When it comes to hospital revenue cycle management solutions, we continue to see moves to update technology and processes with appropriate staff training for our clients and others in the healthcare industry. Successful hospitals are also streamlining denial management, an important focus area with automated denials on the rise during the great increase in ICD-10 coding specifications.
We thought the recent Customer Think analysis sums up the case for hospital revenue cycle management (RCM) using smart technology: “Hospitals and healthcare providers now have an increased focus on unifying the revenue cycle management processes within their organization. Over the last decade, the healthcare industry has been one of the slowest industries to adopt to healthcare innovation and technology; rendering the industry outdated when it comes to advanced technology, communication and appropriate response time. Challenges with Health and Insurance Portability and Accountability Act (HIPAA) compliance may also impact the industry, making hospital facilities more cautious to upgrading new technologies.”
The report mentioned in the Customer Think article reviews the revenue cycle management market spread across 208 pages, profiling 25 companies (including The SSI Group) and supported with 113 tables and 127 figures. It seeks to cover the market trends from 2014 through 2020 and makes this general observation: “Revenue cycle management system (RCM) for healthcare providers enables healthcare organizations to accelerate their revenue cycles. This is achieved by reducing the number of denied insurance claims, speeding explanation of benefits (EOB) reconciliation, improving the quality of information, streamlining denial management, and automating processes. The RCM solution starts when a patient enters the hospital; it automates business processes leading to speedy follow ups, which encompasses patient and payer follow-ups. Hospitals need to maintain a faster RCM cycle to stay solvent, maintain requisite cash flow, and keep revenue figures stable.”
Meanwhile, Becker’s Hospital Review — CFO recently published a list of “25 things to know about revenue cycle management in 2017”. It is a great list, and here we will post a few items we believe to be of ongoing concern for our clients:
- The latest numbers available show revenue cycle inefficiencies accounted for 15 percent of $2.7 trillion spent on healthcare in 2013, or about $400 billion, according to McKinsey & Company.
- KFF reports the average annual out-of-pocket costs per worker rose almost 230 percent between 2006 and 2015. Patient out-of-pocket spending totaled $416 billion in 2014 and is expected to reach $608 billion by 2019.
- For insured patients, management consulting firm McKinsey & Company estimated the rate of bad debt is increasing at well over 30 percent each year in some hospitals.
- Hospitals reported appealing about 45 percent of all RAC denials in the third quarter of 2016, according to American Hospital Association’s (AHA) RACTrac survey.
The AHA RACTrac survey mission, is to collect “data from hospitals on a quarterly basis to assess the impact the Medicare Recovery Audit Contractor (RAC) program on hospitals nationwide. AHA developed RACTrac in response to the lack of data and information provided by CMS on the impact of the RAC program on providers.” We found the latest survey ( Fall 2016, PDF), and are including one of several helpful charts from the report:
Some hospitals are looking at ways to outsource the whole revenue cycle process. In an article about selecting a revenue cycle management vendor, RevCycle Intelligence notes observes that, “More healthcare organizations are seeking outsourced or vendor-created revenue cycle management services to support a range of payment models while the industry transitions, including fee-for-service and value-based reimbursement.” The article then goes on to quote a Black Book poll and report on “End-to-End Revenue Cycle Management Solutions”. The report included the following findings:
- Amidst the upheaval, 87 percent of self-determined profitable hospitals surveyed are keeping their revenue cycle management software and staff in-house to retain more control and because of their ongoing investment in training personnel and providing upgraded RCM technologies to attain the best ROI for their organization. Whereas the financially troubled hospitals seek a lesser expensive option for service levels defined for more moderate financial success, as well as an option for the frustration of changing regulatory requirements.
- Roughly a third (32 percent) of all US hospitals predicted they would replace their RCM solutions in 2016, have failed to initiate a sustainable end-to-end RCM plan, according to the survey results which fully address value-based payments.
The key to what we are seeing for hospital revenue cycle management solutions is a “sustainable end-to-end RCM plan”, as reported above. It’s why we at The SSI Group are taking a holistic approach as we continue to innovate and develop our solution platform. Contact us for a demo today.