March 17, 2020
Revenue Cycle Management (RCM) is a hot topic in healthcare as hospital leaders grapple with changes to coverage and reimbursement models that significantly impact RCM. High deductible health plans put patients on the hook for a greater percentage of total costs, further magnifying the issue of collections. Meanwhile, denials continue to be the number one RCM challenge hospitals face, according to a HIMSS Analytics survey.
In order for hospitals and health systems to maintain a strong revenue cycle, they need to be firing on all cylinders throughout the process of capturing, managing and collecting patient revenue. But what happens when you feel your RCM just isn’t measuring up? It might be time to take a hard look at the top three factors that generally impede success.
1. RCM Technology: Ineffective systems and too many bolt-on solutions
For some hospitals, the biggest challenge lies in RCM technology.
According to a recent Black Book survey, 26 percent of hospitals nationwide still operate without an effective RCM solution, notwithstanding evidence that shows how such systems positively impact performance and revenue.
Effective and robust RCM technology benefits hospitals in many different ways. It helps streamline productivity and reduces the time it takes to collect payments by tracking claims and rapidly addressing issues throughout its life cycle. By automating administrative responsibilities, an RCM system saves time and diminishes human error. An effective RCM also greatly reduces claims denials, which commonly occur because of insufficient documentation and claims defects.
However, not all RCM technology is created equal; unfortunately, some hospitals remain on outdated and inefficient systems. It’s important for hospitals to assess their RCM systems to determine if they fit their needs, play nice with other systems (including EHRs), and ultimately drive increased revenue.
Too many RCM solutions is another challenge hospitals face. Whether a galaxy of interfaced solutions or a core system with bolt-on applications, an excess of RCM tools yields unwanted errors and costly complexities. According to HIMSS Analytics, among hospitals that have the most difficulty with denials, a whopping 72.5 percent used three or more RCM solutions. With a seamlessly integrated RCM solution, analytics can identify paths to avoiding denials and similar issues.
2. Revenue Cycle Outsourcing = Buyer’s Remorse?
While revenue cycle outsourcing (RCO) is a viable option for some healthcare organizations, it isn’t a good fit for all.
Hospitals opting to go this route expect that outsourcing will lower costs and alleviate resource strains. However, according to KLAS’s Outsourced Revenue Cycle Services 2019 market report, one third of healthcare organizations utilizing RCO services said they have buyer’s remorse and would not purchase the vendor’s services again. An even greater number reported a high level of dissatisfaction with their full revenue cycle outsourcing solution.
With regards to specific vendors, the report said that 70 percent of Cerner clients would not use their revenue cycle outsourcing services again.
The biggest complaints about some revenue cycle outsourcing vendors include high costs, poor performance and disappointing revenue gains.
3. In-house RCM
Maybe you have a rock star RCM team in place that has extensive revenue cycle experience and produces amazing results. If so, tell them to keep up the good work!
However, many hospitals simply don’t have the resources required to support the magnitude of RCM complexities. The U.S. Bureau of Labor Statistics estimates that demand for medical records and health information technicians is expected to rise by 15 percent between 2014 and 2024. This increase, combined with the lack of qualified workers in these areas, means most hospitals are struggling to fill positions, especially in specific geographical areas.
Hospitals with adequate staff in place need to ensure that their RCM teams have the right expertise and follow optimal processes, and that they can keep up with changing regulations. Some hospitals may be good at handling routine but struggle with exceptions like denials.
According to Becker’s Hospital Review, health professionals estimate that as much as 80 percent of medical bills contain errors. Unresolved errors and the lack of a good process for monitoring claims can result in denials, accounts receivable delays and high administrative costs.
Workers compensation billing and interstate auto insurance claims are other complicated areas that RCM staff may not be equipped to adequately address. Your team will need to keep up with different state requirements, as well as insurance and other frequently changing regulations, in order to be compliant, which can be expensive and time consuming.
If your hospital’s RCM system isn’t performing, here are two things to consider as you strategize which direction your organization should take to put you on the path to success.
1. Software-as-a-Service (SaaS) models are increasingly popular in healthcare. According to a recent survey of College of Health Information Management Executives (CHIME) members by Spok, some of the top drivers of SaaS model adoption include reduced costs (71 percent), easier upgrades (62 percent), improved accessibility (59 percent), and more predictable expenditures (50 percent). Furthermore, 81 percent of respondents said their SaaS deployments went as or better than expected.
It may be worthwhile to take a look at SaaS RCM vendors as an alternative. Not only is the SaaS option economical thanks to little or no capital investment, some platforms also eliminate the need for bolt-on solutions through integrated functionality such as real-time eligibility checking, integrated claims processing and business analytics.
2. Service Level Agreements (SLAs) can be the key to RCM success. SLAs ensure high quality, consistent performance and should be an integral part of implementation and support for any RCM solution. When evaluating SLAs, make sure they include experienced professional services team members that act as an extension of your organization, allowing you to expand service delivery capacity without increasing the headcount.
A solid SLA also enables easy tracking of your performance against key performance indicators (KPIs) on a regular basis via dashboards and scorecards, as well as providing a mechanism for continuous RCM process improvement.
Perhaps your existing RCM technology and support have failed miserably, or maybe you just need better technology to help your in-house staff improve performance. Either way, you have viable, convenient and high-performing RCM options to choose from.
Interested in learning about a refreshing approach to RCM? Medsphere’s RCM Cloud empowers healthcare organizations to drive sustained change and profitability through a combination of knowledge, solutions, experienced RCM experts that act as an extension of your organization, robust SLAs, and an economical cost model.