Even amid a booming economy and near full employment, healthcare providers are facing significant financial headwinds. Reimbursement has been hit by federal cuts and private payers’ increased denials for medical necessity and audits of revenue integrity. Consumers may be employed, but their insurance is likely to include sky-high deductibles and out-of-pocket costs, making self-pay a huge concern. The loss of the individual mandate will reduce coverage, may raise costs and could hurt reimbursement. A little-noticed Trump administration proposal to allow association health plans to sell insurance across state may lead to insurers flocking to the states with the least stringent rules, resulting in zero accountability for shoddy business practices and patients and providers left paying for care. Finally, the shift toward value-based payment seems to be falling victim to the White House’s effort to roll back the Affordable Care Act, imperiling billions of dollars spent on consolidation and population health.
You might think all of this would call for a whole new approach to revenue cycle management and a huge new investment in technology. You might also see a need for mass layoffs, to push the cost problem down the road.
Paradoxically, I think that this may be a time for simplicity – a focus on the basics. That includes old fashioned goals such as ensuring clean bills, avoiding coding errors that might flip responsibility onto patients and working with patients upfront to handle their payment in a patient-friendly manner. Rather than cutting staff through morale-busting layoffs, there is far less pain in finding extra dollars by ensuring payers are following policies and your own claims are accurate.
This may also be a time to honestly assess your central business office’s strengths and weaknesses. Revenue cycle is a niche area with complex processes; it may not be an organizational strength. What is your staffing bandwidth and engagement? How strong is your technology platform? What is your propensity for innovation to optimize workflow and analytics?
For many health systems, there are intellectual resources, staff time and technological ability to handle these challenges. In fact, some of the best revenue cycle teams out there reside in health systems. Others have not been as innovative. The smaller community hospitals usually do not have the resources to face the breadth and depth of revenue cycle complexity. Some providers have tried to buy their way out of trouble by buying all-encompassing technologies or hiring one of the huge revenue cycle companies or consultancies. They find that the shiny technologies don’t always get implemented in ways that make their staff or the overall revenue cycle that effective, and consulting engagements don’t provide lasting results because of the constant changes in the industry. Much of the human work is off-shored or done by inexperienced staff.
Depending on your hospital’s level of sophistication, it may be time to review your revenue cycle operation with an eye to outsource a few functions where you lack in-house expertise. Two areas that seem ripe for modest-scale investment would be optimizing your self-pay collection practices and central business office workflow and analytics.
According to Black Book’s 2017 Revenue Cycle Management survey, 83% of surveyed providers expect to add technology solutions in 2018 to help patients anticipate, manage and track the costs of their healthcare.
On workflow, the focus ought to be on billing, meaningful work issues management and system wide collaboration. You may want to consider self-audits to ensure your billing is accurate and above-board.
If you choose to engage with a niche vendor, be careful about technology-only solutions that lack backup and integration with optimal workflow. Make sure partners will align with your mission, and drive ongoing improvements.
This year promises to be a challenging one, even for providers that had decent financial results in 2017. Revenue cycle remains an area ripe for modest enhancements that can redound to the bottom line quickly and painlessly.
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