Four healthcare revenue cycle management myths debunked
As the healthcare revenue cycle continues its rapid evolution, we separate myth from fact to help you chart a better path forward.
Several turbulent years in healthcare have put added pressure on health system organizations. Nowhere is that pressure more acute than in the revenue cycle, where staffing issues and inadequate training collide with ever-changing payer rules, and lengthy, labor-intensive processes. The result? Revenue cycle teams must figure out how to do more with less all while increasing co-pay collections, minimizing denials and reducing the overall cost to collect.
As revenue cycle leaders continue their work to turn the patient financial experience into a competitive differentiator there are several myths that are worth debunking in order to chart a better path forward.
Myth #1: Increasing wages, expanding benefits and focusing on staffing strategies will solve healthcare revenue cycle management challenges.
Staff shortages are not a new challenge in healthcare and the revenue cycle is no different, with a recent report by Kaufman Hall finding that the number of revenue cycle full-time employees (FTEs) declined 1.6% while labor expenses rose 4.1%. Providing staff with higher salaries, flexible schedules and expanded benefits is one way to help with retention. In fact, an MGMA survey found that 56% of medical practice leaders said increasing wages helped their organization retain staff. Unfortunately, simply retaining staff doesn’t ease the challenge of recruiting top talent, navigating the rapidly changing billing environment, utilizing substandard technology, and slogging through cumbersome manual processes.
This is especially true in the revenue cycle, where denial rates continue to climb, write-offs and debt collections are becoming more common, and the overall pressure around cash flow and accounts receivable is increasing. Healthcare organizations simply cannot hire their way out of the challenges created by staff shortages and burnout. Instead, many are adopting intelligent automation solutions to address highly complex, high-volume areas like authorization and eligibility validation.
Myth #2: Purchasing new technology to address revenue cycle pain points is the quickest way to give staff much needed relief.
There are dozens of technology solutions on the market to address healthcare revenue cycle management. From appointment confirmation services, to payment portals, to estimators and eligibility tools, if you’re looking for a solution you will find one. The challenge with such offerings is that they are typically narrowly focused, often not designed to integrate within the revenue cycle ecosystem, and their features can overlap. Rather than providing quick relief as intended, point solutions often wind up creating even more downstream work for already overburdened staff who have to duplicate work, double check data and ensure accuracy due to a lack of interoperability.
Tip: Rather than opt for a point solution, look for partners with comprehensive offerings that are customizable based on your unique needs.
Myth #3: Outsourcing all or part of the revenue cycle is the cleanest way to establish a proactive, patient-centric financial experience that benefits all stakeholders.
In fact, outsourcing to a third-party fails to address the root cause of the issue: revenue cycle staff, regardless of where they sit, must navigate a significant amount of manual work and endure repetitive, burdensome processes. The result is often a negative impact on the overall patient financial experience and the ability to collect.
In a recent Notable survey of 1,000 American healthcare professionals, 57% of respondents said they were personally worried about burnout due to repetitive tasks, and 28% had already quit a healthcare job due to burnout. In short, moving the problem from one organization to another doesn’t make it go away.
Additionally, outsourcing revenue cycle work to a third-party can exacerbate the lack of synchronization between systems, while at the same time adding additional layers of complexity in terms of communications between provider and vendor.
Myth #4: When it comes to healthcare revenue cycle management, automation should start on the back-end.
In reality, the key to meaningful change in healthcare revenue cycle management begins with the front office. It’s at the front-end where errors have been a top cause of denials since 2016. Data collected on the front-end must be complete and accurate for the back end to succeed. The top causes of denials – missing data, medical necessity errors, and coding mistakes – have proven to be vastly reduced by gathering precise information upfront.
“Better registration data reduces eligibility related denials, which is key to revenue cycle success,” said Lucy Sumner, vice president of revenue cycle, Austin Regional Clinic.
Intelligent automation is being deployed to not only capture critical patient information at scale, but to extract it, categorize it, and automatically load it into source systems, including the electronic health record (EHR), practice management (PM) system, billing system, or payer portal. This saves staff time and dramatically reduces the potential for errors.
What’s more, the front office is often a patient’s first interaction with their provider and you only get one chance to make a first impression. Many patients do not necessarily distinguish their financial interactions with their provider from their clinical or experiential ones. By deploying a digitized and automated patient access solution with intelligence at the core, providers can prevent denials and create an engagement lever for patients and revenue cycle staff alike.
Ready to go deeper? Discover how Rhode Island’s second-largest hospital system is using intelligent automation to reduce manual touches and errors within the revenue cycle to the tune of $644K in projected write-off savings within twelve months.
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