Ask most behavioral health facility owners how much revenue they are leaving on the table, and you’ll likely be met with a shrug. That’s not because they don’t care but rather because lost revenue is often difficult to quantify. It doesn’t come up neatly on a financial statement. Instead, it’s found in denied claims that were appealed, payments that came in a little short, and services rendered that never got billed
The answer to “How much revenue is being left on the table” is always going to be facility specific. However, experience shows that it’s usually more than leadership realizes. Let’s look at some of the places where revenue goes astray and begin the conversation about getting it back.
Small Leaks Make Big Pits
Revenue loss rarely comes in one neat stream. Instead, it’s more often a series of small leaks that add up over time.
An example would be something like this: A behavioral health facility has a monthly revenue of about $500,000 a month. If just 3% of that slips away through unworked denials, underpayments, and missed charges, that’s $15,000. Over the course of a year, that is $180,000. This could mean the difference between making payroll or falling short, launching a new program or putting it on hold, or simply having a financial cushion when things get tight.
Now apply a number like 5% or 8% to the stream we just looked at. For many facilities, it’s entirely possible to regularly be losing revenue in increments such as this.
Denials That Never Get Worked
Every behavioral health facility has denied claims. The question is about what happens to them after the fact. With stretched resources, denied claims and appeals sometimes get put on the back burner until the point when they are too late to do anything about them. In many cases, denied claims can actually be recovered through proper denial management and a claims appeals process.
Payments That Come in Short
When it comes to revenue being left on the table, few things are as easy to miss as underpaid claims. These are payments that should have been made at the contracted rate but came in short, causing the facility to lose revenue.
Recovering that money requires identifying payments that fall below the contracted rate for the service provided. In many cases, this means reviewing claims individually, and most facilities simply do not have the time or resources to handle that level of follow-up on their own.
Services Rendered but Never Billed
This one surprises a lot of facilities. However, it’s not unusual for a treatment facility to render a service and simply fail to bill for it. For example, group sessions that were held, case management services that took place, or add-on codes that should have been applied never make it onto a claim for a variety of reasons, usually at the intersection between clinical and billing.
When documentation does not reflect services that were provided, or when billing and coding staff miss opportunities to bill for services that were rendered, revenue is lost.
Undercoding as a Matter of Policy
For some facilities, the issue is less about revenue being left on the table and more about avoiding unnecessary payer scrutiny. In an effort to make sure that their documentation matches their billing, some facilities routinely undercode in order to avoid getting audited. While this might work once in a while, when it comes to large scale billing practices, chronic undercoding ends up costing facilities money since they are not getting paid the amount they are due.
Credentialing and Authorization Issues
When clinicians begin working at a facility before they are credentialed, or when authorizations lapse, services rendered during this time period cannot be billed. Similarly, when utilization review fails to take place, treatment days lapse into unbilled time.
While these are issues that touch on billing, they are really more about the nuts and bolts of a facility’s day-to-day operations. Either way, lost revenue streams such as these can have a major impact on a facility’s finances.
Patient Balances that Are Not Collected
With deductibles and coinsurance on the rise, patient balances are becoming an increasingly important part of the revenue cycle for treatment facilities. When a facility does not verify benefits, explain balances, or follow through with collections, it can severely impact the amount of revenue collected. If patients are unable to pay these balances, they end up being written off.
How to Discover Lost Revenue Streams
The only way that a facility can determine how much revenue it’s leaving on the table is by diving into its data and taking a close look at its denials, payments, coding, and aging A/R reports. This information tells them where revenue is being lost and how much of it can be recovered.
That’s essentially the point of our free forensic assessment. In fact, we review your claims history and revenue cycle to uncover lost revenue, identify what may still be recoverable, and advise you on how to prevent similar issues in the future.
Stop Leaving Revenue on the Table
When it comes to facility finances, nobody wants to leave revenue on the table. At Integrity Billing, we understand the unique challenges facing treatment facilities and have experts on staff that focus exclusively on billing, credentialing, utilization review, denial management, and appeals in the field of behavioral health. Contact Integrity Billing today at 888-368-7461 to discover how much revenue your facility could potentially recover.