Is your A/R operation draining profits?
In the past decade, amid a perfect storm of rising healthcare costs, sweeping regulatory activity, dwindling insurance payouts, and other pressures, the ground beneath hospitals and other large healthcare providers has shifted dramatically.
Many of these providers are still struggling to regain their footing. Although hospitals' median annual revenue growth surpassed expense inflation by 0.1 percent in 2018, their margins fell to a meager 1.7 percent (from 1.8 percent in 2017).
This content is sponsored by Ontario Systems
As providers look for creative ways to ensure long-term financial health and profitability, many are turning their focus to managing operating costs that eat away at the bottom line. A 2018 survey of healthcare industry executives revealed that 52 percent see revenue growth as their top business challenge for 2019, with rising expenses (38 percent) and managing labor costs (37 percent) following closely behind.
One of the biggest but most overlooked revenue drains in the healthcare industry is the revenue cycle process. Rather than boosting profitability through revenue recovery, many A/R departments are operating well below their potential for efficiency, productivity and results — thus limiting providers' ability to compete and grow.
Problem #1: Rising labor costs in a high-turnover field
A 2017 Deloitte report reveals that labor accounts for about half of hospitals' total operating expenses. While providers continue to grapple with rising labor costs, they must also bear the high costs of replacing employees who leave.
As of 2017, the average turnover rate in the healthcare industry was 20.6 percent (second only to hospitality). Among 850 clinical and nonclinical healthcare workers surveyed that same year, 37 percent planned to leave their current jobs within two years, and nearly 70 percent planned to leave within five years.
For every disengaged or dissatisfied collector who quits, providers must hire, train, and pay "hidden" costs related to lost productivity and lower-quality output. Although many providers are resigned to employee attrition, it's one of the biggest cost drivers there is.
Problem #2: The scramble to collect from a shrinking reimbursement pool
Patient's financial responsibility for the healthcare services they receive has skyrocketed in recent years. In the five-year period from Q1 2012 to Q1 2017, the proportion of hospital revenues attributed to patient balances after insurance (PBAI) grew 88 percent.
Historically, providers have struggled to collect PBAI. Now that reimbursements are dropping, there's less to collect through claims follow-up and denials management — and a more urgent focus on collecting as much of that revenue as possible. Hiring more collectors to work through a higher volume of accounts is always an option, but that's tough to do in a high-turnover environment.
The only way to ramp up collections results with an existing team is to ensure every A/R person is fully engaged, making the most of their time, and inclined to stay long term. Unfortunately, most providers aren't equipped to achieve this ideal.
Is there a way to conquer both problems quickly?
With so many industry challenges and operating costs weighing you down, how can you get more done with fewer collectors, accelerate cashflow, and improve the collection of both patient and payer liabilities?
The solution is surprisingly simple. You can magnify your investments in EHR and labor, enhancing their capabilities and value by way of an "accountable" revenue cycle — one you can track and manage with ease. Whether your collectors are working on site or at home, you can effectively measure and improve their performance and productivity. If you want to get ahead in the current industry climate, accountable A/R is mission critical.
The EHR platform gap
In the past decade, EHRs have become a standard feature for hospitals, health systems and ancillary providers. They not only increase operational efficiencies and improve patient care, but also support and simplify the revenue cycle by verifying insurance coverage in real time, improving billing accuracy, streamlining claims filing, and reducing insurance denials and lost charges.
EHR systems give providers the reporting capabilities and tools they need to make better administrative and clinical decisions, lower costs across the enterprise and capture more revenue. However, as integral as EHRs are in large, high-volume healthcare settings, they're limited in their capacity to streamline and improve each collector's impact on A/R operations.
The final barrier to RCM optimization
The healthcare revenue cycle ultimately depends on the front-line teams that power it. Collectors who spend their days following up on patient invoices and insurance claims must be well trained, well equipped, well managed, and properly motivated to optimize the revenue cycle. For the industry's most successful collection teams, accountability is the engine that drives results. Unfortunately, many providers' existing EHR solutions lack the automation and insights needed to build accountability into the collections process.
Collectors aren't empowered to make best use of their time, and providers don't have a clear view of when and how accounts are being worked to completion. Given the growing work-at-home trend among healthcare A/R teams, the insight and performance gaps that hold these teams back will only continue to widen.
Critical questions left unanswered
Are your collectors spending too much time on hold? Are they working as many claims as they can when they call payers? Are they asking all the right questions and helping ensure payers' compliance with applicable laws? Is your quality assurance program effective, and does it drive ongoing improvement? Are your work- at-home collectors as productive as those in the office?
