January 9, 2023
8 minute read
Revenue Cycle Management

Revenue Integrity in Healthcare: Benefits and Best Practices

Rex H.
Rex H.
Blog Hero Background GraphicBlog Hero Background Graphic
Table of Contents
Table of Contents

Revenue integrity is an emerging field that allows healthcare organizations to ensure they're being properly reimbursed for services while remaining compliant with all applicable laws and regulations. Optimizing your revenue integrity efforts will help your practice provide high-quality healthcare and positive patient experiences.

{{toc}}

What is revenue integrity?

Revenue integrity involves developing and implementing efficient and effective scalable processes and internal controls at every step of the patient journey, designed to eliminate revenue leakage and compliance risks. Revenue integrity procedures must be supported by proper documentation and conducted with solid financial practices that can withstand extensive auditing.

The key responsibilities of revenue integrity

Revenue integrity is a challenging, complex undertaking that encompasses comprehensive measures in accounts receivable, audits, and education. A strong infrastructure is vital to the success of revenue integrity initiatives and must include the following key responsibilities.

Accounts receivable management

Monitoring your AR data will help you identify revenue-leaking trends to determine underlying causes and address them. Unbilled charges and aging accounts in AR can indicate problems with billing and claims. Unearthing trends in these problems will help you create proactive solutions.

Tracking and monitoring claims

Monitoring claims and tracking problem claims should be a core function of a revenue integrity program. Handling claims issues within the RI department reduces the number of times claims change hands, which adds to processing time and confusion. However, this function is underutilized by many RI teams. A survey by the National Association of Healthcare Revenue Integrity (NAHRI) found that only 55% of revenue integrity departments were responsible for claim edits.

Your RI program can provide invaluable data that can highlight issues that might otherwise go unnoticed through tracking and monitoring claims. Tracking claim edits related to the chargemaster is particularly valuable to RI since 80% of RI departments are responsible for chargemaster maintenance. Correctly identifying claim edits that directly stem from the chargemaster lets you quickly correct the source and eliminates repetitive claim edits. Other key metrics that provide valuable RI data include:

  • The volume of accounts delayed by edits
  • Pre and post-bill edits that require clinical or coding review
  • Claims that require a return to the provider because of issues with CPT, HCPCS, or revenue codes
  • Specific payor requirements that can be automated to eliminate manual intervention
  • Denials caused by medical necessity

Reporting

Report your findings so the appropriate departments can address them. Department leaders can use the reports to implement plans to improve performance and measure progress.

Auditing

Auditing is another area where many RI programs are missing opportunities. NAHRI's survey showed that only 42% of RI departments are responsible for performing internal audits and compliance checks. Since RI is closely tied to compliance standards, this should be a function of all RI programs. Audits will not only help your department root out revenue leaks and target areas for improvement, but they will also identify compliance risks. Elements of a robust audit plan include:

  • A schedule of comprehensive auditing activities, including charge capture and compliance audits
  • Feedback based on audit results that measure progress
  • Action plans that incorporate feedback into improvement initiatives

Education

Education is another vital function of hospital revenue integrity programs that should be a higher priority. Only half of RI integrity departments are responsible for education related to revenue cycle integrity, which is down from 62% in 2018. When revenue-generating departments are less involved with RI, it leads to gaps in knowledge that cause inefficient procedures and standards that reduce productivity and revenue.

Educational programs should be a cornerstone of all RI departments and include measures such as:

  • Identification of knowledge gaps in revenue-generating departments
  • Training plans and coursework to correct knowledge gaps
  • Enlisting subject matter experts to provide education when knowledge gaps are found or when regulations change
  • Objectives for educational content mastery and metrics for progress

How common is revenue integrity as an established function?

Although most healthcare facilities recognize the value of revenue integrity, with 70% dedicating staff to RI and 61% having a RI department, only 33% have RI programs. Even fewer — a mere 22% — have revenue integrity committees to oversee RI efforts.

These statistics show that while directors understand that RI is a crucial function of revenue cycle management, few know how to fully implement a comprehensive RI program. Many healthcare leaders are missing out on opportunities to optimize revenue cycle operations and financial outcomes by establishing a RI program.  

Why and how you should start a revenue integrity department

Many healthcare facilities struggle to implement technological advances in revenue integrity to their full benefit. However, those that do are at a significant advantage. A survey by the Healthcare Financial Management Association found that healthcare organizations with established revenue integrity programs realized the following benefits:

  • Increased overall net collection by 68%
  • Increased gross revenue capture by 61%
  • Decreased compliance risks by 61%

Additionally, Proventi found that healthcare organizations with revenue integrity functions experienced revenue leakage below 2% of net revenue, while those without experienced revenue leakage above 2%. This difference was largely the result of avoidable write-offs from denials that a robust RI program could have prevented.

Claim denials have increased more than 20% over the past five years, with one-third of hospital executives reporting claim denial rates as high as 10%. However, better revenue integrity measures could prevent as many as 90% of claim denials. While these statistics are alarming, this state of affairs presents a tremendous opportunity for revenue integrity departments to mitigate leakage.

