Analysts estimate that hospitals and health systems in the United States could collectively lose $53 billion in revenue this year. And thatโs an optimistic assessment. Even before the COVID pandemic, hospitals in the U.S. were experiencing downward revenue pressure from both government and commercial payers.
Strong financial performance is essential more than ever for healthcare providers. Hospitals, health systems, and physician practices must not only strive to increase patient volume but also maintain a strong revenue cycle.
How is this achieved? Through streamlined revenue cycle management (RCM). As the Healthcare Business Management Association (HBMA) describes, RCM is the administration of financial transactions that result from the medical encounters between a patient and a provider, facility, and/or supplier. These transactions include, without limitation, billing, collections, payer contracting, provider enrollment, coding, data analytics, management, and compliance.
As described in a previous blog, optimized RCM serves as a lynchpin for the success and profitability of healthcare organizations, helping to track and predict cash flow, process claims, and propel the business forward. An end-to-end revenue cycle should include patient registration all the way through to the final payment of a balance. This process can be time-consuming and complex, but the lack of a detailed revenue cycle strategy can result in reimbursement delays, poor cash flow, and overall weak financial performance.
Revenue Cycle Management Roadblocks
Streamlining and automating revenue cycle functions enables healthcare providers to standardize payment processing, reconciliation, and denials management, all while allowing them to focus on patient care. However, there are numerous challenges to maintaining a strong revenue cycle.
One such issue is patient leakage, which often is due to errors and oversights, including incomplete or unbilled procedures and claims, inaccurate charge capture, human error, inadequate staff training, unverified insurance, denied appeals, coding inaccuracies, and more. Patient revenue leakage costs healthcare providers 10% of their revenue, and a typical hospital can expect to lose 1-5% of net revenue because of leakage from reimbursement issues.
Handling revenue cycle management tasks also forces healthcare providers to deal with complex reimbursement models, electronic health record (EHR) adoption challenges, extensive clinical documentation requirements, and outdated procedures and technology. In a poll by the Healthcare Financial Management Association (HFMA) of more than 100 hospital and health system chief financial officers, approximately 62% of respondents report that EHR adoption challenges have been equal to or outweigh the benefits specific to their organizationsโ revenue cycle performance.
RCM inefficiencies result in an increased number of billing errors, lost revenue, and unnecessary administrative time and expense. Plus, about 15 cents of every U.S. healthcare dollar goes toward these inefficiencies.
An Overview on Outsourcing RCM
Using RCM best practices, healthcare providers capture revenue by identifying bottlenecks, minimizing audit risk by increasing audit controls, and offering comprehensive reporting capabilities. They can mitigate the costly effects correlated with reimbursement delays and poor cash flow, thereby achieving improved revenue, reduced cost-to-collect, greater point-of-service cash collections, and fewer denials.
Employing technology solutions to optimize RCM gives providers of all sizes a real-time snapshot of their revenue cycle performance. It enhances staff productivity, promotes increased compliance with various healthcare rules and regulations, and offers accuracy not typically found through paper-based RCM processes.
Although these advantages are reason enough for healthcare providers to focus on strengthening and improving their revenue cycle processes, many donโt have enough resources to accomplish such a herculean task. Enter: outsourced RCM services.
A study by KLAS noted various reasons healthcare providers choose to outsource their RCM services, including the economies of scale it offers, which allows them to reduce their cost-to-collect and be reimbursed at a higher rate. Another is the revenue cycle expertise RCM outsourcing firms can offer. Theyโre able to assist in improving multiple key performance indicators (KPIs) and blended encounter rates, reducing billing errors and denial rates, and decreasing staff administrative workload, all while increasing efficiency and profitability.
By outsourcing RCM functions, hospitals, health systems, and other healthcare providers can more easily define and monitor organizational goals and performance and measure their performance against those benchmarks. Such expert resources are consistently up-to-date on various state and federal guidelines and are to apply that knowledge accordingly.
Similarly, outsourced RCM partners have the capability to identify issues within a providerโs revenue cycle that might be affecting its cash flow. Any necessary changes or improvements in the providerโs revenue cycle can then be made by the collaborating resource to identify and address specific issues for increased profitability.
Recommended RCM Outsourcing Best Practices
With all these advantages, itโs no surprise the global healthcare RCM outsourcing market is forecast to grow to $23 billion by the end of 2023. Nevertheless, there are certain best practices that healthcare providers should follow when outsourcing their RCM functions:
- Set specific and detailed goals and expectations.
- Create and maintain a comprehensive project plan.
- Identify the skills and resources needed.
- Monitor goals and performance.
- Identify and verify the experience and security standards of the selected RCM partner.
- Identify an in-house staff member or team to collaborate with the selected RCM partner.
- Establish communication channels and schedules, and make communication a priority
- Select an RCM partner based on criteria, not solely price.
The Advantages of GeBBSโ Healthcare Industry Expertise
At GeBBS, our in-depth healthcare industry expertise enables us to provide end-to-end solutions to successfully resolve our clientsโ billing challenges while embracing their overall business operations. Through our current staff of more than 9,500 professionals, we provide strategic outsourcing solutions to medical billing companies and healthcare providers. Our comprehensive range of end-to-end revenue cycle management solutions include:
- PMS/EMR system and RCM process implementation
- Scheduling, eligibility verification, and pre-authorization
- Medical coding
- Claims submission (use your clearinghouse or a partner of ours)
- Accounts receivable (A/R) management
- Credit balance resolution
- Customer/patient access solutions
Contact us today to learn how GeBBS can work for you!
