Meeting the Hospital Revenue Cycle's Biggest Challenges in 2019

Scott Herbst, SVP & General Manager, Availity
JANUARY 23, 2019
revenue cycle management,hospital rcm,rcm solutions,hospital revenue

Hospital revenue cycle departments have gained greater visibility in recent years as a significant driver of revenue streams. Yet many of these departments continue to face serious challenges in several areas, including workforce, interoperability and electronic health record (EHR) optimization.

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Taking revenue cycle management to the next level by harnessing technology and data analytics can help hospitals and health systems track costs and identify opportunities for cost savings, gain efficiencies and optimize financial performance. Elevating the revenue cycle will be key as healthcare transitions to value-based care payment models.

However, many organizations have been slow to adopt the revenue cycle management (RCM) tools that will help them optimize RCM, according to a recent study released by the analyst firm Black Book. Among the findings:
  • Of the 522 hospitals surveyed, 400 have adopted workable RCM IT plans and implemented new RCM systems over the last six years — an improvement since 2012.
  • But 26 percent of hospitals started the year without viable, effective RCM solutions.
  • Of the hospitals that didn't have solutions in place in January 2019, most (82 percent) said they’ll make value-based reimbursement decisions in 2019 without an advanced software implementation or an outsourced partner.
As healthcare leaders look to RCM teams to identify cost saving opportunities and generate stronger cash flow, RCM leaders can step up their game by focusing on automation and optimized workflows.


Automation: Software Supports People

Despite some automation of claim submission and other transactions, many administrative transactions are still largely driven by inefficient manual processes. According the 2017 CAQH Index (PDF), an annual report on the adoption of electronic business transactions, the lack of automation for these transactions costs the healthcare industry more than $11 billion per year.

Automation and training also can help with one of the most common challenges hospitals face when implementing RCM solutions: finding skilled human resources. Better automation and better software coaching will open up a broader labor pool and help those employees do a better job.

One of the most important things healthcare organizations can do is help employees understand the goals of the organization and how their specific role fits in. Most people want to do good work and want to be in a situation where they feel good about the organization they work for. With automation, every person has the same knowledge, so your least efficient employee can work as efficiently as your best employee.

Although it’s easier to automate standard operations, exception handling — when the same error crops up over and over and is always corrected the same way — is also a great opportunity to introduce automation. And if you don’t have the information you need to address it, you can automate the process of driving it to the person who can.


Workflows: One Plan for Multiple Systems

While 70 percent of hospitals have adopted RCM technology, many use EHRs combined with multiple RCM vendors, which can cause significant interoperability and workflow issues, as well as data silos.

Better workflows can also improve upfront collections. Organizations can take advantage of technology to identify the care a patient will likely receive earlier in the process, provide the patient with a better cost estimate and collect for that anticipated care ahead of time.

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Healthcare providers must have one source of truth. To accomplish that, the work must be done in one system, so it can be used to the maximum degree. If a correction was made outside the system, it’s not efficient to import that correction manually back into the host EHR system, for example.

One of the major hurdles to attain a single source of truth is the surge of mergers and acquisitions, which have left many systems with a hodgepodge of technologies that don’t always talk to each other. Revenue cycle leaders will be instrumental in making sure new entities’ workflows are properly mapped to existing platforms and that the shift can be tracked and reported, and RCM partners should actively help them accomplish this task.

Another challenge: Regional or new technologies that arise often aren’t available immediately in the core EHR systems. If a state or a payer comes up with a new requirement to send a claim or adds a new data field, for example, it’s not readily accessible in the EHR. Software must operate as seamlessly as possible with the host system. And whether that's communicating back into the host system — it must be able to integrate and augment those systems.

The benefits of workflow optimization can be significant, but the execution will take a lot of expertise, time and cooperation with providers, RCM partners, and, in many cases, EHR systems. You have to have a good relationship at multiple levels to get that work done.


Start with the EHR

Few health IT implementations are as expensive, complex and involve as many stakeholders as an EHR — and it’s even harder when you’re up against an aggressive deadline. During an EHR build, it’s natural for an organization to put considerable focus on clinical functionality. However, the line between clinical and financial data isn’t as bright as it once was, and a significant indicator of a successful go-live is a provider’s ability to effectively manage payments and claims.

Hospitals upgrading or embarking upon a net-new EHR build should make RCM a high and continuous priority in order to identify and mitigate any issues during the course of the build. With an implementation of this scale, the effects on cash flow are always going to be a concern. New EHRs often cause changes in charge capture and billing processes, and there is the ever-present risk that something will go wrong, leaving hospitals unable to get charges out the door.

By focusing on RCM early, providers can establish a performance baseline for claims and revenue management and ensure that the hospital can seamlessly administer payments and claims and maintain financial performance during the transition to the new system.

The key to this strategy is having an experienced, proactive RCM partner. When implementing a new EHR, hospitals sometimes institute wholesale changes to their IT, which often means new vendors, new solutions and new uncertainties. However, an experienced and actively participating RCM partner can make a huge difference.

Any hospital or health system has business and clinical needs and cultures that make them different from other organizations. A partner with deep knowledge of the unique aspects of your organization not only will help you avoid common mistakes, but also keep you focused on detailed integration points and workflows for submission of claims, electronic attachments, converting paper claims, eligibility, remittances and payment auto-posting.

A partner that knows your organization also helps new vendors get acclimated, provides guidance and ensures everyone stays accountable. A positive and fruitful collaboration allowed us to establish claim benchmarks and ensure that work-queue configurations were optimized to mitigate missing or lost claims.

Many hospitals and health systems face significant RCM hurdles in 2019. As this department gains greater visibility as a significant driver — and creator — of revenue streams, organizations will need to collaborate with innovative partners to take RCM to the next level.

Scott Herbst is senior vice president and general manager of provider solutions at Availity, an industry-leading, HITRUST-certified healthcare information technology company that serves a network of health plans, providers and technology partners nationwide through a suite of products built on a powerful, intelligent platform.

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