The Revenue Cycle Management service industry has been the backbone for Healthcare providers as it plays a pivotal role in ensuring the financial health of their practices. Various Performance metrics are used to find the health of a practice and gauge the effectiveness of RCM services. One such important and key indicator is the First Pass Resolution Rate. In this blog post, let us look into the concept of the First Pass Resolution Rate, its significance in the realm of Revenue Cycle Management services, and how it contributes to the overall efficiency and financial success of healthcare organizations.
Understanding First Pass Resolution Rate:
First Pass Resolution Rate is a key metric in Revenue Cycle management services that shows the percentage of claims that are successfully processed and paid by the payer in the first submission itself. Here, the first submission means that the claim did not require any rework/resubmission. In simpler terms, it reflects the ability of the Revenue Cycle management team to get it right the first time, ensuring that claims are accurate, complete, and compliant with payer requirements.
The First Pass Resolution Rate is calculated as (Total number of claims processed and paid on first submission/ Total number of Claims submitted) x 100.
Importance of First Pass Resolution Rate in Revenue Cycle Management Services:
1. Accelerates Cash Flow:
A high First Pass Resolution Rate directly means faster collections. When claims are accepted and processed successfully on the first attempt, healthcare providers receive payments more quickly, leading to improved cash flow. This is especially important for providers to maintain the financial stability of hospitals/practices, enabling them to meet operational costs and invest in enhancing patient care.
2. Reduces Operational Costs:
Reworking and resubmitting claims that were initially denied or rejected can be a time-consuming and resource-intensive process. According to the Change Healthcare Revenue Cycle Denial Index, the average cost to rework a denied claim is anywhere between $25 – $117. A high First Pass Resolution Rate minimizes the need for such rework, reducing the operational costs associated with claims management. This not only saves costs for the practice but also ensures that they can focus more on patient care.
3. Enhances Provider-Payer Relationships:
For a Seamless Revenue Cycle Management process it is important to have a positive relationship with the payers. A consistently high First Pass Resolution Rate denotes to payers that the Healthcare service provider is diligent in submitting accurate and compliant claims. This can lead to better interactions, faster claim resolutions, and potentially more favorable contract negotiations, ultimately benefiting the financial health of the organization.
4. Improves Patient Satisfaction:
Every provider must know that a smooth Revenue Cycle Management process directly impacts the patient experience. When claims are processed accurately and promptly, patients are less likely to face billing issues, including faster Prior Auth approvals which otherwise can take a toll on their healthcare experience. This contributes to overall patient satisfaction, as individuals can focus on their health without the added stress of financial uncertainties or disputes.
Ways to improve the First Pass Resolution Rate:
1. Invest in Technology:
A little bit of tech magic can resolve many issues. Investing in advanced RCM technologies, such as automated claim scrubbers and artificial intelligence tools, can significantly improve the accuracy of claims submissions. These technologies can identify errors or inconsistencies in real-time, allowing providers to address issues before claims are submitted to payers.
2. Training and Education:
The Revenue Cycle Management Industry is constantly evolving and so are the constant updates and guidelines for billing and coding. The RCM services team need to stay on top of such updates to achieve a high First Pass Resolution Rate. Regular training programs should be conducted to keep billing and coding staff also updated on changes in payer requirements and industry regulations. This ensures that claims are submitted with accurate and up-to-date information.
3. Let the best handle the rest:
Healthcare providers can outsource their Revenue Cycle Management services to trusted partners like AnnexMed. Outsourcing allows healthcare organizations to leverage the expertise of dedicated RCM professionals who are well-versed in the intricacies of billing and coding. Annexmed’s certified coders and billers will focus on Maximizing claim accuracy ensuring that your First Pass Resolution Rate is at an industry benchmark of 90%.
The First Pass Resolution Rate is like the MVP in the world of managing healthcare finances. It’s not just a number, it’s a measure of efficiency for Revenue Cycle Management services. Getting the right help for your Healthcare organization can be crucial to its success, Contact AnnexMed for a free practice analysis today!