From moose season to flu season, the best and worst times for RCM

Brooke Murphy -

As leaves change color and birds fly south, and so too do healthcare revenue cycles experience unique ebbs and flow throughout the fiscal year.

Revenue cycle experts Jim Lazarus, managing director of strategy and innovation with The Advisory Board Company's revenue cycle solutions division, and Michael Orseno, vice president of revenue cycle with Regent Surgical Centers in Westchester, Ill. spoke with Becker's Hospital Review about what they have come to expect in cash flow during healthcare's financial seasons.

Oftentimes, fluctuations in hospital revenue cycles are geographically driven, particularly in those regions susceptible to seasonal tourism. For example, hospitals and health systems in Vail, Colo., will typically generate higher patient volumes and an increased number of complex medical cases in snowier months when there is an influx of winter sport vacationers, says Mr. Lazarus. Florida hospitals will see a similar uptick in patient volumes, and a correspondingly more active revenue cycle, during summer months, he says.

Market demographics can alternately slow down a medical center's revenue cycle at certain times of the year. Regent's surgical center in Alaska, for instance, experiences a slowing of surgical productivity and revenue flow during moose hunting season, says Mr. Orseno. "During this season we now know that almost all of our physicians will be out of the office."

Revenue cycles can be particularly lively at hospitals during flu season when clinical and physician visits tend to soar and the care services rendered are more straightforward. Ambulatory surgery centers, on the other hand, will see their revenue cycles disrupted by surgery cancellations as patients fall ill. Hospitals and surgery centers  prepare from both a staffing and business perspective to ensure revenue operations run smoothly during these most contagious months. "We make sure that all our staff are cross-trained [within our centers] to mitigate the effect of losing employees to sick leave during flu season," says Mr. Orseno. 

Revenue cycle patterns will reflect national holidays as well, according to Mr. Lazarus. On Labor Day and Memorial Day, traditional travel holidays for many Americans, hospitals may experience comparatively lower volumes and less revenue than fall and winter events, such as the national return to school in September.

At different times of the year, different parts of the revenue cycle can be more active than others.When patient insurance policies renew at the beginning of the year, patient access teams will bare the brunt of revenue cycle activity during the first financial quarter, Mr. Lazarus says. The new year brings new policies, new patient benefits, new paperwork and new patients to register and adjudicate, all of which must be managed efficiently and accurately at the front end of the revenue cycle.

Cash flow and collections processes at the RCM backend tend to run more smoothly in the third and fourth quarters when medical centers turn their collection focus from patients to payers. "As a direct correlation to our revenue cycle, we see days in accounts receivable typically drop in the latter half of the year," says Mr. Orseno. 

The RCM backend is also abuzz with financial reporting in the two to six weeks following the end of a hospital's fiscal year, Mr. Lazarus adds. If the fiscal year ends at a similar time to when new insurance policies start, then a hospital's entire revenue cycle will stay particularly busy.

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