The U.S. healthcare system is undergoing a major transformation, from many freestanding hospitals and individual practices to fewer large, integrated healthcare systems. One motivating factor is the promise of greater efficiencies when it comes to delivering more holistic patient care and improving core operational processes.
Revenue cycle management is one process that’s primed for improvement. Poor billing practices can cost hospitals millions of dollars due to lost reimbursement or the imposition of fines, which can undermine patient care quality and erode the operational advantages that expansions and mergers were intended to create. What are the ongoing trends making revenue cycle management so challenging?
Disjointed front-end and back-end processes – Revenue cycle management is traditionally separated into front- and back-end functions. The front-end is patient-facing and includes administration, intake documents and the confirmation of coverage eligibility, while the back-end includes payer coordination, claims reimbursement, denial communications and ultimately, collection.
With patients assuming more responsibility for out-of-pocket expenses, the first step to improving the revenue cycle is maximizing patient collections. The best chance for this lies in collecting payments as early as possible in the patient interaction. According to one recent survey, 85 percent of healthcare organizations say that collecting payments from patients after they have left the facility is a difficult task. Hospitals need to commence billing processes immediately at patient admission, which requires better integration between front- and back-end workflows. Electronic or digitally-based workflows are intrinsically more efficient and secure than paper-based workflows since they don’t rely on paper passing hands and because there is less risk of document misplacement.
IT and Toolset Limitations – Successful revenue cycle management has traditionally depended on a strong supporting healthcare IT infrastructure as well as a solid base of highly fluent administrative knowledge workers, who understand the intricacies of working with various types of payers. Unfortunately, many hospitals do not have the resources to invest in the dedicated on-site infrastructure needed to expedite revenue collection and claims management.
Hospitals should also train staff members to code and submit claims as accurately and efficiently as possible. The lack of training is often the difference between a fast, efficient claims reimbursement and a potentially time-consuming kick-back. It is also important for knowledge workers to have “DIY” capabilities when it comes to directly hand-picking their own workflow functions to secure the capabilities they need quickly. Back-end staff may include an electronic signature capability in their workflow, which allows supervisors to verify the authenticity of a claim and sign-off, even if they are traveling or on a mobile device. If software tool is available as part of a larger, pre-approved menu, this will also reduce the threat of “shadow IT” – when staff use technology without IT being aware.
Lack of automation – Paper remains ubiquitous in the healthcare enterprise, particularly in the admissions process. Better revenue cycle management requires faster, more efficient digitization of paper-based documents. It is particularly important to quickly incorporate insurance details contained in these documents into streamlined digital workflows.
Revenue cycle management can be made more efficient by automating manual data entry. Document conversion and classification can easily convert paper documents to digital form in bulk and route the data to appropriate electronic files and personnel for processing. Advances in machine learning soon will enable scanners to “read” and identify characteristics specific to certain documents. For example, the technology could identify an insurance policy, and route the information appropriately while streamlining the entire claims submission process.
Poor provider/payer collaboration – Forward-thinking hospitals are creating new types of streamlined payment processes whose workflows are similar to those integrating front- and back-end claims processing.
Tailored workflows can address the unique requirements of individual payers, enabling information exchange and critical communications through a highly secure, digital process. For example, different payers may use a different chain of command or steps for reimbursement approvals. Workflows can be created and modified to adhere to acknowledge this. These provider/payer frameworks also provide end-to-end visibility across the claim lifecycle, allowing providers to take appropriate action to improve collection processes – for instance, identifying and addressing late reimbursements. Increased automation plays a role here as well by alerting knowledge workers when a particular claim reimbursement is complete, or automatically flagging problems and their source.
While the challenges of improving revenue cycle management are abundant, and many organizations aren’t sure where to begin, certain threads are common. These include the need for tighter workflow integration (both within an organization and between payers and providers) and greater empowerment of knowledge workers through automation and simplified workflows. Effective revenue cycle management is critical to the success of the healthcare enterprise in its mission to promote high standards of patient care and satisfaction and operational excellence. Most organizations have room for improvement, and the capabilities described here are a good starting point.
Stacy Leidwinger, VP of Product, leads the team driving product innovation within Nuance’s Document Imaging Division. She oversees the product roadmap and all phases of the product lifecycle with the goal of planning, launching and managing best of breed software products.