Optimizing revenue cycle management is crucial for recovering from the significant losses of the previous year. Leading provider organizations have developed three effective strategies to address this challenge.
In the wake of the COVID-19 pandemic, fine-tuning revenue cycle management has become a priority for financial leaders. Last year, healthcare institutions faced substantial declines in revenue and patient volume while striving to protect patients from a highly contagious virus. These dual challenges, both clinical and financial, took a toll on organizations, leading to the unfortunate closure of some.
Currently, healthcare financial leaders are focused on recovery in a post-pandemic era. With most Americans now vaccinated, patient volumes and revenues are gradually returning to pre-pandemic levels. However, COVID-19 accelerated trends such as healthcare consumerism and rising healthcare costs. As a result, healthcare organizations must reengineer their processes to ensure a seamless revenue cycle moving forward.
Three Strategies to Optimize Revenue Cycle Management in 2024
1. Workflow Automation
The healthcare revenue cycle offers significant opportunities for automation. Team members often perform repetitive tasks such as eligibility verification, claim status follow-up, and patient statement creation, all aimed at accurate and swift reimbursement. Technology can automate these functions, allowing team members to focus on more complex and value-driven responsibilities.
For instance, a specialized practice recently automated elements of their accounts receivable (A/R) management. The revenue cycle director explained, “You have your practice management system, and you have all of these thousands of claims sitting out there. Determining which ones need attention and which don’t is a very manual process.” Implementing RCM automation software significantly enhanced their ability to organize claims, optimizing the efficiency of their A/R staff. This resulted in a 38 percent reduction in A/R over 60 days within the initial three months.
During the pandemic, workflow automation proved invaluable for practices. South County Urological in Missouri had already automated patient financial clearance before the pandemic. The office manager noted that this tool became a game-changer, streamlining patient clearance days before appointments and reducing unnecessary physical contact during strict distancing measures. Reflecting on the experience, the office manager said, “The biggest thing we learned is that we should have done something like this a long while ago.”
2. Front-End Optimization
Improving the efficiency of front-end revenue cycle procedures can alleviate challenges in later stages. Goshen Health has found this particularly impactful, with patient access being a crucial factor in their revenue cycle management success.
The director of patient access emphasized, “From the patient’s perspective, we are the first interaction for their visit. We have only one chance to make it an exceptional experience.” Accurate input of insurance information, precise patient demographics, and upfront collection of financial responsibility minimize rework throughout the revenue cycle, reducing potential denials.
Goshen Health has modernized its front-end process by leveraging features like automated and bi-directional communications. Post-pandemic, engaging with patients digitally for intake allows for contactless registration, ensuring safety for both patients and staff. This includes verifying demographics, capturing images of insurance cards and photo IDs, and electronically reviewing and signing consent forms at the patient’s convenience.
3. Finding a Partner
Streamlining revenue cycle management can be challenging, especially for smaller healthcare organizations. Physician practices may lack the necessary resources, such as capital, technology, and personnel, to optimize effectively. Rapidly expanding organizations might also struggle with disparate revenue cycle processes and technologies.
For some, a strategic partnership can provide a solution. Outsource revenue cycle management has become a viable option to address challenges such as delayed reimbursements, inefficient workflows, and technological limitations. Post-pandemic, outsourcing is poised for renewed popularity due to exacerbated difficulties in talent acquisition and retention. Maintaining an internal revenue cycle management team may not be viable or cost-effective for some organizations.
A contract administrator explained, “Some key billers were retiring, and we were losing essential staff members.” The practice decided to engage a third-party revenue cycle management company, resulting in improved internal operational efficiency and enhanced visibility into billing practices.
However, healthcare revenue cycle outsourcing may not suit everyone. About one-third of providers have regretted their decision due to dissatisfaction with their third-party vendor. Successful partnerships require considering factors such as the vendor’s expertise in the specific specialty, integration capabilities with existing systems, and robust support systems. As emphasized by the contract administrator, “It’s really important to have an advocate, a specialist, who knows the site and can answer questions.