Existing EHR RCM tools don't answer these questions. They shed very little light on collector performance. They don't have automation capabilities that enhance productivity. And they can't correct and prevent front-line issues that complicate account resolution.
The fact is, providers that rely solely on EHR systems for RCM functions have no good way to manage, develop and empower A/R teams, even as account volumes increase and remote collections work becomes the norm. Limited functionality/visibility is particularly problematic when turnover is high and it does nothing to curb attrition. Considering all the financial pressures that large providers are now up against, the classic approach to A/R management (provide a burst of initial training and then hope for the best) falls painfully short of what's required.
For A/R teams everywhere, high churn, inefficiency and super-tight margins have become routine. Employee disengagement is a major culprit, but it's not the root cause. Managers and collectors simply lack the capabilities and insights they need to ensure accountability and create a virtuous cycle of improvement.
Studies have shown that on-site and work-at-home employees are more engaged, more effective and likelier to stay put when they have the tools they need to improve on the job:
• Regular, intentional coaching and training as part of an ongoing performance management program. To make the program work, managers need meaningful real-time data that reveal errors, productivity gaps and progress toward performance goals.
• Automated functions that drive productivity. Easy access to information, prioritization of accounts, and the means to optimize payer calls and minimize hold times make it easy for collectors to recover revenues.
A simple addition to an existing EHR system can provide these operational boosts to speed up the revenue cycle, help lower attrition rates, and allow A/R teams to do more with less — with a substantial impact on the top and bottom lines.
Enhancing ROI for existing systems
For hospitals, health systems and ancillary providers that have invested heavily in their existing EHR RCM tools, adding a “bolt on” A/R workflow management platform may not be the right fit.
A complementary product, which is designed to work in harmony with existing EHR workflow, work queues and claim screens, doesn't nullify the core EHR investment. On the contrary, it enhances the functionality and workflows providers already have in place.
Building an Accountable Collections Team
Accountable collectors are always clear on their priorities. They handle payer calls knowledgably and precisely. They aren't hamstrung by lengthy hold times. And their performance is continually measured, with team leaders providing timely feedback that accelerates collectors' professional growth. Over time, accountable collectors become increasingly effective, engaged and valuable.
There are three crucial aspects of A/R operations that will help providers better manage on-site and at-home collectors and bring accountability to the revenue cycle process:
• Visibility into collector performance – voice and data monitoring, dashboard displays, performance alerts and collector rankings
• Management of collector performance – automated QA tasks, audits and data, for more relevant scorecards
• Improvement of collector performance – work queue scheduling, insurance hold manager, look-ahead functionality, and access to dynamic content for improved adherence to varying state regulations
Accountability in A/R: Essential to have, easy to achieve
As labor costs rise and reimbursements shrink, many A/R operations aren't serving their essential purpose. Instead of being a net plus for large healthcare providers, they're inhibiting these providers' ability to make headway.
By now, most providers have invested heavily in new EHR systems, which have helped transform healthcare delivery, operations and RCM. But big questions about collector performance remain. Constant hiring and onboarding, bare-bones training, and inadequate tools and support continue to take their toll.
Fortunately, this problem isn't intractable. And it needn't be painful to fix. There is a cost-effective, EHR-friendly, easy-to-implement solution that complements and enhances existing functions and Doesn't initiate or require changes to host processes or workflow.
The Artiva MagnifyTM solution from Ontario Systems works in harmony with existing EHRs to provide that missing piece providers need: effective A/R team management and tools that bring accountability to the revenue cycle process. When collectors finally have what they need to work better, smarter and faster — and become more engaged, motivated and loyal — providers are bound to see healthier returns.
Ontario Systems is a leading provider of healthcare revenue cycle management software. Its comprehensive Artiva HCxTM solution enables providers to aggregate data from multiple systems for streamlined patient responsibility, insurance follow-up, and denials management. The solution provides exception-based workflows, automated claim statusing, and integrated embed- ded data enhancement ensuring the highest yield accounts are worked, productivity is improved, and there is a reduced cost to collect, all through a singular process for the business office. Providers looking to boost collector productivity and improve QA turn to the Artiva MagnifyTM solution. With a simple implementation that can be completed in as little as 60 days, the Artiva Magnify solution shortens payer hold time and ensures collectors work multiple claims per call; monitors collectors' activity whether they're on one site, multiple sites, or working from home; and complements an existing EHR with real-time reporting dashboards that allow measurement of key performance indicators.