organizations can reduce errors, increase efficiency, and enhance revenue. However, software is not a magic solution that can solve all the RCM challenges. Software needs to be integrated with the existing workflows, systems, and staff, and customized to the specific needs and goals of each healthcare organization. Software also needs to be updated and maintained to keep up with the changing regulations, standards, and technologies. Therefore, healthcare organizations should carefully evaluate and select the software that best suits their RCM requirements and expectations.

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5 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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Dr. Nadeem Ahmed

Forbes 30u30 | DOH - Chairman's Office | Ex-McKinsey - Gen-AI use cases, Health Systems | Harvard Public Health Review - Managing Editor | Global 100 Leader - Oxford GLC, St. Gallen Symposium, Peter Drucker Forum
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Common errors in revenue cycle management include incorrect patient data entry, undercoding or overcoding claims, and inadequate follow-up on denied claims. Software can help by automating data entry and reducing human error. AI-driven coding assistance can ensure accuracy in medical coding, minimizing overcoding and undercoding. Additionally, software with denial management features can flag denied claims, track reasons for denials, and prompt timely follow-up actions. Integrating advanced analytics can identify patterns in denials, enabling proactive measures to prevent future errors. This technological intervention streamlines the process, enhances accuracy, and improves financial outcomes for healthcare providers.

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Lisa Neefe

Healthcare Revenue Cycle Consultant | Queen of Denials Prevention
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There are dozens of ways that errors can be created and perpetuated within the lifecycle of a claim. All of them track back to either speed or accuracy. The optimal software will use multiple strategies in rules-based error prevention, detection and correction. The trick is learning and evolving processes to use those strategies in concert with one another. Automated correction is not always optimal, and prevention can cause user fatigue.

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What are the most common errors in revenue cycle management, and how can software help?

1

2

3

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5

1 Coding errors

2 Billing errors

3 Denial errors

4 Reporting errors

5 Here’s what else to consider

Healthcare

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What are the most common errors in revenue cycle management, and how can software help?

1

2

3

4

5

1 Coding errors

2 Billing errors

3 Denial errors

4 Reporting errors

5 Here’s what else to consider

Healthcare

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