The ways a revenue integrity function improves your practice

When you implement a robust revenue integrity function in your practice, you can expect to see the following benefits:

  • Decrease in the age of AR accounts
  • Less unbilled time in AR
  • Fewer claim handoffs
  • Fewer claims requiring manual intervention
  • Increased focus on high-return follow-ups
  • Expedited cash flow through more efficient handling of claim edits and denials
  • Fewer repetitive claim edits and denials due to tracking and correction
  • More accurate charge capturing
  • Targeted action plans and education based on identified need
  • Continuous improvement of revenue cycle processes and procedures through education and progress monitoring

How to start a revenue integrity department

Revenue integrity is a fairly new discipline, so standardized education and resources are difficult to find. Fortunately, revenue integrity functions draw on many established practices, so it's not a completely uncharted endeavor. Your revenue integrity department should be tailored to your organization's specific needs, which your RI functions will help you uncover. However, all effective revenue integrity programs will be comprehensive endeavors that encompass monitoring and analyzing trends in billing edits and charge captures, compliance auditing, and ongoing education.

Perform a current-state assessment

Assessing your current state will provide a road map for building your RI program and a baseline to measure progress. Start by dedicating a point person to lead your efforts. A revenue integrity department manager should have expertise in compliance, clinical documentation, coding, and a strong understanding of the relationship between codes and revenue in reimbursement.

Your initial assessment can be a rubric that lists all essential revenue integrity functions. Document the staff assigned to perform each function, the departments that oversee the staff, and the resources allocated to that function. This rubric will help you see which functions can be consolidated, which need more resources, and which are missing.

Build your team

While smaller practices may be able to get by with one person serving as the touchpoint for revenue cycle, compliance, and clinical departments, revenue integrity is a complex practice. It will benefit from a team approach that includes people who have expertise and skills in:

  • Quality assurance
  • Data analytics
  • Regulatory guidelines and changes
  • Clinical operations
  • Billing workflows
  • Internal auditing
  • Interdepartmental communication

Creating a team with a broad skill set in revenue opportunity and risk will help break down the silos in your organization and ensure alignment of all revenue-generating departments. With a centralized flow of information, it's easier to root out and address common themes that may otherwise be fragmented within separate departments.

Your newly formed RI department will require a restructuring of established teams. The functions you identified in your rubric will now fall under the purview of the revenue integrity department rather than the billing department.

Establish an action plan

Although your initial revenue integrity functions will be based on your initial assessment, a value-generating RI department will continuously monitor, assess, and improve. Effective communication across various departments is necessary for a successful RI initiative. Your RI department will generate a tremendous amount of data, so the first step in effective communication is narrowing down the message. Identify the top three or four issues that will have the most impact based on audit results, charge data, and remit data.

Based on this data, identify improvement opportunities in revenue opportunities, billing anomalies, or coding risks. Communicate these priorities to the relevant department leaders and create an educational action plan for improvement. Next, work with department leaders and subject matter experts to provide instructional materials.

Measure improvement

You'll only know if your revenue integrity strategy is successful if you measure relevant benchmarks. Although most healthcare organizations already measure their billing department performance, these measurements alone don't allow you to understand the underlying factors that may negatively affect your revenue. Your revenue integrity department will compare charge data against other data sets, enabling you to understand whether your performance meets industry standards and if there are atypical patterns that need further exploration.

Benchmarking will help you find opportunities for increasing revenue, identify risks associated with under or overcoding, and share insights with other departments. Comprehensive benchmarks should compare your current performance to your historical performance and industry standards. When you find discrepancies, work to uncover the root cause. Slicing your results by provider, coder, specialty, or facility can give clues to the dysfunction or bottleneck. Once you discover the underlying issue, you can provide appropriate education to remediate it. You can significantly increase revenue and decrease compliance risks through repeated education and auditing cycles.

The five best practices for revenue integrity in 2023

Revenue integrity is a complex topic that can offer seemingly endless opportunities for improvement. To simplify the process and focus your efforts on areas that typically have the biggest impact, start by implementing five best practices.

Automating denial and underpayment management

Denial and underpayment management is a well-established practice in revenue cycle management, so you may not see this as breaking new ground. It has been a traditional tool for improving coding, monitoring front-end practices, and negotiating payer contracts — all of which are solid benefits for every organization. But it's often overlooked as an opportunity to provide insight into clinical operations, contract design, and patient experiences, which are key factors in value-based contacts.

Effective automated denial and underpayment management strategies should go beyond dealing with denied claims. Denial and underpayment management should start with preventing denials and end with strategies for eliminating denials in the future. Automating processes should include pre-denial management, post-denial management, and insightful reporting.

