As an owner of a healthcare facility, you may know that the healthcare system in the US has been going through a rough patch for several years now. However, note that with all the existing issues, the healthcare system now faces its biggest challenge in decades: the COVID-19 health pandemic.
Did you know that many patients are postponing regular visits and even elective procedures? As a result, the COVID-19 pandemic has created a dire financial strain and plunged hospitals and emergency departments into unprecedented losses.
Note that even though many emergency departments in the US are equipped with the best and latest technologies, many still cannot get past their key operational inefficiencies, and the coronavirus has exacerbated these efficiencies.
Hospitals across the US continue to see a decline in revenues and cash flow from their Emergency Departments (EDs). There is no doubt that this decline in revenue and cash flow is having a considerable impact on hospitals’ ability to stay financially viable during these unprecedented times.
Also, there is an expectation that due to the increasing use of telehealth in the country, the additional volume will likely migrate away from the ED.
And that is not all; emergency medicine providers are now facing the possibility of new federal legislation that will protect patients from surprise medical bills, also known as “balance bills.” While emergency departments in hospitals are coping with these losses and challenges by laying off employees, note that they can considerably reduce costs and maximize revenue by focusing on their revenue cycles.
Importance of Revenue Cycle in Healthcare
Revenue cycle management, or RCM, is one of the most vital aspects of any healthcare provider, including emergency care providers. RCM is the series of events that begins when patients schedule their appointment and ends when the healthcare provider receives payment and gets reimbursed.
Since it is related closely to patient service revenue, RCM has a direct impact on any hospital’s or ED’s bottom line. If you optimize your hospital’s revenue cycle, you will benefit from higher margins. On the other hand, if you do not, you will face significant losses.
As the impact of COVID-19 continues to unfold, it is becoming abundantly clear we can no longer separate physical and fiscal care – patients cannot afford it. Provider payment systems and practice management solutions, too often regarded as an afterthought, can play a significant role in the financial well-being of patients by preventing the accumulation of debt and absorbed costs.
In the coming years, the lasting implications of the pandemic will no doubt result in a financial burden that compounds these challenges, creating an urgent need to streamline payments and administrative tasks on behalf of patients.
A Patient Need, Unfulfilled
The effect of inefficient and inflexible payments is best understood on a broad scale. According to a 2021 study by Rectangle Health and PYMNTS1, there is a significant disconnect between the payment solutions patients are interested in and the solutions they are offered. Per the study, 63% of patients are “very” or “extremely interested” in using payment plans, though only 44% were offered them. Many patients are also interested in access to digital payments, but they are not offered options either.
To put this financial disconnect into a medical equivalent, consider a patient with a heart condition who is dependent on the provider administering swift and decisive treatment. Waiting to get treatment would only exacerbate the issue and have potentially fatal consequences. Similarly, an inefficient practice management system that allows a patient to miss payments builds debt. The consequences in practice management, however, are not restricted to a single patient – others may absorb costs, too, build debt of their own and the entire practice can be put at risk.
Medical debt has a significant and well-documented impact on patient health. When patients miss payments, they are more likely to avoid their provider and assume they cannot afford to treat new health issues that emerge. A 2016 study by the Kaiser Family Foundation2 found that about three out of 10 patients reported problems getting health care they needed directly as a result of unpaid bills.
While some physicians are beginning to see patient visits return to pre-COVID-19 volume, many independent practices are still struggling. In fact, nearly nine in 10 practice owners or partners that responded to a recent survey indicated they were concerned about the future of their practices, and more than half of all respondents (54%) were “very concerned.”
Months of reduced activity, particularly at practices that suspended elective procedures in the spring, have taken a heavy toll on revenue. As a result, many practices are now compelled to take stopgap measures to contain costs.
High unemployment rates continue to create hardships that can strain patients’ finances. Even an indirect impact, such as a job loss sustained by another member in the household, can affect a patient’s willingness to seek needed treatment or impair their ability to pay for medical services.
To ensure patients can get access to the care they need, as well as their organization’s financial longevity, each health care provider needs to reassess their business strategy with an eye towards improvement in operations. The COVID-19 crisis has exposed many areas of inefficiencies that were already affecting revenues before the pandemic began.
