3 Revenue Cycle Action Areas to Impact Costs and Revenue in 2019
With each new year comes a load of predictions and advice. If you’re like me, you’ve heard enough theories about the risks, challenges and trends in healthcare IT in 2019 to last a lifetime. We need actionable insights! Here are three areas where you can take concrete action and optimize your revenue cycle:
Collect More from Patients – Sooner
Due to higher deducibles, coinsurance and copays, patients continue to shoulder more of their healthcare cost. Total hospital revenue attributed to patient financial responsibility after insurance increased 88 percent between 2012 and 2017.1 Don’t let that revenue go uncollected in your organization. Collecting patient financial liabilities prior to arrival, at the point of care, and post-service requires:
- Accurate estimate of patients’ responsibility and a process for informing them
- Robust point-of-service (POS) collection technology
- Visibility into all patient charges across the enterprise – whether inpatient or outpatient, primary care or specialist
Giving patients a clear view into their financial obligations and educating them about their portion of the bill ahead of time avoids nasty surprises. It also helps them come prepared to pay or consider financing arrangements. A patient payment estimator helps set expectations and start the conversation about payment options. This increases the likelihood of collecting from patients sooner, increasing revenue and lowering cost-to-collect, while protecting and in some cases, improving, the patient-provider relationship.
To increase collections at the point of service (POS), without burdening front desk staff, look for POS technology that integrates directly into the check-in process, providing the right information at the right time. Your POS solution should deliver visit-specific liability amounts in an automated fashion. Take this approach and your billing office can leave behind the significant effort of identifying co-pays and other liability amounts from insurance cards and payer websites. No more head-scratching over confusing EDI eligibility responses.
To get complete visibility into patient liabilities and increase staff efficiencies, health systems are increasingly adopting a centralized business office. With a Combined Business Office (CBO) approach, hospital and physician billing are done by billing teams often working in the same physical location and reporting to the same leader. A truly combined CBO solution will be a single system that shows everything a patient owes in one easy view to help you collect all physician and inpatient charges. Combining operations opens the door to better financial performance and lower cost-to-collect while also improving the patient financial experience.
Use Bots to Automate Repetitive Tasks
Watch out for that self-driving car – artificial intelligence (AI) is coming your way. AI can also be leveraged to help reduce staffing costs and human error in RCM operations. While many steps in the revenue cycle process require human judgement and expertise, Bots powered by AI can help automate standard, manual tasks to save staff time. Staffing is the highest single cost in any healthcare organization, and revenue cycle management is no exception.
Here are benefits you’ll reap from automation:
- Free staff for higher-level work. Put staff to work on complex tasks that require brain power. Automate boring, repetitive
- Do more with less. Using automation lets organizations reduce or reassign staff. Many companies find that they no longer need an overnight person (or crew) to run reports and churn out claim statements.
- Reduce errors. Even the most conscientious person makes mistakes or misses a day of work. But software code doesn’t make typos. It runs like clockwork, never calling in sick or forgetting to run a job.
How do you begin automating your revenue cycle? Step one is to identify the tasks that are top candidates for automation. Ask two questions to get you started:
- Is the job repetitive?
- Does it require human intervention?
From our experience, top candidates include night jobs, month–end close and associated reports, and paper claims, to name a few.
Once you have identified tasks that are repetitive and don’t require a human touch, work with your revenue cycle solution vendor to understand the best way to prioritize your tasks for automation. Benchmark the time and cost savings you expect to see from optimizing your processes.
Get Serious About Managing and Preventing Denials
No doubt about it – denials are costly and time-consuming:
- Providers lose an estimated $262 billion annually because of denied claims.2
- According to a recent HIMSS/Dimensional Insight survey, 76% of hospitals – ranging in bed-size from 50 to 500 – say denials are the biggest RCM challenge they face today.3
- For physician practices, the average denials rate ranges from 5% -10%. This can equate to thousands of dollars in lost revenue each month, not including the cost of re-work.4
Turning this around requires a range of processes across the entire RCM pathway to reduce the number of claims that are rejected or denied by payers – and to efficiently rework the ones that matter.
Delivering the best ROI for denials management performance takes three key elements:
- Robust analytics to get better insights and data across different kinds of care settings
- Connectivity for data sharing with payers
- Automating simple, redundant tasks so people focus where they are most needed
Start by identifying and addressing the root cause of your denials. Put in place best-practice processes with upstream RCM teams to prevent denials from happening. Taking steps to proactively combat denials can have a significant, positive impact on your revenue.
2 (Source: The Change Healthcare Healthy Hospital Revenue Cycle Index. Available at MyHealthyHospital.com)
3 (Source: HIMSS and Dimensional Insight. Understanding Health Systems’ Revenue Cycle Management Challenges. May 2018.)
4 (Source: American Academy of Family Physicians. Key Metric Denial Rate. Available at https://www.aafp.org/practice-management/administration/finances/denial-rate.html