3 Strategies for Getting Your Revenue Cycle Management Back on Track

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Abstraction on a theme business. Vector illustrations

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By Terry Blessing III

Revenue cycle management (RCM) has always been a challenge for most hospitals, physician offices, and other healthcare organizations. Coding issues and errors that lead to denials, a billing landscape that has shifted more of the burden to direct consumer payment, and ever-changing reimbursement rules and schedules from the Centers for Medicare and Medicaid Services (CMS) as well as commercial health plans are just some of the concerns healthcare providers face in getting paid what they’re due. 

Then came the COVID-19 global pandemic. In most industries, a sudden influx of “customers” would be a Gold Rush. But in this case, that increased demand for low-profit services meant shutting down or reducing more profitable areas, such as elective surgeries. In many cases it also meant reducing the RCM staff dedicated to generating invoices, following up on delinquent accounts, working denials and performing the many other tasks required to keep healthcare organizations financially solid. 

There is good news and there is more good news in all of this, however. The first good news is that the U.S. looks to be on the brink of coming out of the pandemic. The availability of multiple COVID-19 vaccines is expected to create herd immunity by the end of the summer of 2021 and allow a return to “normality” by the end of the year. All of which will make it safe to offer more revenue-generating services once again. 

The other good news is that the post-pandemic period creates the perfect time for healthcare organizations to re-imagine how they want their RCM departments to operate. Hospitals, physician practices and other healthcare organizations have fallen far behind in many RCM activities and need to catch up. Yet because of previous reductions, many have more flexibility in how they want to approach it. Rather than just resuming business as usual, i.e., hire more people and do what they’ve always done, here are some strategies healthcare organizations should consider to not only catch up but improve on the way they manage the revenue cycle. 

Adopt robotic process automation

Much of the RCM work even in otherwise technologically advanced healthcare organizations has traditionally been performed by humans. Yet this approach has many limitations. Humans can only process so much work, and work for so long. When things change, each person must be re-trained, which can lead to varying results. Humans are also prone to making errors. 

Robotic process automation (RPA) systems eliminate those issues – and more. They can run 24/7 and don’t need breaks, sick leave, vacation or benefits, making them more efficient as well as less costly in the long term. It might take six weeks to train a new employee to process 50 to 100 claims in a day; in that same time a bot can be built to process 1,000 per hour. Since bots take the data directly from the feed they don’t make data entry errors either. And when things such as reimbursement schedules or codes change, the entire system can be updated as soon as the new information is available. 

That doesn’t mean they can run completely independently, at least at this point; you will still need humans to oversee the technology. But one human can oversee multiple instances and take care of anything that goes wrong. 

You will also need humans to manage the exceptions. But as artificial intelligence (AI) and machine learning (ML) become more sophisticated, the number of unresolved exceptions will be reduced, creating even greater efficiency in the revenue cycle. 

Consider an outsourced partner to augment internal staff

Even if they implement RPA, as activity begins to ramp up healthcare organizations will need to determine whether to hire internal staff or outsource at least some RCM activities to a partner to manage the higher volume. This is not a decision that should be left to “gut feel” or opinion. 

The first thing healthcare organizations should do is gain a better understanding of what it costs them to process a claim from primary billing through final adjudication and then zero balance.  They can then look at what it would take to perform certain tasks internally versus hiring a partner to take them on. 

In some cases, they may find it is more effective to outsource at least some areas to a partner. This analysis should not be a one-time effort either. 

Reimbursement rates and rules are constantly changing. For example, no one is sure whether or when the dollars CMS put forth to help hospitals and other providers deliver care to COVID-19 patients will be reduced or eliminated. Evaluating the real costs to process claims end-to-end on a regular basis will ensure healthcare organizations are spending the least to collect the most. 

This thinking also applies to knowing which outstanding payments are worth pursuing. Spending $7 to collect on a $4 outstanding balance is a losing proposition. Knowing what it costs to perform each action, and understanding where the point of diminishing returns lies, will help healthcare organizations direct their efforts where they will yield the greatest benefits. 

Give leaders more visibility into the pain points

Whether you are hiring more people, implementing technology, outsourcing or some combination of all three, it can take time to get everything ramped up. In the meantime, once things open up again the volume of RCM activities is likely to outpace the resources available to manage them. 

This means leaders will need granular analytics to help them see the pain points all the way down to the claims level so they can set priorities. Especially since they may have to work some of those claims themselves. 

The more they can see where revenue losses and holdups are, or areas where more claims are being denied or sent back for rework, the better job they can do of keeping revenue on track to ensure the healthcare organization has enough operating capital to keep the doors open. Those analytics will also help them see where they need additional help so they can make better decisions about where to obtain it. 

Moving forward

The COVID-19 pandemic was a huge disruptive force not just on the clinical side but on the business side as well. And its effects are still being felt. 

As we come out of it, however, this disruption gives healthcare organizations the opportunity to determine whether to return to the prior status quo or move in a new direction that will prepare them for greater success in the future. 

Terry Blessing III is SVP of Client Development at VisiQuate, an advanced analytics technology and service company that helps some of the country’s best-known healthcare providers and medical device makers achieve peak business health through yield improvement and cost optimization. VisiQuate recently announced its Velocity Consulting Group, making its highly respected revenue cycle and data experts available for consulting engagements.

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