It is a sheer travesty to believe that when a patient and his/her walks in a hospital, the only thing that they have in their mind is a superior quality medical care and complete recovery of the patient. While this is not entirely wrong, a lackluster financial procedure that includes inefficient patient billing and other related services takes a severe toll on the patient’s financial experience. This has ramifications on the hospital revenue cycle management. In the era of healthcare consumerism, where patients have a prominent say on all the healthcare services they receive, the hospital revenue cycle management assumes a strategic position to impact a patient’s overall experience in a hospital. Ideally, CFOs and other key decision-makers must devise strategies to suit their RCM services to patients’ satisfaction instead of solely focusing on increasing their bottom line.
According to the findings of a survey1 conducted by the healthcare research, strategy, and marketing enterprise, Sage Growth Partners in collaboration with the healthcare technology company, Dorado Systems, inadequate revenue cycle management services framework, complexity and dynamism in healthcare regulations, alterations in reimbursement models are contributing towards bad debt incurred by hospitals. Such an alarming scenario has set stakeholders to get on a war footing to renovate and re-establish and do “whatever it takes” to block hospital revenue leakage.
Common Challenges Faced in Hospital Revenue Cycle Management
Incurring bad debts is just the tip of the iceberg when it comes to the potential lags in a hospital revenue cycle management. In order to draw an accurate strategy to address and fix these lags one must be informed on the challenges faced during the delivery of RCM services on a regular basis.
Here’s a look at some of the common but serious challenges faced while delivering revenue cycle management services:
Erroneous patient administration process – The RCM wheel starts rolling right from the point when a patient books an appointment with a physician to the final dues paid by the patient after the healthcare provider receives reimbursement from the insurance company. The workflow involves a gamut of processes such as accurate execution of steps for patient admission that includes copying insurance cards, IDs, date and contact information verification. Any error in even one of these steps will derail the billing and claims filing process.
Erroneous bill and collection process– Errors like misspelt patient names, incorrect verification of patients’ eligibility, erroneous coding, among others have negative implications on claim filing process resulting in claim denials. This is a big blow on the source of hospital revenue.
After service costs– After service costs refer to processes such as patient invoicing, insurance filing, follow up on outstanding bills, accepting due payments, writing off bad debt, and fresh appointment scheduling. If these processes are not taken care prior to patients’ appointments, chances are with the services piling up, the expenses for the same will skyrocket. Failure of an early execution of these services adds to the time taken between a patient consultation and getting paid for it. Not only does this scenario negatively impact the patient and caregiver relationship but also affects the RCM services delivery.
Inadequate digital infrastructure– In the digital era, patient expect a certain level of advancements in a range of administrative services that can be achieved by implementing digital solutions. Acceptance of online payments, different modes of paying bills at the time of making an appointment, the ability to print forms of hospital websites are some of the advancements that can be implement to overhaul revenue cycle management services digitally.
Detailed policies– Maintaining detailed financial policies is critical for hospital administrative staff for a proper guidance on the steps that they need to follow for a timely and accurate execution of processes which are invoicing, filing, and payments. Descriptive financial policies are critical in giving a detailed picture of the billing process and highlight everything about patients’ responsibilities for due payments, steps to take in case of claim denials, ways to communicate for copayments and insurance requirements, among others.
How to Overhaul Revenue Cycle Management Services Workflow?
As a generic observation, CFOs must check the pulse of their current hospital revenue cycle management to understand it efficacy. This will reveal the potential areas that require overhaul to improve the overall revenue cycle management services workflow. The administrative staff who are responsible to execute process like compliance, coding, billing, data exchange, among others, the processes that mainly include claims filing and submission, data collection, AR processing, and more, technology adoption, and data are the chief areas that require regular focus to improve hospital revenue cycle management.
Embrace automation– It will not be a long shot to state that embracing automation is the key to improve RCM services workflow. As most of the visionary healthcare enterprises have already adopted, for those who are still contemplating, they must draw a cue from how retail enterprises have automate the front-end as well as the backend processes to promote a fulfilling customer experience. According to the findings of the Council for Affordable Quality Healthcare (CAQH), healthcare providers can potentially save over USD 8 billion per year by automating some of the key RCM services such as claim management and prior authorizations.
A proper execution of health plans requires pre-approved running of medical tests advised by physicians, conducting clinical procedures, and administering medicines. A manual process for authorization will delay these procedures will impact the time taken to treat patients and will also result in administrative expenses to skyrocket. Automating revenue management cycle will relieve healthcare professionals from the burden of executing RCM services, thereby reducing the chances human error as well as labor expenses. However, it is essential that the technologies that the administration adopt integrate into the existing revenue cycle process flow and legacy infrastructure.
Aligning services with healthcare consumerism– With the healthcare industry becoming more consumer-driven, patients exercise more clout in decisions pertaining to the cost of healthcare services that they receive. Evolution of various insurance policies and online knowledge hub and tools that offer transparency into healthcare expenses and quality make it essential for healthcare providers to provide meaningful price information to patients. To begin with, owing to a significant increase in patients’ out-of-pocket expenses, it is the duty of a hospital administration to enlighten patients on their financial responsibility prior to billing them.
