The New Year is often a time of reflection and even more often, a time for resolutions. Even for organizations who performed well in 2017, revenue cycle management is often an area where there is always room for improvement. As the healthcare system shifts to value-based purchasing, claims reimbursement rates decline and health policies evolve in ways that keep revenue cycle leaders seeking new strategies for improving financial systems and processes for their organizations.
Often times, it’s not just a matter of cutting costs. Improving efficiencies is equally important when it comes to navigating the maze of payer reimbursement rules and meeting the demands of healthcare consumers. Industry challenges have always complicated revenue cycle management but practice and hospital leaders can implement strategies for lasting healthcare revenue cycle management excellence.
Use Data to Track Revenue Cycle Performance
Implement a data-driven healthcare revenue cycle. Data will tell revenue cycle leaders the financial health of an organization and if staff are efficiently performing the tasks needed for fast, accurate reimbursement. Organizations should develop and track key performance indicators (KPIs). Here are five key KPIs:
- Net days in accounts receivable (A/R)
- Cash collection as a percentage of net patient services revenue
- Claim denial rate
- Final denial write-off as a percentage of net patient service revenue
- Cost to collect
Automate Prior Authorizations and Eligibility
Administrative costs can grow for organization still using manual processes to check prior authorization and eligibility. Manual prior authorizations cost providers an average of $7.5 per transaction, while electronic prior authorizations only cost $1.89 per transaction, the 2016 CAQH Index showed.
Practices and hospitals can also save an average of $3.60 per eligibility and benefits verification by switching to an automated process.
Revenue cycle managers can ensure a seamless healthcare experience by switching to automated processes. Staff can reduce the time it takes to fulfill prior authorization and eligibility requirement and focus their time on high-priority tasks, such as collections.
Break Down Front- and Back-End Revenue Cycle Management
Traditionally, healthcare RCM is separated by front- and back-end functions. The front-end is patient-facing, collecting information, confirming eligibility and registering new patients. Back-end revenue cycle management includes claims and denials management, medical billing and patient financial responsibility collection.
Staff in both groups perform distinct tasks that, when combined, result in complete healthcare payments. The revenue cycle can be optimized by breaking down the silo between front- and back-end responsibilities. Knowledge transfer between front- and back-end staff often results in increased efficiency and a reduction in payment challenges.
Collect Patient Payments Upfront
High-deductible health plans are beginning to dominate the insurance market. With this trend, providers are relying more on patient to pay for services. According to a recent TransUnion report about 68 percent of patients with medical bills did not fully pay in 2016.
Late and underpaid patient financial responsibility slows healthcare revenue cycles. Revenue cycle managers can optimize patient collections by implementing point-of-service or pre-service payment options. A good way to start is by offering patients financial estimates before or at the point-of-service. According to a recent TransUnion survey, about 46 percent of younger patients claim they would be able to pay more patient financial responsibility at the point-of-service if they received a cost estimate.
Revenue cycle managers can prepare for cost estimates by implementing tools that assess historical data and estimate allowable expenses for specific payers and procedures. Organizations should also implement credit-card-on-file services to boost point-of-service collections. On average, organization find that credit-card-on-file strategies reduce accounts receivable days by 28 percent.
Using data to track revenue cycle performance, automating prior authorizations and eligibility, joining front- and back-end functions and collecting patient payments upfront will help practices and hospitals create a strong healthcare revenue cycle that responds to an evolving industry.
For free advice, affordable technology solutions and professional services contact RAPID Healthcare. Our team of experts can help you achieve all of your revenue cycle management resolutions.