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White Paper
Gain Better Visibility and Control over Your Revenue Cycle
Summary
Leveraging technology to help expedite reimbursements and enhance cash flow
Whitepaper
Healthcare is a three trillion dollar industry that currently accounts for about 17.5 percent of the nation’s gross domestic product (GDP).1 By 2040, this figure is expected to swell to as much as 34 percent due to an aging population, rising healthcare costs, and other factors.2
As evolving market trends shape healthcare reimbursement, providers continue to be faced with real-world, day-to-day challenges that contribute to unpaid claims, unnecessary denials, workflow inefficiencies, and rework efforts.
By implementing a few key recommendations outlined in this article, providers can obtain the necessary visibility and control over their claims reimbursement processes that help to not only sustain a healthy revenue cycle, but also enhance the patient’s overall experience.
Get Ahead of Denials
Claim denials cause delays in payment and often result in unnecessary write-offs for providers. They can require a significant amount of time and rework, which costs providers an average of $25 per claim.3 According to the Centers for Medicare & Medicaid Services (CMS), as many as 30 percent of claims are denied on first submission, and a top reason for these denials is incorrect or missing eligibility information.4 Ensuring that all patients are screened for eligibility prior to service is the single biggest and most important step a provider can take to avoid costly denials down the road.
For many providers, coding issues also contribute to denials. All payers have their own nuances that coders need to understand.
The average cost to rework a denied claim is $25; for larger health systems with thousands of patient visits per year, the cost can reach well into the millions.3
Currently, however, this is commonly managed through 'tribal knowledge' where one individual within a billing department becomes the expert for a specific payer. Between the regulatory environment and the onset of new payment models, these nuances will require providers to shift away from relying only on staff for managing claims and denials. Providers and billing organizations must look for tools to help ensure coding is automated to the extent possible and done properly.
Lastly, providers should pursue visibility into their claims process to know what’s going out and what’s coming in to lay the groundwork for efficient workflows. Providers need to think about their claims process as a closed-loop, inventory-management system. They must be able to run reports to know where their claims are and the disposition of every claim at all times. Providers often spend inordinate amounts of time determining a claim’s status, such as making phone calls, faxing, or emailing, just to locate where a claim is within the process. Providers should leverage commonly available tools to automate this part of the revenue cycle so that they can spend their time focusing on exceptions.
Have a Plan to Treat the Patient as a new “Payer”
With the proliferation of high deductible health plans over the last 10 years, healthcare has experienced a significant shift in how claims are paid. In 2014, patient out-of-pocket payments reached $329.8 billion—approximately 11 percent of total healthcare expenditures.6 With patient deductibles often resetting in January, the first quarter tends to be the most challenging for providers to manage, having to collect more payments directly from patients. To reduce the potential for revenue erosion, providers must find ways to help predict and optimize cash flows. They need to implement tools and best practices that can help them manage patient payment processes.
In 2017, the average payment responsibility for nearly 40% of all patients fell between $501 and $1,000 per healthcare visit, an increase of 11% from the year before.5 Offering patient responsibility estimates and multiple payment options can help optimize cash flow and reduce bad debt write-offs.
Leverage Technology to Benchmark Performance and Streamline Work
Providers can use benchmarking to help understand how their organizations compare with peers in the same market segment. Key performance indicators in particular can reveal issues that need to be addressed, while highlighting goals they should be working toward. Many billing systems and revenue cycle management vendors offer competitive benchmarking as a way to gain these insights. Trade associations such as HFMA, MGMA, NAHAM, HIMSS, and others also are great sources.
Next, healthcare providers should leverage technology and services that can help them manage their revenue cycle more efficiently, while providing full visibility into the entire claims process. There are many solutions available, ranging from 'a la carte' software to enterprise solutions.
Revenue cycle technology can help practices:
- Determine eligibility and obtain preauthorizations or verification more efficiently. With errors in eligibility being a top reason for denials, using technology to determine eligibility on the front-end of a patient interaction can help eliminate most problems downstream. Likewise, technology can be used to obtain pre-authorizations or verify benefits almost instantly. Denials related to pre-authorizations can be reduced or eliminated by leveraging an integrated RCM solution.
- Navigate coding nuances. To help navigate coding nuances and ensure payers’ requirements are met, healthcare providers should look to vendors with the broadest payer network. These companies typically have built the infrastructure and knowledge base necessary to understand all of the billing nuances, and a key part of what a provider is buying is that industry experience. Many practices also use an EHR and practice management system integrated with a claims clearinghouse to automate and streamline coding. Doing so can help reduce coding pain points and avoid coding-related denials.
