5 Hidden Revenue Drains in Your Medical Practice—and How to Fix Them

Running a medical practice is no small task, and while you focus on providing excellent patient care, revenue can slip through the cracks in unexpected ways. Here are five common revenue drains in medical practices and how to address them:

1. Lack of Claims Follow-Up with Payers

Unfollowed claims lead to inconsistent cash flow and frustrated staff. Insurance companies often delay payments, deny claims for incorrect reasons, or redirect billers through endless portals without providing clear answers. These delays require a dedicated, driven billers to ensure claims are reimbursed. Without follow-up, practices lose money for services already rendered. The KPI I review first when assesing a clinic is the percentage of AR over 120 days. This tells me if claims are being paid timely, if there are trouble claims sitting with the payers or lost in space. A good AR will only show 10% or less of its claims over 120 days.

2. Unpaid Patient Bills

Patient collections are another significant drain. Aged accounts confuse patients and billing staff leading to frustration over unclear bills and poor patient experience. Staff become overwhelmed, struggling to balance day-to-day tasks while attempting to address these outstanding balances. This cycle leads to financial and emotional burnout across the team. With the advancements in technology over the last 5 years there is no reason for a clinic to be manually collecting outstanding balances. Platforms like Inbox Health are available for RCM companies to integrate into the providers EHR and automate a customizable billing cycle and patient engatment solution leading to faster payments and a higher collection rate.

3. Inefficient Billing Processes

How quickly claims are submitted and processed directly affects revenue. Timely submission ensures a steady cash flow, while delays can lead to significant financial disruptions. Claims that are not submitted promptly face a higher likelihood of denial or rejection due to filing deadlines or administrative errors. This not only impacts immediate revenue but also increases the administrative burden on staff as they work to correct and resubmit claims. Practices without efficient systems or streamlined workflows often fall behind, resulting in claims being either underpaid or completely unprocessed, which compounds revenue problems over time and strains operational resources. Do you have a reliable process to track and confirm the status of submitted claims? This includes ensuring claims sent through EDI are successfully transmitted, paper claims are received by the payer, and electronic claims are both accepted and filed appropriately. Additionally, where do clearinghouse and insurance rejections end up, and who is responsible for addressing those corrections?

If your goal is to maintain a claim lag of fewer than 5 days from the date of service to claim acceptance, it’s critical to streamline the inquiry process for coders and promptly address billing rejections. Work queues cannot afford to have errors sitting idle for extended periods. To achieve this, focus on mitigating errors on the front end while implementing efficient processes for rapid resolution on the back end.

4. Inaccurate Denial Management

A high denial rate can cripple a practice’s revenue. Many practices struggle with responding to denials quickly and effectively, resulting in missed opportunities to recover revenue. Denial management requires expertise, focus, and a robust system to ensure denials are minimized and addressed. One of the most common mistakes I encounter when working with new practices is the mishandling of write-offs or adjustments. Often, staff who do not fully understand the denial simply write off the fee, viewing it as the easiest solution. Unfortunately, this leads to lost revenue and does nothing to address the underlying issue. The same denials will continue to occur until someone takes the time to understand and fix the root cause before the claim is submitted.

For instance, is the issue related to bundling? Does one payer require a modifier that another does not? Denials must be systematically tracked, addressed, and corrected. Additionally, these occurrences should serve as opportunities to educate both the clinic and billing team, creating proactive solutions and preventing recurring errors.

5. Lack of Collaboration Across Teams

Revenue management is not just about billing; it’s about fostering a seamless workflow that connects the front desk, clinical staff, coders, and billers. Without proper communication and alignment, inefficiencies can arise, significantly impacting revenue. Collaboration between departments is crucial, and if your practice is struggling, this is the best place to start. Ask yourself: Is your team working together or against each other?

Much like the human body, every part of the patient experience and treatment process affects the next. Each professional brings unique expertise to the table, and much of that knowledge must overlap with other departments to ensure success. For example, a coder cannot effectively appeal a medical necessity denial without understanding the procedure, anatomy, approach, and clinic policies. Medical assistants or RNs may struggle to send out referrals and prescriptions if the front desk fails to collect and input the necessary information into the EHR. Similarly, providers may find it difficult to review medical history from outside facilities if office administrators don’t properly identify records and assign them to the correct folders in the patient chart.

Overcoming office politics and fostering teamwork is key to creating a seamless patient experience. When we all work together, we contribute to successful patient outcomes. As a seasoned RCM professional, I have collaborated directly with every single department in a clinic at one time or another. Opening lines of communication and encouraging cross-departmental collaboration is essential. Respect each other’s strengths and knowledge—it’s the foundation for a thriving practice and exceptional patient care.

How to Identify These Drains in Your Practice

Start by examining these four key performance indicators (KPIs):

• Accounts Receivable Over 120 Days: Should be less than 10% of your total AR.

• Net Payment Percentage: Aim for a collection rate of 98% or higher.

• Claim Lag Days: Ensure claims are submitted within 3 days of service, with an average payer payment time of 27–35 days.

• Denial Rate: Keep denials under 10% of total claims.

The Solution: Hybrid Revenue Cycle Management Services

The hybrid RCM model is revolutionizing medical billing. Here’s why it works:

• US-Based Expertise: Access certified, experienced billers who integrate with your team directly.

• Real-Time Collaboration: Billers work directly in your EMR and communicate with staff during business hours—no language barriers or time zone challenges.

• Advanced Tools: Leverage AI-driven patient engagement platforms, real-time claim scrubbing, verified appeal generators, and more.

• Full Transparency: You maintain complete visibility into billing processes, with all analytics and dashboards owned by your clinic.

Addressing Hesitations About Hybrid RCM

It’s natural to feel hesitant about outsourcing. Many fear losing control or communication with their RCM team. The hybrid model eliminates these concerns:

• Direct Communication: Your staff have access to our team during your business hours—no automated phone systems, just live support.

• Transparency: You’ll have full visibility into the work being done, as if we were employees in your office.

• Seamless Integration: Our team works directly out of your EMR, ensuring continuity and ease of access.

  
  

Take the First Step Today

Addressing hidden revenue drains starts with identifying the problems. A hybrid RCM solution gives you the tools and expertise to recover lost revenue, streamline processes, and improve the overall patient experience.

Are you ready to transform your practice’s revenue cycle? Let Sloan Medical show you how.