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Why Work Comp Providers Need Specialized RCM

November 21, 2017 by Catherine Montgomery

Workers’ compensation is different.

It’s a labyrinth of legal and procedural twists, turns, and obstacles that don’t plague providers in other areas of medicine. When it comes to billing and payment, there’s no way around it: providers need help. If financial success is the goal, wading into workers’ comp without specialized Revenue Cycle Management (RCM) is like going into a blizzard with a raincoat; technically possible, but woefully inadequate.

Providers simply can’t go it alone in this environment. Here are 5 reasons work comp-specific RCM is a must.

1. Narrow Profit Margins

Workers’ comp presents a special profitability challenge to providers. It’s not that there’s no money in treating injured workers, it’s that the money is frustratingly hard to collect.

To obtain proper reimbursement, work comp providers have to navigate a system in which the default outcome of almost every dispute is denial of payment. To authorize services, they have to jump through hoops that would make the most seasoned circus animals balk. They spend time and money, the value of which starts to rival the revenue they’re trying to collect.

And even after all that, the powers that be can still unfairly deny providers their due with inconsistent rulings on disputes.

The bottom line? Generating revenue in the work comp arena can take more effort than it’s worth. Specialized RCM tools correct this problem, balancing the cost/benefit ratio and improving the return on investment to the point where work comp starts to do something incredible: make financial sense.

2. Crazy Accounts Receivables (A/R)

Not only is revenue tough to generate in work comp, there can be serious delays in   actually receiving it. In work comp, Accounts Receivable can be a purgatory where money owed from insurers, employers, and their claims administrators are in for a lengthy stay. While rules exist regarding the timely payment of work comp bills, they’re not strictly enforced.

Payment times can vary from payor to payor, with some taking weeks or even months longer than is reasonable or required by law. And for those providers still relying on paper billing or a single clearinghouse, the delays are even worse.

The solution? Your RCM should include e-billing, complete with bill tracking linked to legally mandated payment deadlines and easily-submittable audit complaints. Show payors that you expect them to pay what they owe, when they owe it.

3. The Stacked Compliance Deck

As mentioned above, the rules regarding compliance in work comp are weighed heavily in favor of the payor. While there are clear requirements for almost every aspect of authorization, billing, and payment, the consequences for violations are imbalanced, to put it mildly.

Unless the provider has the resources to hold insurers, employers, and their claims administrators to account, the system will ultimately rob them. Adequate RCM includes the tools and technologies to respond to payor non-compliance. Those include:

  • Authorization tools that track the required response times.
  • Billing software that tracks payment times.
  • Tools for easy Second Review and Independent Bill Review

These tools improve profitability in a crucial way: by leveling the playing field.

4. Administrative Costs

Work comp providers have to fight for their due. So how does one win that fight? Reliable, qualified administrative staff goes a long toward that end, but work comp is simply too convoluted for even the best administrative professionals to keep up. Providers need dedicated software that empowers administrative staff.

For example, take California’s Official Medical Fee Schedule (OMFS) for workers’ comp. This hellscape of ever-changing, complicated billing code is a nightmare to stay on top of. The first thing good RCM does is automate the task of calculating the correct payment based on the most recent OMFS information. That time saved is money saved.

Add the time and resources saved by quick and easy authorization, appeals, and verified delivery of bills, and you’ve got a formula for drastically lower overhead.

5. Focus on Patients

Finally, top-notch RCM lets providers do the most important thing: treat injured employees and get them back to work.

No one goes to medical school dreaming of the day they’ll get to tackle the challenges of billing and payment regulations. Doctors and other providers, above all else, want to help patients. Every second and every dime spent grappling with administrative issues detracts from that mission. Put simply, good RCM gets the business side of the medical business off the doctor’s plate, so the focus can stay on treatment.

The financial health of a provider’s office directly correlates to the literal health of human beings. The more efficiently your RCM can ensure that, the better off everyone is.


DaisyBill offers everything providers need to streamline workers’ comp billing and payment. Manage your revenue cycle effectively and efficiently. Schedule a free demonstration today, and see what DaisyBill can do for your office.

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