Invest in operational efficiencies for better revenue management
Today, practices have less room for inefficiency and must take decisive steps to invest in technology that will drive increased efficiency at lower costs. Imperatives for a practice thrown into disarray by changes related to COVID-19 are to stabilize the practice by taking better control of the business process. This includes steps to strengthen contingency plans to minimize disruptions and reduce patient liability during the reimbursement lifecycle of the patient, while ensuring the safety of patients and staff during these challenging times.
Reducing patient liability is both a strategy and a desired outcome the practice should aim for as it fine-tunes its management of the revenue cycle, which extends from the patient’s initial appointment through successful payment collection.
The practice can reduce increases in aged receivables by greater attention to pre-visit efforts. Performing eligibility checks and verification of benefits sets expectations and provides improved financial transparency for the patient which sets the stage for a smoother patience experience.
Since the start of the COVID-19 outbreak, the healthcare industry has had to adapt to closures, adopt automated processes and utilize telehealth more than ever before. Providers have been inundated with patient messages, phone calls and payments; in need of mobile-first solutions and custom workflows.
Relatient, a SaaS-based patient engagement company, helped University Physicians’ Association (UPA) to revamp its patient billing process for medical practices across East Tennessee, streamlining revenue cycle management (RCM) operations and extending a patient-friendly financial experience to patients and caregivers. The result was a 43% increase in patient payments with mobile-first billing.
Flexibility is key to meeting patient needs, and Relatient granted UPA the ability to extend self-service tools like mobile payments to the majority of patients who want this kind of access without neglecting those who still prefer to interact over a phone call. In addition to Relatient’s work with UPA, there are many other simple, practical ways to improve the patient experience.
Anesthesia billing can be tremendously complicated. Small errors can result in delays and a failure to collect. To improve revenue cycles, we’ve compiled some key ideas that will make an impact on your billing and collections.
#1: How is the charge established?
There are a number of factors that can affect anesthesia billings, but the process can be broken down to a relatively simple formula. Charges are established by adding base units, time units, and modifiers, and then multiplying by your fee per unit. In other words:
(Base Unit + Time Units + Modifiers) x Fee Per Unit = Charge Amount
#2: Accurate Start and Stop Times
The industry follows Medicare’s definition for anesthesia billing start and stop times. Anesthesia billing start and stop times are based on the continual presence of an anesthesia provider. It is critically important to record accurate start and stop times. Do not round your time, and never guess when the start or stop time was.
#3: Understanding Billing Modifiers
Billing modifiers can have a big impact on your charge amounts. There are a number of modifiers that come into play including physical status, medical direction, anesthetic type, and add-on codes. These modifiers can affect your charge amounts in a variety of ways so it’s important to understand each modifier and the role they play in billing.
#4: Documentation is critical
Accurate documentation is the difference between success and failure in generating cashflow. You can have the best systems available, but if the information that you feed into the system is inaccurate or incomplete, your billings and collections will suffer. Pay close attention to your start and stop times and record them accurately. Keep up with the billing modifiers that we discussed in #3. If you log these accurately, your revenue cycle management is set up for success.
With the new year, healthcare c-suite members are taking a critical look at upcoming market movement to maintain a holistic view of their organizations’ needs. Discussing industry trends at the recent College of Healthcare Information Management Executives (CHIME) CIO Forum, Anna Pannier, senior director of Ascension Technologies at Ascension Saint Thomas, noted the significant change taking place in the value-based care and wellness marketplace as a top concern for healthcare organizations.
As healthcare leaders, like Pannier, look to stabilize their IT strategies and drive meaningful patient outcomes and operational efficiency, they should assess these five c-suite hot-button topics in the next year.
The shift in data analytics
As a more mainstream solution in the healthcare industry, data analytics is not considered the big “game changer” any longer, but it is still a significant investment focus for providers over the next year. Many healthcare facilities assume that once an analytics platform is implemented, they are ahead of the game. Unfortunately though, those same organizations fail to customize dashboards, continuously assess data, or really break down data insights for meaningful change and care decisions. Driving quality outcomes through data analytics to prepare for the future of population health risk management will be a large focus in proactive facilities.
Artificial Intelligence (AI)
Artificial intelligence and machine learning in healthcare has now surpassed data analytics on the new investment frontier. The industry has already seen AI application in pathology and radiology in the past year. Eighty percent of healthcare professionals believe that AI is helping to reduce physician burnout, according to a MIT Technology Review survey. Respondent hospitals said AI has increased patient consult time, improved team collaboration and boosted productivity through workflow enhancements.