Pre-denial management

Pre-denial management begins with automating workflows that ensure all typical causes for denials have been accounted for and routed to corrective action. This includes corrective workflows such as:

  • Duplicate billing errors
  • Incorrect patient demographics
  • Missing patient information
  • Incorrect CPT modifiers
  • Pre-authorization where required
  • Verifying insurance eligibility

Post-denial management

After denial, you can prioritize recovery efforts and minimize future denials by automating the following workflows:

  • Prioritize denials by data to avoid late claim denials
  • Sort denials to determine which represent the best opportunity for quick revenue recovery
  • Bulk appeal denials with the same payer and the same cause of denial
  • Route complex bills into separate review processes by trained billing managers

Reporting insights

Data analytics from your automated denial and underpayment management system can give you actionable steps to reduce denials in the future by identifying problems within your claims process. High-level analysis will:

  • Uncover trends in denials
  • Allow you to easily share your findings with front and middle-state revenue cycle teams to eliminate denials caused by processes upstream
  • Establish metrics to assess productivity

Have an ironclad audit process with strong documentation

Revenue integrity addresses risk and opportunity at every stage. One of your RI department's top priorities should be implementing a thorough auditing process backed by comprehensive documentation. Internal audits are a vital part of ensuring both compliance and optimal reimbursement.

Your auditing process should begin by focusing on high-risk and high-value areas. Improvements in these areas will generate the greatest return by improving patient satisfaction, reducing compliance risks, and increasing revenue.

Identify risk profile

Your first step in developing a strong auditing process will be identifying your risk profile. Your best option for identifying risk is the same data the government uses to detect fraud. If government agencies are scraping claim data to detect fraud, you should analyze your organization's claim data for the same patterns.

Your risk profile should provide specific, targeted areas of concern, such as write-off procedures, bad debt, or the aggressive resolution of denied claims. Once you've identified your risk profile, start the auditing process on the area of highest risk or highest value.

Design your audit

Your internal audit should include at least the following three elements.

Review process flow and design. Walk through each step of a transaction to determine if it's as efficient as possible. Analyze key controls to determine if they effectively mitigate risk or if there are blind spots you need to change. This should be a hands-on process rather than a review of established procedures so you can find any friction points where actual practice differs from the policy.

Data analysis and benchmarking. Standard KPIs for similar organizations provide a good starting point for measuring your performance. These metrics will help you focus on areas that are out of alignment with industry standards and are ripe for review. Some examples include:

  • Number of claims delayed by edits
  • Payment variances
  • Denial backlog
  • Missed filing deadlines

Regulatory compliance. Compliance risks should always be part of every audit. You'll need to ensure that any changes you make to your workflows don't trigger integrity issues.

Complying with the No Surprises Act and providing accurate good faith estimates

The No Surprises Act requires you to provide a good faith estimate to all uninsured or self-pay patients. It includes a patient-provider dispute resolution process for estimates that are significantly under the final bill. Additionally, there are penalties of up to $10,000 per violation for noncompliance. Because this is a fairly new regulation, ensuring compliance should be a high priority since it may require changes to your established workflows.

Using contract management software

Payer rules and requirements are constantly changing and updating. Contract management software is essential for adhering to payer agreements and catching or eliminating errors before they result in denials.

Going beyond and providing cost estimates for all patients

While the possible penalties of noncompliance with the No Surprises act are motivation enough to comply, there is an additional opportunity to provide cost estimates for all patients. You already have the procedures to provide a good faith estimate to uninsured or self-pay patients, so incorporating one into your workflow with all patients can be easily accomplished. For very little increased investment, you can build trust with all of your patients by providing price transparency and reap a few more benefits.

Increased revenue

Facilities that move to upfront estimates and collections can significantly increase overall collections. Patients are more willing to pay upfront because they understand precisely what they're paying for and aren't surprised by a bill they didn't expect. Accounts that are paid upfront will reduce your average time in AR and decrease unpaid debt.

Improve patient satisfaction

Your patients will feel like they have more control over their healthcare if they are informed about the expenses ahead of time. One of the reasons healthcare experiences can be so stressful is because of all the unknowns. Spelling out procedures, costs, and supplies demystifies some of the processes. This can be a welcome relief for patients whose insurance pays a significant portion of the expenses. Patients whose insurance doesn't cover their supplies or procedures will know how much they'll have to pay and can make informed decisions.

Fewer denials

When you provide an estimate for every patient, every time, you're less likely to experience denials based on changing payer regulations and coverage. Your patients avoid unpleasant surprises, and so do you. You'll also be able to provide your billing department with updated, accurate information based on current coverage.

Implement best practices and optimize revenue integrity with MD Clarity software

Revenue integrity programs can help healthcare practices and facilities maximize revenue, reduce risk exposure, and improve patient satisfaction. Because revenue integrity is a complicated endeavor with multiple stages, choosing the right tool for implementation is critical. Starting with an accurate, comprehensive solution will help you avoid problems with your revenue integrity functions down the line.

MD Clarity provides visibility into the entire revenue cycle and allows you to create action plans based on high-level data. You'll gain insights into how your revenue-generating departments are performing and can improve productivity and reduce errors by automating tasks. In one suite of tools you can detect underpayments from health plans, generate patient cost estimates that comply with the No Surprises Act, and track the performance of payer contracts.

Whether you're just launching your revenue integrity program or looking to improve existing efforts, MD Clarity can improve your financial performance and allow you to build trust with your patients through a transparent experience.

Improve your financial performance while providing a more transparent patient experience

Request Demo
Full Page Background