Revenue Cycle Management: Where Does RCM Stand in 2020?
As hospitals and healthcare establishments around the world continue to deliver their services and save lives, they must also look for ways to build successful revenue policies to remain financially sound and afloat. But why now? As per a 2019 study, 56% of consumers would not be able to pay a health bill of more than $1,000.
Healthcare Revenue Cycle Management (RCM) is the answer for healthcare organizations struggling to get their financial processes in order while navigating the complexities of claims processing, payment, and revenue generation. This key process widely encompasses patient identification, management, and collection of service revenue.
The newly insured, and high-deductible plans along with the ever-increasing patient volumes are putting added pressure on revenue cycle procedures. In this market where margins continue to become narrower, hospitals and healthcare organizations need to find ways to drive an increase in the payment responsibility among patients and reduce their own cost to collect.
In this article, let us talk about the Key Drivers for Revenue Cycle Management (RCM) in 2020 and how the healthcare industry can identify opportunities for improvement in their revenue cycle.
1. Patient Care
Along with insurance and government agencies, patients now form a huge payer base to the healthcare service provider. According to a 2019 study, 77% of healthcare providers say that collecting any form of payment from patients takes more than 30 days. To address this concern, healthcare RCM should now be based on a consumer experience approach.
Taking care of the ailing patient is primary in healthcare but it is now emerging as a priority in the revenue cycle too. But how so?
Educate and inform – Transparency is key to building a stronger RCM in 2020 and is hence, one of the key drivers of growth. Let the patient have an estimate of the total payment that they have to make for the service upfront. Healthcare organizations should also endeavor to educate the patient about their insurance coverage and educate them on the benefits they can receive. Such conversations that provide the patient with a rough estimate of their payment responsibility prior to the service have seen to highly increase collection rates
Make payment hassle-free – Technology is evolving daily and it is also going to be a very important operator for RCM in 2020 for healthcare organizations. Collection rates can increase if hospitals allow patients to fulfill their payment through online modes. This can facilitate sending the patient reminders when payment is due to boost responsibility.
2. Optimize Cost to Collect
The cost to collect is a KPI – the key to measuring the health of the revenue cycle. Diverse healthcare establishments evaluate their cost to collect in different ways but most include the costs associated with functions such as eligibility and insurance verification, CDI programs, transcription, medical coding, and related liabilities. In 2020, healthcare systems should strive to reduce the overall cost to collect to transform the revenue cycle and boost a healthy RCM. Here are a few tips:
Decrease denials – One of the greatest challenges that need to be addressed in 2020 is decreasing denials. A solution can be partnering with highly skilled coders and streamlining front-end processes to quickly and accurately conduct eligibility verification procedures, analyze account history and capture patient information at the registration.
Focus on KPIs – KPI evaluations give an accurate picture of financial health. Improve important KPIs such as days in Accounts Receivables by rethinking and establishing consistent processes like following up with the payer and working on decreasing denials daily.
3. Reduce Cycle Time
Slow internal processes of the healthcare organization are another huge contributing factor to the lag in payment collections which in turn, negatively disrupts the Revenue Cycle Management process. The key to reducing the total revenue cycle time is making fundamental changes to the processes.
Make up-front collection a norm – It is known that healthcare is one of the rare industries that collect payments after they have offered their services. While humanitarian grounds need to be considered, this practice has long harmed revenue management. Organizations that accept copays, coinsurance, and other applicable payments before the service are bound to have a stronger RCM plan for 2020.
Automate processes – As per estimates, 90% of providers leverage paper and manual processes for collections. Outdated processes lead to sluggish collections, increasing the time taken and opening up more room for error. Automating the entire payment procedure can make healthcare RCM have a timely turnaround while generating more accurate and reliable financial information.
The ever-evolving healthcare landscape and its financial prospects have now become more challenging than ever. Adapting to the changing systems by having a comprehensive control over the revenue cycle can help healthcare institutions encounter any sudden fluctuations in the market in 2020 while continuing to deliver their remarkable essential services to consumers.