Similar to data analytics, the CIO will need to work with leadership groups in both the clinical and business sides to determine AI use cases across their evolving organizations. Thought typically applied to clinical care, applying automation and AI on the operations side will drive workload transformation across key business functions.
Greater emphasis on patient engagement
With most organizations having a fully implemented EHR, healthcare organizations are looking to make the most of their long-term investment. Added pressure from value-based care documentation and reimbursement initiatives, as well as increased consumer expectations, drive emphasis on patient engagement. Yet, meaningfully connecting and interacting with healthcare consumers in their patient care plans still lacks.
In fact, pointing to limited or complicated instructions for the everyday patient, a study in the Journal of General Internal Medicine found that hospitals are not properly preparing patients to take advantage of patient portals. More healthcare organizations are now seeking around-the-clock direct patient portal support, as an extension of their IT service desk’s capabilities. This coupled with remote virtual monitoring will drive improved patient outcomes in the next year.
A key element in achieving end-to-end revenue cycle success in any healthcare operation is proper dedication and maintenance of workflow tools, and those systems that support processes that help organizations meet net revenue expectations.
Workflow optimization and the deployment of tools should be viewed from four perspectives: People, process, technology and metrics/KPIs/reporting.
It is incumbent on healthcare organizations to explore each of these areas related to RCM workflow optimization and consider relevant questions before deploying a fresh approach to workflow processes and automation. First, they must recognize that a balance of concentration of these four components is needed when building operational effectiveness and for the success of workflow strategy, tools and support systems. Furthermore, it is critical for RCM workflows (front, middle and backend) to reflect the uniqueness (location, size, demographics, payer mix, etc.) of the organization.
While there are many benchmarks and strategies in the industry that an organization can follow, adapt to or adopt, the specific characteristics of the organization – whether it’s a rural versus urban facility, the size and makeup of its staff, budgets, effects of recent mergers and acquisitions, and more – must be inputs when building and maintaining effective workflow controls. Principally, dedication to establishing optimization in workflows within revenue cycle operations is a direct result of senior management’s objectives of lowering or maintaining organizational metrics involving departmental and organizational “cost to collect”.
Organizations’ achievement of desired “cost to collect” results comes from their empowerment of senior and middle management and line staff, adoption of sound strategies that are understood and embraced, provision of user-friendly processes and effective deployment of technology – as well as maintenance of technology in a manner that is adaptable and flexible to the user and the organization.
More importantly and in support the first three components, organizations pursuing workflow optimization must have a process in place for measuring and gauging the success of established RCM goals, as well as clear metrics. Metrics are where the rubber meets the road – they’re how organizations know whether the people, process and technology components are functioning efficiently and as intended.
As in any situation where there is a desire to get from one point to another effectively and efficiently, a sound understanding of how metrics support organizational expectations will inform the direction and strategy. It is also important to note that RCM workflow optimization is system agnostic. While each organization has different approaches to workflow support and automation, they need to look at this component relative to the system they have deployed as well as their own uniqueness.
With a dedicated, all-encompassing approach to workflow operations, organizations are better positioned to process patient access, improve eligibility/benefits verification administration processing, improve Point-of-Service (POS) collections, effectively manage claims loads, process appeals in a more timely manner and improve self-pay production and collections. They can also maintain proper coding requirements, improve overall processing, and possibly reduce denials or denial rates, all while improving overall aspects of the revenue cycle continuum to achieve organizational strategic and revenue goals.
While there is no off-the-shelf, cookie-cutter formula to deploy to achieve expected net revenues and RCM optimization, establishing and maintaining benchmarks consistent with the uniqueness of an organization is key to success.
Organizations must address many questions to understand whether workflow operations and technology are hitting the mark. While a holistic approach taking into account people, processes, technology, and metrics is fundamental for true system effectiveness and performance optimization, there are many considerations associated with each of these areas.
Does your staff have the capacity to perform production requirements needed for organizational success? Additionally, in deploying resources, are team members in the right positions? Are there leaders who can enable others’ success?
Do all RCM staff fully understand their roles relative to the RCM end-to-end continuum? Are staff interchangeable or cross-trained to increase operational understanding or in preparation to fill unexpected gaps?
Does RCM management deploy outsource resources as a stopgap measure?
Are teams looking at “root cause” issues that will affect workflow production goals and objectives?
