“With the fee-for-service business model changing to prospective payment and value-based care, healthcare organizations are undergoing a cultural shift that dramatically alters their approaches to patient intake, eligibility verification and claims processing. These are issues that providers will have to understand and adjust to accordingly.”
— José Rivera, Visiquate, via Healthcare IT News
Healthcare providers use revenue cycle models and management (RCM) to bill insurance companies and patients for medical services. There’s been a great deal of change in RCM over the past couple of years, with more to come as the industry moves toward a value-based healthcare system.
At the same time, most RCM was designed to work with huge institutional payers such as insurance companies. The changes happening now are causing some significant issues for modern healthcare payments:
- Patients are having to pay a higher deductible and percentage of their medical bills, and, as a result, many of them default on their payments.
- Old RCM models have locked providers into systems that make it difficult to adopt consumer-centric revenue cycles.
There is hope for forward-thinking providers. Optimizing RCM for modern consumer healthcare is going to take lots of time, effort, and money, but there will be significant rewards for doing so. “The most successful organizations will be those that transform their systems of care to effectively manage accountability for outcomes and create value,” healthcare consultancy The Chartis Group writes.
There are several areas that organizations can improve to increase the success of their RCM system. We’ll explore two of the hot topics for the industry below.
The Growing Market in RCM Outsourcing
Few healthcare providers have the time, energy, or resources to rebuild their RCM models from scratch. Sometimes, it makes sense to delegate part or all of the RCM process to specialist service providers. These providers are better equipped to handle payments from individual patients and can cut costs through efficient workflows.
Many RCM service providers let hospitals and other healthcare centers outsource their entire billing, payments, and collection services. It’s a rapidly growing industry. The global RCM market is on pace to grow from about $4 billion in 2014 to $5.6 billion in 2019, according to MarketWatch.
"As hospitals and physician practices grapple with intense pressure to optimize revenue cycle management processes, outsourcing has emerged as a powerful solution to the challenges of a rapidly changing healthcare model," says Doug Brown of Black Book Research.
This option is becoming more and more attractive to providers, especially hospitals and health systems. “72 percent of hospital CFOs consider end-to-end RCM outsourcing to be the best option until value-based payment models are better established,” Brooke Murphy writes at Becker’s Hospital CFO.
Many providers are willing take on reimbursement risks. Caleb Anderson at Cerner, one of the giants in this space, discusses this at Healthcare Finance. A vendor could “run the patient call center, submit claims, handle denials, and essentially take care of everything up to the point where the customer [the provider] determines it's time to turn a patient over to collections.”
These innovations could end up redesigning the RCM model and even entire business models. Researchers at McKesson see this as a potential situation where vendors manage large portions of a provider’s business risks and become partners in healthcare delivery.
Using Smart Analytics and Insight to Drive Better Healthcare and RCM Decisions
Analyzing the vast amounts of data that providers have on customer treatments and payment can help reveal weaknesses in an RCM — especially where money is leaking.
Health Catalyst’s Bobbi Brown describes how she used a data warehouse to help one provider who had an ever-growing stack of denials. “After doing a workflow analysis, we discovered the roadblocks, set up new queries to automate the manual work, and created exceptions to monitor,” she writes.
Vendors who can serve as true data partners will play a key role. EY makes a compelling case for what an analytics platform could do in a modern revenue cycle:
- It could “instantly adjudicate a claim and provide a bill to the patient at the point of service,” meaning providers could reduce the number of debts they’re forced to take on.
- It could speed up the notification and accuracy of denials and help providers resubmit the corrected claim quickly.
- It could mine data to create predictive revenue models so providers could preempt any payment issues, rather than having to react to each individual problem as it arises.
Through partnering with the right organizations and mining their data to better understand customer payment behavior, healthcare providers can significantly reduce their RCM cost leakage.
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Tags: Enterprise, FinTech, Healthcare consumerism