The Three Pillars of Physician Revenue Cycle Management: People, Process, and Technology
As providers prepare for a consumer-first future in healthcare, industry and competitive pressures are forcing their hand to operate their revenue cycle processes in new ways. While we’ve seen significant advances in what technology can accomplish, unless that technology is properly combined with the appropriate people and processes, its yield will be limited. We’re helping our customers solve some of the key challenges in the industry by delivering the right combination of people, processes, and technology.
Reimbursement pressure and payer-mix shifts
Insurers are pursuing lower reimbursement rates, which puts pressure on providers as their costs continue to rise. It can also result in a cost shift to the patient.
Additionally, the insurance marketplace has seen a rise in high-deductible health plans. Lingering effects from the COVID-19 pandemic, including the current labor crisis, have caused a shift away from commercial plans and toward financial assistance plans. As a higher percentage of patients shift to Medicare, Medicaid, and financial assistance plans—all of which are on the lower end of the reimbursement spectrum—providers are finding it increasingly difficult to maintain profitability.
Getting paid less by insurers has forced providers to find new ways to operate more efficiently or spend less money going after the reimbursement they are rightfully owed. Providers should consider how to effectively train existing staff and equip them with technology and processes that make their revenue cycle more efficient and effective. For example, robust quality assurance programs are vital to performance in this area. Rather than building the solutions themselves, providers can capitalize an RCM service vendor’s network and scale to access solutions that facilitate profitability, with greater ROI.
Skilled labor retention
Skilled labor retention was already a problem; then came the pandemic and the “great resignation.” The main issue is that the labor market is insufficient in many areas where providers reside. In these areas, it has become increasingly difficult for physician practices to find certified coders or revenue cycle professionals in their local market.
Relocation is one option—albeit an expensive one—and providers in labor-poor markets often can’t offer the same compensation employees would receive in larger markets or in working with larger providers. Also, many providers lack the management processes or technology tools to facilitate remote working effectively in the revenue cycle. By enabling access to a national and global labor pool with established talent sourcing, remote policies, and technical support, RCM services vendors help ensure that providers in geographically isolated areas have continued access to the unique skills they need.
Rising capital needs for technology investment
Technology is becoming ever more integrated into the work done in revenue cycle management. Keeping up with the rate of advancement can be a difficult challenge for providers whose main focus is patient care. Many practices find themselves in the difficult position of struggling to justify RCM investment over clinical needs.
Partnering with an RCM technology and services vendor can have several advantages in addressing this hurdle. Leading RCM services partners continuously look for tools that allow them and their customers to become better, faster, and more efficient. Economies of scale allow them to experiment and learn from other providers to deploy what works broadly throughout their portfolio. They also deliver improved performance, which can help lessen the burden of provider capital needs. Lastly, vendors are experienced in change management and training processes to ensure revenue cycle operators are effectively leveraging new tools.
Increasing patient responsibility
Well before the pandemic, we were seeing a trend where employers were contributing less toward their employer-funded health plans. In exchange for cheaper monthly premiums, many employees have seen their deductibles increase to $5,000 or more. Getting paid from insurance companies is typically faster and more reliable than collecting from patients. Increased patient responsibility puts reimbursement pressure on the provider and can draw out the time it takes to collect the money they’re owed. When a provider bills a patient over the course of 12 months, that provider must also pay the extra costs associated with billing, whether it’s paying someone to perform billing services, process a check, or post a payment to an account. Compare that to the one-time transaction with the insurance company, and it’s easy to see how providers’ labor costs are increasing as it relates to patient billing.
Providers should seek to increase financial transparency for patients, helping them know upfront what they’re going to owe. This allows patients to make better plans. RCM services vendors are focused on helping providers improve the patient financial experience and proactively search for unknown coverage or assistance programs for the self-pay patient population to both aid the patient as well as to shorten the reimbursement process.
Improving providers’ financial health and patient experience
Providers spend a significant amount of time on administrative work and dealing with business needs, time which could be better spent with patients. We recommend providers evaluate their existing business strategies in the face of current healthcare challenges.
At Change Healthcare, our goal is to be a trusted partner that improves providers’ financial health so they can focus on patient care. Whether it is our robust quality assurance processes, our national and global labor access, the deployment of advanced technology, or our focus on patients through proactive coverage identification, Change Healthcare will continue to cultivate the appropriate and optimal combination of people, processes, and technology because that is what drives the best results for clients and their patients.