Healthcare organizations must improve their operational systems in order to reduce costs and expenses as well as increase the payments made by self-pay accounts. Because of this demand to tighten medical billing practices, financial leaders are using technology solutions to achieve their healthcare revenue cycle management (RCM) goals.
Some major challenges healthcare RCM managers face include leveraging the cost to collect, price transparency, and claims denials. In fact, even though effective medical billing processes are the key to any effective healthcare RCM strategy, Health Data Management reports that approximately 30 to 40 percent of medical bills have errors. We take a deeper dive into these modern RCM challenges healthcare providers face in 2017, and examine how technology plays a role to help overcome them.
Payment Landscape Changes Create New Challenges for Revenue Cycle Management
These challenges are compounded by the fact that hospital revenue is now coming from different sources than it did five years ago. In fact, Modern Medicine Network reports that five years ago a small-sized practice collected “90% or more of its revenues from Medicare, Medicaid or insurance companies like Blue Cross Blue Shields or Humana, and patients made up 10% of revenues.”
The article continues to explain that the landscape has drastically changed. “Today, in many cases payments make up 33% government, 33% insurance companies and 33% patients which vary from practice to practice. Providers are struggling to cope with getting their arms around the fastest growing payer which is the patient,”
RCM Technology Can Play a Significant Role in Meeting New Goals
Recently, Becker’s Hospital Review spoke with a variety of financial and revenue cycle leaders about their 2017 RCM goals and what they plan to do to meet these goals. In the article, Becker’s spoke with CFO Michael Browning from the Ohio-based Promedica healthcare system, which serves nearly 30 counties in southeast Michigan and northwest Ohio. Browning explained:
“With lower reimbursement, higher-deductible health plans and more pressures from insurance companies, improving our revenue realization and subsequent cash collections has become more challenging. These challenges have forced us to improve processes and become more innovative in how we manage the revenue cycle.”
Research Shows RCM Market Projected to Grow
Business Wire recently published a report by Research and Markets that analyzed the projected growth for the revenue cycle management market. According to their findings, the global RCM market is expected to reach USD 65.2 billion by 2025.
The report continues to explain the shift in healthcare as organizations are now becoming more focused on digitalizing and centralizing the processes that occur on the back-end. This change in focus brings about a demand for robust revenue cycle management software, which will positively affect the market growth. The report continues to explain that the “development of value-added services, i.e., integration of RCM system with other healthcare IT solutions such as practice management, Electronic Health Record (EHR), Computerized Physician Order Entry (CPOE) is anticipated to propel demand over the forecast period.”
Technology Being Used by Physicians to Prevent Revenue Leakage
Physicians are taking the needed steps to leverage data in order to prevent the slippage of income through cracks in their revenue cycles, especially in an age where doctors’ payments are tied to outcomes via Medicare Access and CHIP Reauthorization Act.
Healthcare Finance reports that many physicians are unable to take their attention away from providing care, which can affect their clinical outcomes and payments. Because of this, many physicians outsource their healthcare revenue cycle management functions and data analytics. For those doctors who cannot do it themselves or hire consultants, they are turning to technology that is easy to manage to be sure “they’re capturing as much revenue as possible.”