What is revenue leakage?
Revenue leakage is the unforeseen and unrecognized loss of revenue in a business. Mistakes in pricing, inability to record customer changes and manual processing often cause revenue leakage.
In the healthcare industry, referrals are a major source of revenue leakage. If a patient receives a referral but doesn’t schedule an appointment, the provider loses revenue. Other common causes of revenue leakage in healthcare organizations include unresolved claims denials, unrepresented ICD-10 codes, underpayments from insurers and missed patient collections.
To track revenue, healthcare providers utilize revenue cycle management.
Why is revenue leakage important to healthcare?
Revenue leakage is important because it can result in lost earnings in a healthcare business. By understanding where and how leaks occur, a company can proactively address these areas to ensure less wealth is lost.