The interest has always been there, of course, because healthcare organizations have faced delays in receiving payments that could be measured in months.
Uncertainty surrounds most of the payment process, and providers are looking to revenue cycle optimization as one way to regain control, said Jamo Rubin, MD, president of MPV Inc., an Austin, Texas-based company specializing in contract management applications.
“Healthcare is the only business where you sign a contract and don’t know what you will be paid,” he said.
While such ambiguity has always come with the turf in healthcare, providers are under more financial pressure nowadays and have less margin for error. The cost of providing care is rising for all healthcare organizations, and payment rates are declining from some payers.
As a result, many healthcare organizations have been increasing the speed in which they’re paid, as well as trying to increase the likelihood that they’ll capture payments from patients. Data show that providers ultimately capture as little as 20 percent of consumers’ payments if they don’t get those payments within the first two to three months after service is provided.
Improving the revenue cycle grew in importance several years ago, said Courtney Hoagland, a principal in the Chicago office of Deloitte Consulting.
Revenue cycle – ‘really hot’
“The days are gone when you can’t have an efficient revenue cycle,” Hoagland said. “The revenue cycle is really hot right now.”
Providers’ approaches and strategies surrounding the revenue cycle have changed.
“Several years ago, there was a focus on the front end, a preventative perspective,” she said. “Then, they focused on the back end, like the billing and collections process. Now, people aren’t interested in fixing one piece of the revenue cycle – they’re looking to fix the whole way of doing it.”
Hospitals and physician offices are particularly working on improving the claims submission process, said Bruce Korman, CEO of Claim-Remedi Services Inc., which provides three products and services to improve claims submission.
“The problem that plagues providers is that more than a third of all claims submitted are denied on the first pass,” Korman said. “This drastically drives up the cost of health administration. Providers have to optimize their revenue cycle because they have unacceptable levels of receivables, receivable days and overhead.”
Workflow is crucial
A unified approach to revenue cycle optimization can involve more than one strategy for healthcare organizations. It often involves more than just technology, which can be implemented but then not used. Improvement also is related to revising workflow processes, fine-tuning charge capture practices and paying more attention to customer service.
Workflow is crucial because it can enable facilities to check on a patient’s eligibility before he or she presents himself/herself for care. If patients aren’t insured or are not covered for particular services, then providers can make payment arrangements with them before care is delivered, Hoagland said.
Charge capture gets assist
Charge capture is getting an assist from technology, which can help staff assign billable charges to patients as they receive care. Technology also can help retrospectively in diagnosing where charges may be missed and identifying who on staff may be missing charges consistently.
Customer service is getting attention from providers that have realized the importance of improving relations with patients.
“Usually, the first person and the last person a patient talks to is from the revenue cycle staff,” Hoagland said. “Some hospitals are using them as ambassadors. The first person at the front door can help shepherd them through the system. A hospital could provide the best care in the world, and it’s all for naught if patients are getting 17 different bills that they don’t understand.”
As pricing transparency and high-deductible plans grow in importance, it will be even more important for healthcare organizations to improve revenue cycle operations. Transparency is being advanced from the highest levels of government, and patients are increasingly responsible for a higher portion of their bills, so it makes sense to give them a good idea of what their bills are going to be, and either receive or make plans for payment for care.
To improve revenue cycle operations, providers are turning to technology. For example, they’re either implementing new accounting systems that have more capabilities than existing systems, or they’re adding “bolt-on” technologies to help with a particular aspect of the billing cycle, Hoagland said.