Patient payers are bucking the RCM status-quo — Why now is the time for providers to pivot from bolt-on to fully integrated technology

Changes in healthcare coverage and reimbursement models have significantly altered hospital revenue cycle management over the last couple decades. Twenty years ago, medical billing processes were almost exclusively focused on achieving optimal private and public payer reimbursement. Today, a significant rise in highdeductible health plans means providers must place greater emphasis on achieving higher rates of patient payments. The shift further complicates RCM models that are already battling significant regulatory, cost-management and policy headwinds.

                                                This content is sponsored by Zotec

Collections have always been a pain point for providers, and the rise in high-deductible health plans has only amplified the issue. The percentage of Americans under age 65 with a high-deductible health plan increased from 43.7 percent in 2017 to 47 percent in the first three months of 2018, according to the CDC.

This proliferation in deductibles, which for many patients now exceed their average annual medical spend, means more healthcare dollars are coming from patients' pockets. Patient out-of-pocket spending grew significantly in 2017, according to JPMorgan Chase Institute. The report found average annual out-of-pocket healthcare spending climbed 8.5 percent in 2017 compared to the year prior, representing the fastest increase since 2014.

As patient payments continue to make up a larger share of provider revenue, financial leaders need to deploy new strategies to increase collections and help patients navigate their rising medical costs. Exceeding patients' expectations when it comes to financial experience is in the best interest for providers. Step one is sunsetting outdated, inefficient RCM systems.

RCM's bolt-on problem

The emergence of the patient payer spurred the creation of bolt-on technologies to make RCM services more effective. Add-ons like service portals and payment dashboards have helped providers get a better sense of patient populations and their propensity to pay. These technologies examine physician and patient data to craft the best avenue for physicians to reach their patients, so they can receive reimbursement for their medical services.

The issue with these bolt-on technologies is that the information they gather is not integrated. Instead, disparate data generated by each add-on technology is handed to the RCM department in buckets. The department is then responsible for synergizing non-standardized data into a timely and correct insurance claim, a burdensome and costly task for an already overworked department.

When it comes time for provider organizations to follow up with the patient about any remaining balances not covered by insurance, mismatched and incorrect financial data could have slipped past the bolt-on solutions from different vendors. Such inconsistencies result in billing errors that confuse patients and negatively affect their opinion about a provider — even if clinical care was excellent and outcomes were positive. A recent report from InstaMed found 65 percent of patients would consider switching providers if it meant having a better experience with payments. As provider revenue attributed to patient balances grew 88 percent from 2012-17, providers can't afford this type of churn.

"At the end of the day, we don't want the financial experience to have any bearing on the clinical experience," David J. Law, chief client officer for revenue cycle and practice management company Zotec Partners, said. "If the patient has a bad financial experience, they are much more likely to not refer or go back to that provider. It has nothing to do with the quality of the care. It's all about the financial experience."

The new patient payer paradigm is altering the C-suite's approach to RCM. Leaders now see new methods and solutions to improve patient payment as crucial to achieving patient-centered, value-based care. To avoid balance errors or incorrect claims, providers need to have an integrated billing solution that removes the need for multiple third parties. Such a solution brings all the processes — including eligibility checks, claims processing and patient balance estimates — under one platform.

The solution: An integrated RCM platform

While the initial rise in high-deductible health plans and patient out-of-pocket spending increased the demand for niche solutions to support a better billing experience from patient check-in through payment collection, the usefulness of disparate RCM solutions is diminishing. Now, organizations are looking for solutions to the inefficiencies these tools created.

"In a bolt-on scenario, you would have to pass that balance to a third-party product, and that balance sometimes gets lost or is wrong," Mr. Law said. "Worse still, you're involving the patient in what is potentially an inconsistent or incorrect balance. It can create a lot of problems in that balance transfer and interaction with the patient. If you have a truly integrated solution, balances get passed correctly onto the patient."

End-to-end RCM solutions and technologies that leverage coding, charge creation, electronic data interchange, payment posting, accounts receivable follow-up and interactions can now integrate critical and more granular RCM processes that were previously bolted on. A more consistent and secure billing process for patients can be created when providers replace each coding, eligibility check, pre-certification and clinical documentation add-on with a single streamlined and integrated RCM solution.

Under an integrated system, providers know when an accurate bill is sent to the patient. They can track the entire payment cycle. As a result, accurate data is consistently entered into the revenue cycle system. What providers once considered in-house, back-end functions that required different vendors for different processes can now be consolidated into a fully integrated RCM process that begins before patient registration and ends with patient follow-up and collections.

Exceed patients' financial expectations with the right RCM solution 

The advantage of having an integrated RCM system lies in providers' ability to conduct consistent, clear and tailored payment dialogues between patients.

"When an RCM solution owns the whole patient interaction from start to finish, providers can start to look for trends and patterns in patient wants and needs," said Sean Vyain, principal enterprise architect at Zotec Partners.

Zotec Partners provides this integrated service for independent medical groups, hospitals and health systems. Currently, Zotec manages more than 80 million medical encounters and serves approximately 15,000 physicians nationwide.

Zotec's proprietary technology helps automate the process of managing claims. When a physician treats a patient and enters corresponding billing codes, Zotec bypasses third-party bolton technologies like clearinghouses and goes directly to the insurance provider. A clearinghouse is a public or private entity, like a billing service or a community health information system, that processes nonstandard claims and transactions from a provider into standard data for payers, or vice versa.

"Zotec makes sure claims go directly to the payers and are accepted. The direct filing of the claims to the insurance plans is definitely advantageous to relying on multiple third-party vendors," Mr. Law said.

In addition to back-end services, Zotec also acts as a onestop shop for front-end RCM services. For example, when a patient goes to the front desk and asks for the estimated amount they will be responsible for before receiving medical attention, Zotec's technologies can help providers answer these questions without having to rely on an additional outside vendor. Back-end and front-end services are thus integrated, which also means all metrics can be viewed on a single dashboard.

"Leading providers are focused on owning that patient financial interaction from end to end," Mr. Vyain said.

Why it matters: To the patient, RCM equals patient experience

The evidence is clear: Patients are the fastest growing payer. Collectively, patient healthcare costs, including both deductibles and out-of-pocket maximum payments, have climbed 30 percent since 2015, according to a 2017 Black Book report.

This trend shows no sign of slowing. As RCM processes like registration, preauthorization and billing are oftentimes the main point of patient contact for providers, the onus is on providers to deliver a financial experience that measures up to patient's expectations. It's these processes that linger in patients' memory and influence their future medical decisions. Consequently, to modernize and streamline RCM, healthcare leaders should consider dropping bolt-on solutions and upgrading their patient financial operations to a single integrated, automated RCM solution.

"This is a consumer-oriented business now," Mr. Vyain said. "Patients are advancing their technological expectations, and healthcare executives have to keep up and stay ahead of them."

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