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How Revenue Cycle Automation Keeps A Physician-Owned Practice Open

Maintaining its independence is vital to the Clinics of North Texas, so the physician-owned practice turned to revenue cycle automation to optimize collections.

Jacqueline LaPointe
By
Published: 27 Jul 2023

Every penny counts when you are an independent physician-owned practice, according to Melissa Huff, CIO of the Clinics of North Texas.

Founded over 100 years ago, the Clinics of North Texas is a multispecialty network of more than 30 physicians and 200 employees. It is one of the largest independently owned group practices in the Texoma region. But every physician-owned practice’s independence is constantly at risk now.

The number of independent practices is dwindling. The American Medical Association (AMA) recently reported that less than half of physicians work in private practices, down from 60 percent about ten years ago. The data signals a shift from independent practice to hospital or health system employment, but it comes as no surprise to industry leaders.

 “You see mergers or acquisitions happening every day,” Huff says.

Hospitals and corporate entities acquired 36,200 physician practices between 2019 and 2021, according to an analysis published by the Physicians Advocacy Institute last year. What’s more, the majority of these practices were bought after the onset of COVID-19, underscoring the pandemic’s troubling impact on independent physician practices.

“That’s why it’s critical to collect every dime that we can possibly collect. We have to have the best processes in place to be able to stay independent,” Huff explains.

Huff turned to revenue cycle automation to streamline the group practice’s collection workflows and boost revenue by 20 percent in just one year, strengthening the practice’s position as a key provider in the region.

Deciding to automate

Like many business offices, the Clinics of North Texas relied on manual processes to collect payments.

“We were chasing pennies constantly and we still weren’t getting paid what we expected to get paid for certain claims,” Huff says, commenting on her experience taking over the business office several years ago.

A 2021 survey of healthcare CFOs and revenue cycle leaders found that about a third of hospitals and health systems did not use revenue cycle automation at the time. The percentage of organizations leveraging automation for revenue cycle management is on the rise, according to a later survey. But many mission-critical business office tasks are still performed manually, leading to workflow bottlenecks and other barriers to optimizing collections.

“We would try to go through the workflow to set up automation and hit a hiccup. But we simply did not have the time to work through it because we were still constantly chasing pennies, trying to collect everything we could to reduce our A/R days,” Huff says.

“It was a never-ending cycle until we found a partner that had the resources and ability to see automation through,” Huff adds.

The journey to revenue cycle automation was not straightforward, though. The Clinics of North Texas created an internal team to identify opportunities to optimize workflows with automation and vet revenue cycle management companies. After all, being an independent practice in Texas comes with unique challenges.

“One of our biggest challenges is keeping up with regulations, especially those in Texas,” Huff explains. “Also, payers are changing how they reimburse for things and some, all of a sudden, won’t allow certain CPT or diagnosis codes. We need to stay on top of those changes.”

The Clinics of North Texas needed a revenue cycle management company that understood its challenges and workflows, which is why the group practice went with a revenue cycle solution from its long-time EHR and practice management (PM) vendor.

Picking the right partner

When looking for a revenue cycle technology partner, providers have many options. Revenue cycle technology comes in many shapes and sizes depending on an organization’s challenges and opportunities. With such a fragmented market, providers must do their due diligence to select the right partner for their revenue cycle automation needs.

For the Clinics of North Texas, for example, understanding payer requirements for reimbursement, especially in Texas, was paramount. The group practice favored a revenue cycle automation solution with a rules engine built in, so if they receive a payment that varies from the agreed-upon fee schedule, the solution flags the improper payment for staff to investigate.

“We may have found those in the past, but it would’ve taken a lot longer for a human to notice it, especially when the payment might be a couple of cents off,” Huff states. “It may not seem like a major difference, but all those cents add up based on payer size.”

In addition to a rules engine, the Clinics of North Texas sought a solution that could at least attempt to automate most major business office processes. Automation capabilities were a top consideration for the group practice, which needed to eliminate bottlenecks and streamline workflows for timely collections. Automation could also allow the group practice to reduce expenses by decreasing its large business office team.

But ultimately, Huff says they chose the vendor for revenue cycle automation because of “their ability to simply have a conversation with us.”

“We have an open line of communication with their team, so if they see something—and it might not necessarily be with us, but with other clients—they bring it to our attention,” Huff adds. “We also weren’t reinventing the wheel with them since we already had their product in place.”

EHR integration can boost the success of revenue cycle technology implementations. With integration, the technologies can talk to each other, reducing the number of systems staff need to use to collect payments and ensuring the revenue cycle solution has all the data it requires to function properly.

“Let the technology work for you instead of fighting against technology,” Huff says.

Ongoing success

A year after implementing the revenue cycle management solution, Huff noticed a significant improvement in the group practice’s financial health. In addition to the 20 percent revenue increase, she saw a 67 percent reduction in A/R and a 1.64 percent increase in gross collection rate.

The Clinics of North Texas also received a 2021 Better Performers Award from MGMA in the Operations category.

To earn the award, practices must have less than the median for percentage of total A/R days over 120 days (14.30 percent for physician-owned, multispecialty groups at the time) and less than the median for days adjusted fee-for-service charges in A/R (66.12 days). Practices must also perform greater than the median for adjusted fee-for-service collection percent (99.33 percent). The Clinics of North Texas surpassed all the metrics two years after going live with the revenue cycle management solution.

But the group practice’s success story isn’t over yet.

“We’re still continuing on the track of improving A/R, like reducing A/R over 90 days,” Huff says. “It hasn’t decreased as much as it did in the very beginning once everything was streamlined, but we are still seeing all of these reductions today. It has been steady.”

Revenue cycle automation has also freed up time for what matters most to providers: treating patients.

“We’re no longer going back and forth with providers to discuss billing problems,” Huff explains. “Automation allows us to identify issues quickly and see what we need to address internally or externally to get cash coming in the door quicker, which frees up time for providers. They can spend that time on better patient care.”

And with top-notch patient care and efficient collections, independent practices may withstand the pressures of selling to a hospital or health system.

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