In the case of new RCM systems and upgrades to present systems, are workflow processes reviewed or challenged with respect to potential changes in technology?
Are RCM operational workflow processes interchangeable so that any new introducing effects do not create abnormalities, gaps, and workarounds?
Does the organization embrace outsourced help in achieving best practices in workflow processes?
Should the organization consider a central billing office if one does not exist?
While there are more questions organizations ought to consider in reviewing – and correcting – the effectiveness of the RCM continuum, the areas of people and process should guide the use of resources in the most efficient and effective manner. Furthermore, the structure of operations should allow for adaptable departments(s) and an environment that promotes the achievement of organizational goals and the ability to manage expected and unexpected changes.
By Joe Polaris, senior vice president of product and technology, R1 RCM.
This year promises many new opportunities to apply technology to improve the healthcare revenue cycle. The recent HIMSS conference, for instance, featured many exciting use cases for machine learning and artificial intelligence (AI). However, before rushing to implement any of the latest solutions, let’s step back for a moment.
While there is plenty of emerging revenue cycle technology, there is also still a fair amount of complexity when it comes to implementing these capabilities. Most organizations typically have a significant amount of disorganization to deal with on the back end of their billing processes, as well as disparate technology systems that don’t work together. Many organizational leaders also are growing tired of only achieving incremental improvements to the revenue cycle through stand-alone revenue cycle management (RCM) technology, especially with rising total administrative costs and cost to collect.
That means we simply cannot afford to implement “quick-fix” RCM technologies that fail to support future goals. In an industry known for emphasizing quarter-by-quarter financials, we must begin taking a longer view. Rather than trying to establish 2019 implementation priorities, think about using the rest of 2019 to set the foundation for a holistic RCM transformation.
Perhaps the question to ask this year is: “Where do we want to be in three years – in terms of process efficiency, cash flow and an experience that delights our patients?”
Map RCM to the patient journey
Answering that question requires a holistic assessment of the entire revenue cycle, especially as it relates to the patient journey. Although that’s not a small undertaking, it allows healthcare organizations to build a thoughtful, realistic roadmap for long-term RCM transformation. In turn, such planning helps organizations realize greater value from all their RCM technology investments. Consider these four steps:
Evaluate: Although some healthcare organizations are further along when it comes to more efficient and patient-centered RCM, most are just starting to explore due to a wide variety of situational limitations. Escaping such constraints will require you to map out the entire patient journey end-to-end. Then, look at the map to identify areas of potential revenue cycle satisfaction for patients, as well as their most significant pain points.
Plan: After evaluating your RCM strengths and weaknesses, prioritize those processes in which technology has the greatest potential to remove waste, create capacity or give back operational expense. When deciding which solutions to implement, remember to take a broader, longer-term focus. Your organization should avoid the temptation of “quick wins” and instead focus on a viable long-term path that will meet your holistic, collective objectives. By generating a long-term plan, you will also incrementally create business value and move toward a more well-defined end-state vision. The most impactful digital transformation might come from phasing in the adoption of a comprehensive platform, as well as combining digital self-service technology and other automation capabilities — some of which may take hold quickly, while others may require more time.
By Marvin Luz, senior director of revenue cycle management transformation, Greenway Health.
The move to value-based care not only impacts the approach providers take to serving their patients, but it also changes the way they document, account for, and bill patients — quickening billing cycles and creating a need for better cost containment.
Timely revenue cycle management (RCM) is essential for success in this new healthcare realm, but many practices still handle billing as if they were in the fee-for-service age. This leads to critical mistakes that cost them in the long run, including:
#1 – Lack of a defined process
Billing glitches originate in several areas of practice operations, especially during busy times. With many patients coming in and out of the office, important information may be miscommunicated, overlooked, or even lost. Practices must standardize their billing processes as a “cycle” that is clinically driven and embraced by staff.
#2 – Neglecting critical information
While managing every type of information contained in documents that practices require may seem overwhelming, providers must embrace this task to optimize revenue opportunities. For example, when organizations understand the nuances of payer contracts, they are in a better position to fully leverage payment and negotiations. Equally important is staying on top of edit reports, explanation of benefits forms, and other claims issues, while also making sure denied claims are reworked and resubmitted in a timely manner.
