Getting the Money

Updated on December 13, 2023

Data Analytics Helps Healthcare Providers Manage Revenue Cycles and Collect Payments More Effectively

A sound strategy for revenue cycle management (RCM) enables healthcare providers to collect payments from insurance companies and patients in a timely and effective manner. Most medical practices already have an RCM system. But, often, they need a better one.

The complicated world of claims filing and coding can make it hard to stay profitable. At least, not without help.

Enter data analytics, which offers invaluable insights into revenue cycle management that you can access with an RCM dashboard. The dashboard displays critical data on key performance indicators like days sales outstanding, net collection rate, and denial rate.

 By leveraging data analytics and RCM dashboards, healthcare organizations can gain valuable insights into their revenue cycle performance, enabling them to optimize processes, reduce costs, and improve patient care.

Evidence and Precision

Whether your organization is fine-tuning billing processes, negotiating payer contracts, or streamlining collections, an analytics-empowered RCM dashboard should provide the concrete evidence that enables strategic planners to move beyond intuition and anecdotes.

Data analytics enables you to identify bottlenecks, forecast trends, and apply data-driven strategies so that your healthcare organization can optimize processes, improve patient care, reduce costs, and become financially healthier.

Finding Bottlenecks

With the help of data analytics, you can zero in on bottlenecks in the revenue cycle. By analyzing key performance indicators and transactional data, your healthcare organization acquires a granular understanding of what’s causing inefficiency and delays, whether it’s claims processing, denials, patient billing, or something else.

Finding Problems With Coding

The battle over reimbursement is intensifying as the impact of billing codes on physician payments becomes inescapable. With boarding in emergency departments on the rise due to scarcity of inpatient beds, more extensive treatment is happening in the ED itself, treatment that would normally be confined to an inpatient setting. An advanced RCM tool gives emergency physicians the structured and unstructured data that they need to tell their side of the story as fully and persuasively as possible during negotiations.

Another problem is under-coding or over-coding. A relatively high denial rate or low reimbursement rate for certain procedures may be a sign of inaccurate coding. In emergency departments, personnel must act fast and precisely, which means that they must rely heavily on data. Because of its complexity, ED billing is susceptible to high error rates. Data analytics identifies anomalies and provides the clinical data that you need to make the case for more accurate coding practices.

Improving Operational Efficiency

The insights embedded in your revenue cycle data can help you streamline operations, improve workflow, and boost revenue.

Review denial rates. More and more claims are being denied; from 2016 to 2020, hospitals experienced a 23 percent surge in denied claims. Review denial rates over time by insurance payer and by reason for the denial to uncover problems with registration, coding, or billing processes that need to be addressed. Work with teams to improve training or update policies and procedures.

Review aging accounts receivable. Reports of aging accounts receivable show how long it’s taking to collect payments. If you find that claims are taking too long to be resolved, work with billing staff to expedite billing and resolution. You may need to revise fee schedules or payment plans.

Review the effectiveness of claim scrubbers. If you use a claim scrubber to check claims for errors before submitting them to payers, analyze how many claims are being rejected for preventable reasons. A high number may mean that your scrubber needs to be optimized with more accurate rule sets. Work with your vendor to do this or switch to a new scrubber with a higher rate of accepted claims.

Review key performance indicators and set targets. Look at key performance indicators like days in accounts receivable, denial rates, and net collection rates to see how they compare to industry benchmarks. Then set measurable targets for improvement. For example, you could work to reduce days in accounts receivable by 10% year over year or to increase net collections by 5% year over year.

Predict Trends. By analyzing historical data and patterns, you can forecast trends in the revenue cycle of your organization — trends in patient volume, payer behavior, and reimbursement models. This foresight enables you to appropriately plan for upcoming challenges.

Revolutionizing Revenue Cycles

In the ever-evolving landscape of healthcare, the integration of data analytics into revenue cycle management (RCM) is no longer optional but a strategic imperative for organizations seeking not only survival but prosperity. Traditional RCM approaches struggle with the complexities of modern healthcare systems, from intricate coding structures to shifting reimbursement models. Data analytics becomes a transformative force, providing comprehensive insights into key performance indicators, uncovering bottlenecks, and anticipating trends that shape the financial health of the institution.

The imperative of data analytics extends beyond addressing current challenges; it’s a forward-looking strategy. By analyzing historical data, healthcare organizations can predict trends, anticipate payer behaviors, and proactively plan for shifts in reimbursement models. This foresight, coupled with the optimization of operational efficiency through analytics, positions organizations to not only adapt to the evolving landscape but also thrive in a data-driven revolution. Embracing data analytics isn’t just about staying current; it’s a strategic necessity for future-proofing financial operations, ensuring sustained viability, and positioning healthcare institutions at the forefront of the RCM paradigm shift.

The Editorial Team at Healthcare Business Today is made up of skilled healthcare writers and experts, led by our managing editor, Daniel Casciato, who has over 25 years of experience in healthcare writing. Since 1998, we have produced compelling and informative content for numerous publications, establishing ourselves as a trusted resource for health and wellness information. We offer readers access to fresh health, medicine, science, and technology developments and the latest in patient news, emphasizing how these developments affect our lives.