By Paul Shorrosh
Hospitals have taken a severe financial blow over the past several weeks because they were required to postpone profitable elective procedures and office visits in order to meet a predicted surge in COVID-19 patients. As hospitals across the country begin to restart elective surgeries based on CDC guidelines, it’s more critical than ever the revenue cycle process is managed in the most efficient and customer-friendly way possible. To help ensure revenue from elective procedures is maximized, hospitals must minimize the opportunity for profit dilution.
So, what is profit dilution? Put simply, profit dilution occurs when anything that is avoidable or unnecessary either delays payment or adds to the cost the hospital incurs to receive payment. In the revenue cycle, contributors to profit dilution include failing to collect payment prior to service, the cost of recovering delayed or denied payments, labor costs associated with reworking issues after bills have been generated or collections costs.
By implementing software that uses automation, machine-learning, predictive analytics and other components of artificial intelligence to complement EHRs hospitals can address these issues on the front-end of the revenue cycle and reduce profit dilution dramatically. Unfortunately, many hospitals and health systems continue to invest more heavily on the middle and back end, points at which the revenue cycle has already broken down and profit has unnecessarily been reduced, or diluted.
As organizations struggle with how to further reduce cost without negatively impacting care outcomes and patient satisfaction, shifting focus to the front end of the revenue cycle can change the unnecessarily wasteful historical paradigm and simultaneously improve patient engagement.
Thwarting profit dilution
The traditional investment of time and money on the revenue cycle’s middle (admission and treatment, coding, and billing functions) and back end (appeals, patient billing and collection) means hospitals miss numerous opportunities to expedite payment and eliminate rework, wasted time and cost in the cycle. While missteps at any point in the revenue cycle take a bite out of each dollar, mistakes and missed opportunities at the front end can be more costly to fix the further into the revenue cycle they persist. Therefore, the front end is where organizations can reap the most impact from investing in AI-powered software that trains and scripts registrars, analyzes and learns from remits based on what physicians actually ordered and accurately estimates a patient’s share of the bill prior to service.
Profit dilution stems directly from issues not addressed during pre-registration, registration, insurance eligibility verification and authorization, which under ideal circumstances all take place at the front end. AI-powered solutions that can audit 100% of accounts to identify issues, suggest corrections and verify changes can dramatically decrease preventable errors, denials, and cost to collect.
Such solutions empower front-end staff to significantly increase net revenue by collecting and clearing payer requirements prior to patient service, where cost to collect is at its lowest. The best such software generates alerts only if action is required correct mistakes or omissions identified at patient access.
Transformative solutions like these use predictive analytics and exception-based workflow that hold staff accountable to self-correct, which lessens the time it takes to collect balances owed and improves the patient financial experience. Exception-based workflow means revenue cycle staff is alerted to touch an account only after issues have been identified. If an account is clean and accurate, it does not show up in a registrar’s work queue.
Patient access teams need software that continuously updates to help staff discover and fix preventable front-end errors that propagate as the revenue cycle lengthens. The concept is simple and worth the effort but requires action, training and most importantly, a shift in approach from revenue cycle leadership. By reducing or repairing these errors at the front-end, you shift from managing a myriad of issues later in the revenue cycle to preventing profit dilution before it ever occurs.
Paul Shorrosh is the CEO and founder of AccuReg, a front-end revenue cycle intelligence company. He has more than 20 years of revenue cycle management experience.
Healthcare Business Today is a leading online publication that covers the business of healthcare. Our stories are written from those who are entrenched in this field and helping to shape the future of this industry. Healthcare Business Today offers readers access to fresh developments in health, medicine, science, and technology as well as the latest in patient news, with an emphasis on how these developments affect our lives.