Just like in the retail marketplace, where a customer has a prior knowledge about the cost of an item prior to being billed for that, it is essential for a patient to have a fair idea about the total expenditure of healthcare services that he/she is signing for. This prior knowledge prompts patients to start paying in advance which is a welcoming development for the billing and collection stage of the hospital revenue cycle management.
To achieve this, healthcare providers have received the mandate to issue a chargemaster list online to inform patients on service charges. However, the accuracy of this measure is still debatable as it does not highlight the actual price that a patient finally ends up paying. The loose ends of this initiative have to be tied together by RCM technologies to publish the actual price estimates, thereby facilitating pricing transparency in RCM services.
Data to track revenue cycle management services efficacy– As was discussed above, CFOs must be aware of the health of their existing revenue cycle management framework to know where they lag. This can be done by assessing clinical and financial data of a healthcare organization on a regular basis to devise key performance indicators. These KPIs will be the determinants of the quality of a hospital revenue cycle management and the overall administration. A healthcare organization should primarily focus on five main KPIs pertinent to RCM services which are frequency of claim denials, number of days in accounts receivable, collecting cash as a percentage of net patient services revenue, ultimate denial write-off as a percentage of net patient service revenue, and collection expenses. Tracking these KPIs will provide an immediate glimpse on whether the revenue cycle management is on the right track or require immediate improvisations. Stakeholders are advised to share these KPIs and performance data with the clinical and administration staff which serve as an impetus for them to improve their efficiency in their tasks.
Maintain a specialized healthcare coordinator– With the dawn of healthcare consumerism, stakeholders can no longer count on a heavy patient footfall and running a battery of tests and treatments as a funnel for revenue. Issuance of a variety of government programs and insurance plans have shifted focus from quantity to the quality and efficacy of the medical care provided to patients. In such a scenario it is prudent to maintain a healthcare coordinator who have the requisite experience and expertise to comprehend the dynamism in policies which ascertain the determination of payouts and reimbursements for hospitals. A dedicate healthcare coordinator stays abreast of the date of changes in policy governing legislations. This aids in a proactive updating of a healthcare organization’s financial policies and join hands with caregivers and patients to improve care under the newly emerged value-based healthcare model. Essentially, healthcare coordinators can bridge gaps between patients and caregivers which will bring the latter in a better position to comprehend patients’ concerns while exerting an impetus for patients to get more involved in their treatment process. Healthcare coordinators are also tasked to organize wellness and health programs that are something extra beyond the regular appointments and procedures cycles. While this adds to the quality of care offered to patients, from a hospital revenue cycle management perspective, it serves as a potential income source.
Benefits of RCM Outsourcing
According to the findings of an online survey conducted by the healthcare research, strategy, and marketing enterprise, Sage Growth Partners, over 36% of the survey respondents, who were also c-suite executives in the healthcare sector, admitted partnering with third party vendors for bad debt recovery. Frequent reforms in insurance policies have made it even more complex to stick to a definitive strategic framework bad debt recovery. As an onslaught of the Covid 19 pandemic, a barrage of regulatory reforms was introduced that altered the way various administrative tasks pertaining to hospital revenue cycle management were executed. The billing and coding function is one of the chief RCM services which witnessed the introduction of new codes by regulatory bodies that would be used to generate bills. Fresh guidelines to bill no-contact healthcare services were introduced to offer virtual treatment to patients. Such dynamism and unconventional healthcare practices reinstate the importance of RCM outsourcing to allow the tasks to be executed by domain experts.
Here’s a look at some of the top benefits of RCM outsourcing:
Minimal erroneous billing – RCM vendors are equipped with experts with domain specific knowledge and an arsenal of the most advanced technologies which reduce the chances of human-led errors in the billing process such as wrong entry of patient name or incorrect CPT codes.
Improved AR Reconciliations– One of the critical benefits of RCM outsourcing is that your vendor will conduct a proactive follow-up on ARs from insurance providers to keep a continuous track of your organization’s financial health. It helps you to ensure that you get adequately reimbursed for the care you are rendering to patients.
Streamlined revenue cycle – Involvement of multiple point of contacts to manage your RCM services inhibits a steady cash stream. As your RCM vendor plays the role of the single point of contact for your financials, you know who to contact to enquire about the payments of the services provided to patients.
More Timely Reimbursements– The RCM process being exclusively focused on revenue cycle services and not involved any medical functions, revenue cycle management companies will be empowered to conduct a fast-track collection and validation of patient information, confirm their insurance eligibility, and process payments on an independent basis to ensure timely reimbursements.
Who We Are and Why We Are an Industry Authority?
This article is authored by experts at MedBillingExperts, one of the leading revenue cycle management companies catering to Fortune 500 enterprises in the healthcare sector. We have witnessed enormous dynamism that has changed the way healthcare enterprise operates. We have adapted to these changes and have restructured our operations to cater to your end-to-end revenue cycle management requirements. Through our over a decade-long experience in the industry, we have aided clients to identify and stop revenue leakage, stay compliant to all the relevant global and regional regulations, and mitigate inefficiencies in processes that were taking a toll on their revenue generating prospects.