Reimagining the revenue cycle with robotic process automation

Updated on September 10, 2023

Artificial intelligence (AI) innovations that once seemed like pipe dreams are now being put into practice, from patient-facing chatbots to clinical decision support. While clinical AI solutions generate a lot of buzz, healthcare organizations also have opportunities to evolve business operations with AI.

More specifically, the revenue cycle is ripe for change through robotic process automation (RPA), a software bot developed using AI and machine learning (ML) that replicates actions and workflows typically performed by a human.

Here are three considerations to keep in mind when determining if RPA is right for your organization and how best to bring it into your business office.

Facing financial obstacles

Several market influences are driving healthcare leaders to find creative ways, such as RPA, to contain costs. According to a Kaufman Hall report, about half of U.S. hospitals had negative margins at the end of 2022—the worst year financially since the start of the COVID-19 pandemic.

A major cause of shrinking margins is the clinician shortage, which has pushed hospitals to hire contract workers and offer excess overtime. These and other costly measures resulted in a 20.8% increase in hospital and health system labor expenses from 2019 to 2022. Additionally, the prices of prescription drugs and medical and surgical supplies have risen at overwhelming rates over the last few years.

Given that the rise in these expenses is largely beyond the control of individual healthcare organizations, they must find ways within their control to improve margins. And implementing RPA is one way to speed up cash flow and reduce unnecessary waste within the revenue cycle.

Making the revenue cycle manageable

RPA automates repetitive and rules-based tasks, making it well-suited for many revenue cycle management (RCM) functions like claim processing, insurance verification and denial management. By automating these tasks, healthcare organizations can improve efficiencies, reduce errors and free up staff time for more complex and high-value tasks, ultimately leading to better cost savings and improved financial performance. (Not to mention that bots can work 24/7, 365 days a year.) Additionally, the business office has not been immune to staffing shortages, making RPA an effective way to help offload more tedious tasks from staff members.

It costs hospitals dozens, if not hundreds of dollars to correct and resubmit claims. This may not seem significant for a single denial, but taken together, consistent errors in the revenue cycle can really add up. Additionally, an American Hospital Association (AHA) survey found that 89% of hospital and health system professionals said they experienced a significant increase in denials over a three-year period. To mitigate the effects of this trend, hospitals can leverage RPA to correct claims before they’re out the door, thereby reducing denials and increasing speed to reimbursement.

Preparing for potential challenges

When exploring how best to bring bots into the revenue cycle, there are multiple factors to consider. First, RPA is not a one-size-fits-all solution. Each healthcare organization has its own needs, policies and regulations to bear in mind. Wherever you land, tailor the implementation to your organization’s goals and your teams’ preferences. Additionally, staff members may initially be reluctant to accept this change; be sure to share the ways it will relieve some of their burdens, make processes run more smoothly and help their team and the overall organization.

Finally, there are challenges and risks inherent to many IT implementations to be mindful of, such as data security and privacy concerns. Additionally, monitor for any flaws in the automation process so you do not bring errors into your revenue cycle.

RPA is not a silver bullet, but it can enhance operational efficiency and bring healthcare organizations greater financial stability. And in this ever-changing industry, that is truly invaluable.

Jay Adams
Jay Adams

Jay Adams is Executive Vice President, OS Management at Altera Digital Health.

Jaimes Blunt
Jaimes Blunt

Jaimes Blunt is Senior Vice President, Solution Development & Delivery at Altera Digital Health