The home infusion industry presents a complex landscape for billing, marked by high-cost drugs and narrow profit margins. To succeed in this demanding environment, providers need to establish a well-organized and efficient revenue cycle management (RCM) workflow. Effective navigation through the intricacies of RCM in the home infusion sector requires diligence, adaptability, and an in-depth understanding of the numerous factors that influence reimbursement.
With over 20 years of experience in revenue cycle management within the healthcare industry, I am offering insights into the seven critical areas where home infusion providers can improve their RCM processes. This guidance is aimed at ensuring financial stability while maintaining the provision of high-quality patient care.
Verifying Annual Benefits
The new year is a critical time for verifying patient benefits, including re-verification for ongoing patients. Ensuring that coverage details are current is essential to prevent reimbursement delays and denials, particularly important due to the high cost of specialty drugs. Some of these drugs are carved out benefits, requiring patients to use a specialty pharmacy. The re-verification process includes confirming details such as diagnosis and J codes of the drugs to ensure they are not carved-out benefits, thereby protecting providers from potential financial vulnerability.
Managing Prior Authorizations
Managing prior authorizations effectively is crucial in the revenue cycle, as missing these can lead to significant revenue losses. A robust system to manage and track these authorizations helps prevent reimbursement delays and denials. Regular follow-ups and re-verification of benefits are equally important, ensuring that services are pre-approved by payers and maintaining a steady flow of revenue. These practices are essential in minimizing the risk of financial losses and keeping the billing process smooth and efficient.
Staying Up-to-Date on Drug Pricing Trends
Specialty drugs, which are frequently high-priced, constitute a major component of home infusion therapy. It is important for providers to keep up-to-date with drug pricing trends to ensure accurate billing and reimbursement. Since drug prices can fluctuate, regularly updating your billing system with the latest prices each quarter is key for maintaining compliance and achieving accurate reimbursement. Additionally, performing thorough due diligence with Medicaid is crucial in avoiding issues related to coverage and reimbursement.
Navigating Medicare and Medicaid Compliance
Ensuring compliance with Medicare's complex requirements is essential. It's crucial to understand which drugs are covered and to adhere to specific billing protocols. Additionally, be aware that Medicaid plans can change monthly, potentially affecting drug and service coverage. Keeping abreast of these changes is vital for accurate billing. Regularly performing due diligence with Medicaid is also necessary to prevent issues related to coverage and reimbursement.
Understanding Patient Responsibility and Drug Reimbursement
For providers, knowing payer reimbursement rates for drugs is essential, as many insurance plans may not cover the full cost of purchasing drugs. This understanding becomes vital when evaluating referrals. For instance, if a health plan does not cover the purchase cost of specific drugs like IVIG, being aware of this can help avoid financial losses. Providers need to be familiar with reimbursement models, such as the Average Sales Price (ASP) plus an additional percentage, typically around 18% for Medicare. Medicaid often adopts a similar approach. If the cost of supplying a drug exceeds the sum of ASP and this percentage, accepting such plans may not be financially sustainable.
Additionally, managing patient responsibility is a key aspect of revenue cycle management. This process involves accurate and timely billing of patients, regular issuance of patient statements, and dedicated follow-up. Effective patient billing management is paramount, as it significantly impacts financial stability. Without rigorous follow-up, there's a risk of patient dues going uncollected, thus affecting the provider's financial health.
Adopting a Robust Billing System
Negotiating Effective Vendor Purchase Agreements
For home infusion providers, striking the right balance between cost and quality in vendor purchase agreements is critical to financial stability. Providers should assess the vendor's pricing against their budget and reimbursement rates, including any additional fees to ensure financial viability. Exploring cost-saving opportunities, such as volume discounts or alternative products, without sacrificing quality, can enhance profitability.
It's also vital to establish clear contractual terms covering payment, warranties, and return policies. Regularly monitoring vendor performance ensures adherence to quality and delivery standards, and open communication is essential for addressing any issues. Effective vendor agreements are crucial for optimizing the bottom line in home infusion revenue cycle management.
The Time to Take Action is Now
As we step into 2024, infusion pharmacy providers are presented with a prime opportunity to adopt these seven crucial strategies, enhancing their financial well-being. Such proactive measures enable them to concentrate more on their core mission – delivering outstanding patient care. This year, taking these strategic steps is not just about financial prudence; it’s about reinforcing the foundation that allows for exceptional healthcare delivery.
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Prochant is the only AI-driven reimbursement service provider in the home-based care industry. We deliver focused revenue cycle management (RCM) solutions to healthcare providers with 7 wholly-owned global delivery centers. Our expertise lies in providing end-to-end RCM for home-based care, infusion, and specialty pharmacies, consistently delivering exceptional results to some of the leading healthcare providers in the country. We harness specialized automation technology and deep industry knowledge to streamline the time-consuming and expensive reimbursement process. As a result, we help healthcare providers accelerate their collections, increase revenue, and reduce operational costs while managing risk. Prochant is HITRUST certified, the gold standard for HIPAA security. For more information, please visit prochant.com.