One of the goals of managed care is cost reduction. Still, with expenses rising and reimbursements declining, it’s essential for healthcare providers to link their managed care and revenue cycle management (RCM) strategies.
Providers are bracing for more Medicare cuts in 2022 even as they take on more managed care contracts and overall reimbursements stagnate. Their financial stability and longevity hinge on an inclusive plan that binds its managed care approach with its revenue cycle management.
Managed-care plans, such as Medicare Advantage, are intended to provide quality care to beneficiaries while more efficiently utilizing health services and reducing program costs.
Many healthcare providers target cost control as a solution to diminishing reimbursements. But cost reduction alone is not a viable solution for an organization’s long-term financial health as the fiscal impacts of decreasing reimbursements are compounded by rising inflation, growing service and supply costs, supply chain inconsistencies, and the ongoing labor shortage.
According to a recent Health Leaders report about 2022 healthcare finance trends, labor costs in 2021 climbed nearly 20 percent over 2020, a notable jump over the standard 3- to 5-percent yearly average. And fewer workers employed at higher wage rates coupled with rising supply costs have led to increased services costs.
Meanwhile, consumer spending on healthcare remains flat and below pre-pandemic levels, and reimbursement rates aren’t keeping pace with skyrocketing inflation. These factors make it difficult for managed care providers to survive, let alone thrive.
The current healthcare industry challenges are compounded by the shift toward value-based care in general and managed care specifically.
Managed care has magnified standard RCM pain points, including eligibility verification, preauthorization data capture, medical coding accuracy and claims management. The adoption of managed care means working with more payers; providers who previously partnered with a lone Medicaid payer, for example, might now be dealing with upward of a half-dozen Medicaid-authorized payers.
These payers, in turn, have varying levels of interoperability with providers and differing degrees of compliance with regulations established by the Centers for Medicare and Medicaid Services (CMS). These payers may also be using different reimbursement methods.
Insurance verification is a critical early step in the revenue cycle, and its importance has been amplified with the move to managed care. For example, providers must go beyond verifying whether Medicare or Medicaid covers a patient; they need to determine whether a patient has been assigned to or elected for a CMS managed care plan, which will affect qualifying services and reimbursement.
Verification and prior authorization are further complicated by the fact that the CMS maintains multiple managed plans, each with its own unique and ever-evolving rules. Another significant revenue cycle hurdle for managed care providers, as noted in a recent Healthcare Finance article about managed care and RCM strategies, is that most providers don’t have the resources for a dedicated managed care leader to coordinate and keep up with changing managed care policies.
Without a nuanced RCM plan that considers every facet of managed care, providers face revenue cycle disruptions ranging from inadequate patient data collection and medical coding errors to claim denials and reimbursement delays.
The importance of consistent, accurate medical coding to the managed care revenue cycle cannot be overstated.
Consider that CMS managed care plans have different coding requirements than traditional Medicare and Medicaid plans. When servicing managed care claims, using standard Medicare or Medicaid codes can slow the entire revenue cycle; inaccurate or inadequate coding can contribute to eligibility and authorization delays, lead to claim denials that need to be appealed, and impede reimbursements.
The healthcare media outlet RevCycleIntelligence recently detailed the financial risks of medical coding errors, as well as how a quality coding partnership can help stem losses and improve profitability. One article examined the half-million-dollar hit a single in-house coding error cost a hospital. Another report examined how a hospital rebounded from revenue losses by upgrading its medical coding and billing approach to include dedicated coding resources and state-of-the-art technology.
Precise medical coding is just one aspect of a healthy revenue cycle, but its effects stretch throughout the process, from patient onboarding through billing and reimbursement to follow-up care. Advanced medical coding capabilities are critical to an end-to-end RCM solution and a managed care provider’s survival. Organizations not already working with a devoted coding partner would be wise to appraise the benefits of single-source coding.
More healthcare providers are turning to outsourcing and fully integrated revenue cycle management platforms to cope with the cumulative effects of the COVID-19 pandemic, the Great Resignation and other financial challenges.
Implementing a comprehensive RCM system that unites forward-reaching technology and experienced human resources who understand the intricacies of managed care can improve workflow, save costs, foster profit growth and enhance the patient experience. An end-to-end RCM solution provides the data and analytics tools to identify operational inefficiencies, and it offers AI-enabled technology and automation capabilities to optimize coding and billing processes and improve their accuracy.
A properly implemented RCM platform should maximize reimbursement and improve payer yield. And a reputable RCM partner should specialize in healthcare and employ certified coders with specific knowledge of managed care’s unique requirements.
As healthcare providers strive to overcome the current market obstacles, a thorough RCM strategy that incorporates the subtleties of managed care can supply a significant boost.
GeBBS Healthcare Solutions is a KLAS® Top Performer and leading provider of RCM and health information management (HIM) services.
GeBBS is dedicated to helping its partners streamline workflows, improve financial performance, sustain compliance with federal and state regulations, and strengthen the patient experience through innovative technologies and expert personnel. GeBBS is recognized as one of Modern Healthcare’s Top 10 Largest Revenue Cycle Management Firms, Black Book Market Research’s Top 20 RCM Outstanding Services and Inc. 5000’s Fastest-Growing Private Companies in the United States. Visit gebbs.com to connect with us today to learn how we can help your organization make a smooth transition to managed care and enrich your revenue cycle.