In 2017, the average payment responsibility for nearly 40% of all patients fell between $501 and $1,000 per healthcare visit, an increase of 11% from the year before.5 Offering patient responsibility estimates and multiple payment options can help optimize cash flow and reduce bad debt write-offs.
- Audit and scrub claims before they’re submitted. Claims should be as accurate as possible to save costs while maximizing potential to collect. Technology can automate this process and flag any claims requiring action prior to submission to the payer.
- Minimize rework to optimize time and resources. As noted previously, providers spend $25 on average to rework each denied claim. For larger health systems with thousands of patient visits per year, the administrative costs to rework denied claims can be in the millions. By reducing or eliminating rework caused by denials, providers can save significant time and resources. With greater workflow efficiency and automation, staff are then able to focus their time on more complex cases. “Work by exception” and “process automation” should be the provider’s mantras when looking for tools to streamline the revenue cycle.
As healthcare rapidly evolves towards a consumer mindset, providers should do all they can to help educate patients about their payment responsibility, beginning with offering payment responsibility estimates prior to or at the point of service.
Meet filing deadlines. Using technology to identify aging claims or appeals, healthcare providers can implement 'crosschecks' to ensure filing deadlines are not exceeded. Each can be reviewed to ensure there is enough time to correct any issues prior to any aging deadlines.
Improve visibility. To oversee an entire claims process efficiently, organizations need to have complete and comprehensive visibility over their billing operations. Look for a full-service revenue cycle solution that provides a single view of the entire process. Choosing a series of best-inbreed solutions for each stage of the revenue cycle is a viable strategy, but the simplicity of a single-view is often a more powerful tool for the provider.
Use Technology to Provide Price Transparency for Patients
Patients who understand their bills are more likely to pay their bills. Unfortunately, patients often don’t know how much their out-of-pocket expenses will be until they are billed. This lack of visibility can not only impede a patient’s ability to pay; it also can result in increased patient calls to the billing department, which is often unpleasant for both staff and patients. As healthcare rapidly evolves toward a consumer mindset, providers should do all they can to help educate patients about their payment responsibility, beginning with offering payment responsibility estimates prior to or at the point of service.
Many integrated solutions now offer functions similar to those outlined in the HIMSS Revenue Cycle Improvement Task Force’s vision of the “Patient Financial Experience of the Future.”7 In the spirit of this vision, providers can use transparency tools to help patients understand balances due, which makes it easier for patients to pay and for providers to collect those balances.
Ultimately, improved transparency can contribute to higher levels of satisfaction for patients. Understanding what they will owe enables patients to make more informed decisions about their care and can help them plan for treatments. It also helps reduce 'bill shock' when they receive their billing statements.
You Must Have a Plan to Help Protect Your Bottom Line
The provider–payer relationship historically has been perceived as adversarial. However, in our evolving healthcare ecosystem, the relationship is becoming more symbiotic as both providers and payers save time and resources when claims and reimbursements are timely and accurate.
By using technology and services to streamline workflow, provide visibility, and prevent denials, providers may be able to reduce the $315 billion spent annually on claims processing, payments, billing, bad debt, and other aspects of managing the revenue cycle.8 In addition, they may be able to prevent denials and recover more reimbursements—ultimately helping to protect the organization’s cash flow and bottom line.
To learn how Revenue Performance Advisor from Change Healthcare can help you gain visibility and more control over your revenue cycle, visit www.changehealthcare.com/solutions/revenue-performance-advisor or call 866.817.3813.
1 Health Expenditures. Centers for Disease Control/National Center for Health Statistics. May 3, 2017.
2 The Economic Case for Health Care Reform. Obama White House Archives. June 2, 2009.
3 "You Might Be Losing Thousands of Dollars Per Month in 'Unclean' Claims. Tina Graham. MGMA Insight Article. March 2014.
4 "Where Your Clients Might Be Losing Money in Their Practice." David Doyle. HBMA Billing. February 21, 2013.
5 Patient Payment Responsibility increases 11% in 2017. TransUnion Healthcare analysis. March 5, 2018.
6 National Center for Health Statistics. Health, United States, 2015: With Special Feature on Racialand Ethnic Health Disparities. Hyattsville, MD. 2016. Table 93, pg. 307.
7 Patient Financial Experience of the Future. Health Business Solutions. HIMSS Library. April 2015.
8 Rethinking Revenue Cycle Management. Health Business Solutions. HIMSS Library. April 8, 2015.
