Mar 21
2023
Revenue Integrity Trends To Support A Post-Pandemic Bounce-Back
By Ritesh Ramesh, COO, MDaudit.
Healthcare organizations undoubtedly felt a sense of relief as 2022 faded in the distance, taking with it a devastating financial performance that resulted in negative profit margins for more than half of U.S. hospitals – the worst year hospitals have faced since the start of the pandemic, according to Kaufman Hall. Not only were operating margins down for most of 2022, but hospitals also struggled with higher labor costs in a more competitive market plagued by chronic clinical and administrative skill shortages.
Physician practices fared no better, with 90% saying that soaring expenses outpaced revenues last year, according to a survey by the Medical Group Management Association. Staffing and labor costs were cited most often as the source of rising costs. Other common culprits were lower reimbursement rates, significant increases in lab supply and drug costs, higher utility costs, lower patient volumes, and rising malpractice premiums.
The new year does not mean healthcare organizations are out of the financial woods, however. A plethora of new challenges to the bottom line have emerged, led by a sharp uptick in third-party audits. Supported by a $2.5 billion budget for the Healthcare Fraud and Abuse Control and Medicaid Integrity programs, federal payers are stepping up both pre-payment and retrospective claim audits – and private payers are following suit. This not only increases the risk of penalties and claw backs, but it also slows claims processing and, subsequently, reimbursements and puts greater pressure on providers to submit clean claims the first time.
Five Revenue Integrity Trends
To avoid a repeat of 2022’s dismal financial performance, revenue integrity leaders surveyed by MDaudit are placing a priority on revenue opportunities (34%), compliance pressures (29%), revenue risks (29%), and staffing issues (9%). For 37% of respondents, all these issues are top of mind for 2023.
These concerns align closely with the focus on growth, revenue, and profitability that dominate most organizational planning – and is evident in the following key revenue integrity trends identified in the 2022 Annual Benchmark Report.