While hospital executives say developing a high-functioning revenue cycle is essential, a lot holds them back from making it a reality.
Managing a healthcare organization's revenue cycle is increasingly difficult due to ever-changing payer contracts, complex payment models and growth in self-pay accounts, according to an executive roundtable discussion sponsored by Waystar at the Becker's Hospital Review 5th Annual Health IT + Revenue Cycle Conference.
The roundtable included more than two-dozen senior-level healthcare executives with experience at hospitals and health systems across the country. Perspectives were largely from leaders who develop and implement long-term technology and revenue cycle strategy.
During the roundtable, led by Brett Hoium, product marketing and integration strategy manager at Waystar, the group of executives identified two top areas of concern — cost to collect and mounting patient financial responsibility — and discussed strategies for improving revenue cycle performance.
There is likely room to reduce the cost to collect at many healthcare organizations.
Mr. Hoium kicked off the discussion with a simple question: "What keeps you up at night related to cost to collect?" That query evoked a variety of responses from the executives, many of which focused on one area: payer relationships.
The director of patient financial services at an Illinois health system said managing payer rules and a lack of transparency are a few of her top challenges. "There needs to be better transparency about what the payers want," she said, noting that it's often unclear why claims are denied, which makes reworking and resubmitting claims on the back end a time-consuming process.
Claim denials can be a pervasive and complicated problem for hospitals and health systems, especially those that hold contracts with several health insurers. Mr. Hoium said claim denials are also an expensive problem, noting that up to 20 percent of denials cost more to work than the actual cash value they represent.
The good news is that 90 percent of denials are preventable and two-thirds are appealable with the right data and tools, Mr. Hoium said. Technology solutions, such as automation and predictive analytics, can help hospitals streamline manual processes and reduce claim denials. Though several of the executives said their organizations have implemented or are looking to invest in these types of tools, the discussion also revealed many healthcare organizations aren't tracking cost to collect closely, or are not cascading the metric down to different areas of their revenue cycle to proactively monitor. When asked if their organizations are measuring cost to collect and using it as a key performance indicator to drive improvement, less than half of the executives raised their hands.
Hospitals are adjusting their strategies to navigate the shift to patient as payer.
Growth in high-deductible health plan enrollment is creating challenges for patients and providers and continuing to drive up overall cost to collect. As patients shoulder more of the cost of their care, many hospitals and health systems are struggling to collect payment. An analysis of 400,000 claims by The Advisory Board confirmed that the higher a patient's deductible, the less likely he or she is to pay the amount due, irrespective of his or her income.
During the roundtable discussion, hospital executives discussed how they're approaching this challenge. A few executives said their hospitals are exploring whether to offer patient financing options aligned with the new world of high-deductible health plans. The director of health information management at a hospital in Iowa said her organization is taking a new approach with payment plans after realizing payment options were too flexible in the past.
"We're fighting the battle with patients on why we need to set up a payment plan and pay it off within a year," she said. "We're struggling to catch up on years of $25 monthly payment plans."
Verifying patients' insurance coverage and educating patients about their insurance benefits is another important part of navigating the payment shift in healthcare. The director of revenue cycle at a Florida hospital said her organization is automating tasks, such as eligibility checks, to let front-end revenue cycle staff give patients the information they need in real-time.
"With unemployment so low, it's hard to hire people. I need to do things as efficiently as possible. I need as many tools as I can get to streamline," she said.
Hospitals are implementing new technology to update the revenue cycle process.
Hospitals and health systems are operating in a challenging economic environment, making it essential for them to develop an effective and efficient revenue cycle that maximizes reimbursement while minimizing cost to collect.
As patient financial responsibility mounts and hospitals experience unnecessary revenue loss caused by rising claim denial rates, continuing with a traditional approach to revenue cycle management isn't going to cut it. To maintain a healthy financial position, hospitals are using technology solutions, such as automation and predictive analytics, to streamline manual processes, reduce cost to collect and create a more consumer-oriented approach to revenue cycle management.