Mastering the healthcare revenue cycle: 6 expert insights

Revenue cycle management is a common thread between all providers, regardless of size or specialty.

Kelley Blair, executive vice president of client organization with Adreima, shares four key insights into the current state of the healthcare revenue cycle and how providers can maintain smooth revenue cycle management processes despite the myriad challenges and changes reshaping healthcare.

Revenue cycle challenges. Providers need to know what they are up against. Each organization is unique and faces different obstacles, but there are a number of common issues that impact the revenue cycle, according to Ms. Blair.   

1. Consumerism. Patients are becoming a larger part of revenue cycle management. High deductible health plans are driving patients to shop around for care and forcing providers to see patients as informed consumers. "We talk about payments from patients and payer reimbursement separately with our clients and stress both are important. The payer side is all about managing transactions, but that is not how you manage a patient," says Ms. Blair.

Many healthcare organizations' approach to increasing patient financial responsibility is to ramp up point-of-service collection efforts. While upfront collections are an effective step, consumerism — and healthcare's climbing price tags — demands more long-term thinking.

As high-deductible plans become the norm, upfront collections alone will be insufficient. "Can anyone afford $10,000 out-of-pocket?  Payment plans need to be set up ahead of time," says Ms. Blair. "Then group patients that can afford to pay upfront and finally identify and group the patients that don't have that ability to pay."

Focus on introducing a human element of partnership into the patient payment process. Help patients that will need a payment plan understand their benefits; how this applies to their cost of care and what will be expected of them. The more healthcare organizations invest in education, the more likely patients will pay and be satisfied with their experience.

2. Consolidation. Several forces are driving consolidation in the healthcare space. "As you see the number of healthcare organizations decrease, you will see increased revenue cycle consolidation," she says. "Organizations will increasingly bring ambulatory areas and long-term care under one RCM structure."

Revenue cycle consolidation is inevitable, particularly as patient care continues to become integrated. "At some point, there will be one bill representing everything. We are not there yet," says Ms. Blair. In the meantime, consider what elements of billing can be condensed. For example, start with consolidation of patient facing functions resulting in a single statement. Consolidation in revenue cycle will drive further efficiency.

3. Regulatory flux. The two-midnight rule and ICD-10 both heavily impact revenue cycle management. Consider how an organization's resources can be properly applied to prepare for and manage these changes.

ICD-10 is one of the most pressing issues on the regulatory front. Despite, the one-year grace period in which claims will not be denied solely on issues with ICD-10 codes, healthcare organizations are still pressed to prepare. "Do you have a plan to augment your coding staff? There is a time crunch, and there will not be coders available, except for a premium price," she says. Without the proper amount of coding talent, every aspect of the revenue cycle could be impacted.

Hospitals and health systems may need to begin a broader search to expand their coding teams. For those that outsource coding, it will be important to communicate with vendors to ensure enough coders are in place. "We have seen a continued increase in hospitals becoming comfortable with offshore outsourcing," says Ms. Blair. "There are limited options in the United States, and hospitals need a plan now."

4. IT implementations. Many healthcare organizations are in the process of selecting or switching revenue cycle vendors, not to mention EHR vendors. These transition periods can dramatically slow coding, billing and collection process.

Shifting payment and regulatory requirements are driving many hospitals and health systems to switch IT systems. These transitions can affect the revenue cycle, particularly when it comes to charge capture. "Charging by documentation can lead to efficiencies and increased accuracy but only if the underlying chargemaster is accurate," says Ms. Blair. Conduct regular chargemaster and charge capture audits to ensure there are no areas of under- or overcharging.

Any IT implementation is going to require staff training. While an important process, staff members will lose productivity, she says. "A/R days should be as low as possible before the implementation which may require putting in place a resource augmentation plan."

5. Consider underutilized strategies. The revenue cycle is often relegated to the business office silo, but it is becoming more difficult for major healthcare system functions to operate in separate silos. As healthcare shifts to a value-based healthcare model the clinical and financial functions are growing increasingly interrelated. With the increase in denials and a higher level of documentation scrutiny it means clinicians need to be engaged in the revenue cycle process. Educating physicians and giving them a greater awareness of the need to document accurately can measurably improve the integrity of the revenue.

6. The changing role of the RCM leader. The traditional revenue cycle leader has been focused on the back end, but the shift toward consumerism is going to demand an expanded skill set. "Right now, the job is to make sure transactions are accurate and paid correctly," says Ms. Blair. But the new revenue cycle leader will be someone who can be more analytical and understand the care being provided. RCM leaders will need to understand the patient's financial experience and the new value-based payment environment. The role will no longer be focused on just cash flow, but will evolve into gathering data, analyzing to continuously improve and sharing the cost to collect data and patients' satisfaction level on the payment experience.

More articles on revenue cycle management:
117 Medicare statistics to know
RCM tip of the day: Optimize scheduling
RCM tip of the day: Add financial services to marketing strategy

© Copyright ASC COMMUNICATIONS 2020. Interested in LINKING to or REPRINTING this content? View our policies by clicking here.


Featured Webinars

Featured Whitepapers