#3 – Failing to follow up
Providers employ a variety of strategies to improve collections, including appeals, tracers, collections letters, and payment plans. While these tactics are a good first step, many fall short due to lack of follow-up. Research conducted by Greenway Health found that only 62 percent of practices review delinquent claims, while just 59 percent of secondary claims are filed due to back office time constraints. Often, by the time a practice realizes a patient or payer has not responded, it’s too late to collect the money owed.
#4 Drowning in detail
Details are important, but when billing practices become all about them, organizations can neglect the bigger picture revenue opportunities. For example, if practices look for trends, such as repeated claims denials for the same services or claims that are denied for registration errors, processes can be reworked to avoid those common errors to occur in the future.
One ageless trend emerging for 2018 is the quest of hospitals, larger carriers and clinics to identify new revenue streams; not just managing revenue cycles, but creating them. The healthcare industry is now looking at revenue which can be generated through the interoperability of annual wellness visits (AWV), chronic care and service care transitions between physical and behavioral health services. Hospital systems and other healthcare facilities that can connect these services with technologies such as bi-directional information flow will benefit by offering these services and creating a new profit centers of revenue through reimbursements by CMS and private insurers.
These types of market drivers are noted in The Global Healthcare Revenue Cycle Management (RCM) Software Market report for 2017-2021, issued a few months ago. The report predicts that the global healthcare revenue cycle management (RCM) software market will grow at a CAGR of 4.50 percent during the period through 2021.
Healthcare service providers deploy automated systems to address RCM processes and to fill the payment gap that arises from the processes of medical billing and collections. However, the report points out IT applications such as hospital information system and EHR have outdated technology platforms that lack advanced functionalities needed to address RCM issues, causing hospitals and health systems to prefer to outsource these services due to the lack of interoperability between revenue cycle processes and workflows. This type of outsourcing drains hospital revenue.
Meanwhile, global business researcher Radiant Insights issued a study in November reporting that the healthcare information technology market will have growth through 2022 of close to $50 billion. Factors such as increasing focus on improving quality of care and clinical outcomes, rising need to reduce healthcare costs and minimize errors in medical facilities, along with government support for healthcare IT solutions will drive the market. Increasing adoption of technologically advanced software solutions including EHR and EHR connectivity systems, e-prescribing and clinical trial management software and clinical decision support systems is helping to improve healthcare productivity.
The study also cited the growth of cloud computing in the healthcare industry is improving real-time communication and data exchange. Interoperable systems and cloud computing are integrating healthcare systems at a rapid pace and are identifying infectious diseases and tracking the incidence as well as occurrence rates of chronic diseases.
Radiant Insights points to up-and-coming organizations such as Zoeticx, Inc., a provider of medical software, that has introduced a cloud app called ProVizion Wellness. This software can be beneficial for streamlining data integration for annual wellness visits by offering interoperability through bi-directional data flow. Hospitals and other healthcare facilities are benefiting by providing this service through private and government insurers. This system provides management capabilities for supporting tracking ability on population progress for AWVs. The report also mentioned prominent players operating in the healthcare information technology (IT) market include 3M Health Information Systems, Lexmark Healthcare, Conifer Health Solutions, and CSI Healthcare.
The Chemistry of Linking Unrelated Hospital IT Landscapes to Revenue
As the hospital revenue trend for 2018 looks promising, we are still facing the same old interoperability issues despite the advances in technology pointed out in the previously mentioned research. What can hospitals and clinics do to be a revenue leader? As we move into 2018, it might be a good time to examine what is necessary to solve a complex problem like the ability of hospitals to link interoperability and the benefits that arise from adopting tools, technologies and concepts from unrelated landscapes.
When we look at the value generated in healthcare, we remain enamored with acute care administration to address patients’ concerns with a new illness or exacerbation of a chronic condition. One of the stated goals of widespread EHR adoption was to assist in this aspect of care. EHRs are being used to capture patient data, as well as to label and extract detailed metrics in an attempt to quantify the amount and quality of the care delivered, irrespective of the geographic and temporal boundaries of where the data was captured. The design of EHR’s is to allow for capture and subsequent analysis and billing for the care delivered.
However, the value of health IT lies in the robustness of applications. This might seem obvious since most of the technology we have direct experience with relies on the applications which drive value such as cloud based assets. For hospitals, investing in an application seems more prudent then investing in a protocol. However, by looking at the problems faced in healthcare, changing the perspective of the problem from an application-centric one to that of a protocol-centric view brings new revenue possibilities.