Running a successful revenue cycle strategy

June 21, 2021
by John R. Fischer, Senior Reporter
It is perhaps an understatement to observe that claims management in healthcare is a profoundly complicated process with plenty of room for error. When details are missing or mistakes are made, hospitals and physician groups often wind up paying the cost.

“You need clinical documentation experts that understand, from a reimbursement standpoint, an insurance company mindset of what needs to be captured in order to maximize revenue,” Anurag Mehta, president and co-founder of revenue cycle management company Omega Healthcare, told HCB News. “Otherwise, you’re leaving money on the table.”

Anurag Mehta
With the transition to value-based care, updates in regulatory and medical coding protocols and changing consumer demands, the complexity of revenue cycle management has only intensified in recent years. As a result, many hospitals and healthcare systems are looking for options that will optimize their revenue cycle processes, improve their financial outlook and streamline the patient experience.

Personalization and a retail experience
Replacing fee-for-service with value-based care has created an exponential number of factors to consider in RCM, including social determinants of health, readmission rates and comorbidities data. Hospitals must account for hundreds of variables when submitting claims to ensure they're able to secure the reimbursement they expect. The best way to do this is to stay on top of regulatory changes and medical billing protocols, and demonstrate provider performance.

"If you can demonstrate everything you've done to provide more value-based care, meaning better care, to a payer, then you are going to be more eligible for some of these new incentives for the additional revenue in Value Based Payment,” said Joni Orand, solutions consultant for quality, safety and compliance at symplr. “If you cannot demonstrate achievement of these targets, in the future there may be penalties."

Consumer demands have also changed the way healthcare providers think about expenses, with many patients seeking to pay medical bills retail style, from their mobile phones and iPads, like they would for items ordered off Amazon. Not only that, they also want to know prices for services ahead of time.

Amy Dirks Stevens
“Health systems need to be prepared for thinking about where the money is coming from,” said Amy Dirks Stevens, executive vice president and practice lead for operational transformation at AVIA. “Who is going to be paying them in the future? I think there is going to be a lot more money coming directly from employers, who are especially large and well-funded.”

An increase in outsourcing
Last year, as the COVID-19 pandemic led to more infection protocols and greater reliance on telehealth, those services came with complex new billing codes and workflows. Meanwhile, the cancelation of elective procedures cost practices a lucrative revenue source and put pressure on them to collect as much revenue as possible to stay afloat. With margins growing ever tighter, many providers have begun looking beyond their hospitals walls to have billing overseen by companies that specialize in RCM and claims processing.

“Between the constant changes in regulatory requirements, the need to adapt workflows and the increased demand of making sure their revenue cycle management was in order — along with delivering quality care to patients — practices realized it might be better to outsource some of the billing they were doing in-house,” said Pratap Sarker, president of Greenway Health.

Some are outsourcing billing to offshore coders to reduce the costs of labor. Others are tapping into cutting edge tools like AI and robotic process automation (RPA) that can sift through massive volumes of data quickly and draw insights that can optimize revenue.

“AI is allowing us to be predictive and ultimately prescriptive,” said Dirks Stevens. “Which contract will cause me most trouble in the next month? Which payor is my trauma center struggling with most? Machines can be trained to learn requirements of payors and alert providers to changes.”

These technologies are not only changing the backend of RCM. They are also being applied to the frontend, which involves registration, insurance verification and scheduling. Shifting the focus of billing away from its traditional place in the back and middle part of the process can help prevent potential reimbursement issues before they occur later.

“Automation and RPA have evolved to the point where technology can validate insurance and specific benefit coverage. In combination with that we can automatically audit 100% of accounts against data from the insurance company and compare it via a rules engine that we develop for that specific situation because we also know what their denial patterns are,” said Paul Shorrosh, CEO and founder of AccuReg. “That helps us surface and identify accounts that are at high risk of denial or nonpayment.”

Joni Orand
Billing future patients
Errors in claim submissions can cost providers a substantial amount of revenue. Even the misspelling of a patient's last name can lead to a denial and a time-consuming process to find and fix the error, thereby delaying when a hospital receives its reimbursement. One way to address those kinds of situations is through educating physicians and staff about revenue management and the information they have access to in order to submit claims properly.

"I think in the next five years analytics and data around provider performance are going to be key. Physicians will be less protected when it comes to mistakes, they make, or the hospital makes, regarding care and therefore revenue,” said symplr’s Orand. “Provider performance will be the gateway to revenue. Incidents or errors will no longer be something that stay within the four walls of the hospital. It's going to be something that's looked at under a microscope, because it has dollars attached to it. Payers and the public will increasingly have that information that has been previously protected."

Practices like outsourcing, and implementing AI and automation will continue to grow in popularity and be used together among providers who may be wary of making a mistake, predicts Mehta with Omega Healthcare.

“There will be a higher percentage of RCM done offshore as the delivery continues to mature. In addition, companies will be continually looking at ways to take out costs through automation and through utilization of potentially lower cost resources,” he said. “Five years from now, if it takes one person to do the work equivalent, I think that’s probably going to go down 10-25% through technology and automation even as things get more complex.”

Paul Shorrosh
Hospitals and physician practices will place more focus on the front end of the RCM process, with providers looking to prevent denials or disagreements over payments that are difficult to solve at the back end. AI, automation and RPA will help keep track of accounts at risk of denial earlier in the process and interoperability with EHRs will also help avoid denials and disagreements, according to Shorrosh.

“The better revenue cycle systems can communicate with EHRs at hospitals, the more efficient the revenue cycle will be,” he said. “We just have to do it with security and safety in mind.”

Meanwhile, consumers will demand more retail-friendly payment systems, and hospitals and physician practices will face competition from nontraditional healthcare companies like Amazon Care and Transcarent.

Pratap Sarker
“These organizations are going to become partners and revenue sources with healthcare systems. Patients themselves are also going to increasingly pay for services directly,” said Dirks Stevens. She adds that with the new CMS waiver program, hospital beds will be placed in people’s homes that they can bill for by providing care remotely. “That’s going to bring in a very different type of revenue. The revenue cycle function has to be prepared for these new types of money and those new types of payers.”

No matter what the future holds, the best approach for maintaining a strong revenue cycle is to keep tabs on regulatory changes and coding practices and how value-based care is changing the billing process.
“You could end up in a situation where you have streamlined billing processes, which allows you to spend more time with your patients,” said Sarker. “That’s what value-based care is trying to drive. It’s a balance of using the right level of technology and processed knowledge to run a back office as smoothly as possible to focus more on patient care.”