By Matt Bridge, senior vice president – Strategy and Solutions, AGS Health.
Optimizing financial clearance and other patient access operations is an important aspect of any strategy to offset revenue cycle issues that are behind more than half of all claim denials. Healthcare organizations struggle to do so, however, thanks to staffing and technology limitations that impede efficient operational processes and increase front-end authorization errors.
Those barriers are starting to crumble as artificial intelligence (AI) and automation become more deeply embedded in healthcare revenue cycle management (RCM). Of particular note is the emerging subset of tools designed to streamline and expedite aspects of financial clearance operations, including eligibility and benefits determination and prior authorization processes. Early adopters of these intelligent authorization tools are reporting rapid return on investment (ROI), including 70% to 85% faster eligibility and benefit determination and 85%-90% improvement in authorization determination time.
Also being reported are 65% to 80% less time on authorization initiation and authorization follow-up times that are up to 85% shorter, as well as 80% faster price estimating. The result of these improvements is not only higher revenue growth and employee retention, but an improved overall patient financial experience.
Challenges to Financial Clearance
Operational inefficiencies, outdated technology, and staffing limitations are among the main contributors to rising denial rates, which were up to nearly 12% in the first half of 2022. More than 41% of those denials are the result of front-end RCM issues, including eligibility, authorization, and other financial clearance activities, which also contribute to higher net revenue leakage via avoidable write-offs.
Breakdowns in the financial clearance process can also drive down patient experience scores, with one survey reporting that 93% of patient respondents indicated provider loyalties hinge on their financial experience and more than half said it also impacts their decision to refer a friend or family member. Forty-one percent said they’re unhappy with their overall medical billing experience, with many pointing to a lack of pricing transparency or certainty despite the No Surprises Act mandate to provide them with both.
One cause is the critical shortage of RCM professionals. More than 60% of providers face RCM staff shortages, and nearly half of CFOs and revenue cycle vice presidents from large health systems and physician groups say their labor shortages are severe, with four in 10 reporting vacancy rates between 51%-75%.
The opportunity to resolve these challenges while also eliminating error-prone manual processes from financial clearance is why nearly 80% of healthcare organizations surveyed are turning to AI and automation. Financial clearance and its redundant and time-consuming tasks is a prime candidate for AI and automation, with 42% of respondents to one survey saying their organization would benefit most if eligibility checks and prior authorizations were automated.