Rising patient financial responsibilities, difficult patient collections, and value-based reimbursement models proved to be financial challenges for many small hospitals and physician practices in 2017. It’s not surprising, considering a large number of executives were concerned that their organization lacked the revenue cycle management resources in place to effectively manage their transition to value-based care.
An HFMA study found that nearly 40 percent of CFOs did not believe their organization had the capabilities they considered “extremely important” to succeed under value-based medicine, including interoperability and access to real-time data. This forced organizations to reevaluate their revenue cycle operations or risk potentially devastating losses.
If this sounds all too familiar, you may need some type of administrative support in order to effectively manage alternative payment models. This is especially true for smaller organizations, which often lack the staff, financial resources, and IT infrastructure that their large-scale counterparts have to keep up with changing economic environments.
Small Organizations Seeking Help in 2018
To help reduce overhead costs, speed up preauthorizations, improve claim processing efficiency, increase coding accuracy, or streamline billing to speed up payments, many smaller organizations turned to service experts and partners to help improve their revenue cycle management in 2017. This trend is likely to grow in 2018 and beyond, say executives.
According to a recent Black Book survey, 35 percent of CFOs in small hospitals or practices expect to completely turn over RCM roles to specialists outside their organization in 2018. Respondents cited declining reimbursement rates and value-based care initiatives as key motivators for seeking new hospital revenue cycle solutions, though staffing concerns remain a chief factor. In fact, close to 93 percent of small hospital leaders reported that their organization experienced trouble with both staff recruitment and effective training after installing an RCM software system of their own.
Factors to Research When Choosing an RCM Specialist
Whether you have decided to upgrade an existing system or to find an outside RCM vendor, choosing the right resource or specialist is not an easy task. There’s no shortage of companies that specialize in RCM. Whether your organization needs assistance with pre-registration, medical coding, medical billing, or an end-to-end RCM solution, you will need to do your research to find the one that meets your needs. Having a plan in place now will help to ensure that you have a successful 2018.
- Cost Is Not the Only Factor
Many RCM specialists offer similar services, so be very clear about your needs and whether they will be met by the vendor you choose. Cost is not the only factor to consider. Make sure that the platform the vendor uses will interface with your existing Electronic Medical Record (EMR) system, and that their system is something that your staff can easily understand and will be able to work with.RCM specialist costs can vary depending upon the scope of services provided. Some vendors charge a percentage of the amount collected while others charge monthly fees. Make sure you understand the contract your proposed vendor is offering, and whether there are any termination clauses and fees.
- Training and Certification
Be sure to inquire about the actual people who will be working on your claims. What sort of training do they possess and what certifications do they have? Does the company provide ongoing training and certification and keep their staff updated on all ICD-10 coding changes? The company you choose should have a clear business continuity system in place. Of course, your RCM partner must be HIPAA-compliant, and have strict standards regarding how Private Health Information (PHI) is handled. Also, be clear on your reporting requirements and whether the company can provide the type of data you need to keep up on your claims, denials, and billing.
- Building a Working Relationship
Get to know your proposed partner, their experience in the field, and their daily operations. Managerial savvy, along with transparency, responsiveness, and trust will be keys to success in your new relationship. The most common stumbling blocks surrounding the move to engaging an outside specialist is how it will affect your internal operations. Lack of confidence from within your own organization—from other company departments to individuals who’ll see their roles altered—can affect or even cripple the success of your venture. Consider appointing a senior internal “point person” who can foster an enthusiastic buy-in among all stakeholders in your organization. This person should be well-aligned with your company’s mission and goals, and have good working relationships with the departments and teams involved.
- Setting Reasonable Expectations
Organizations expect a seamless turnkey switchover of responsibilities on day one—which is hardly ever the case. On average, it takes a window of between 90 and 180 days to fully absorb the operational nuances of an organization and to deliver quantifiable ROI. Be patient and stay the course during this steep learning curve in order to see long-term results.
- Establishing Flexible Metrics in Your SLA
Your service level agreement (SLA) should have clear goals and metrics, with reviews and mutually agreed-upon adjustments scheduled every 90 days. Revenue cycle management is a people business. We advocate for a formal “exchange program,” in which representatives of both organizations visit each other on-site to foster a true understanding of both sides’ operations—and lay the groundwork for a successful long-term partnership.
- Determining Your Timeline
RCM system upgrades should occur sooner rather than later, say most hospital finance executives. If not implemented by the first quarter of 2019, an outdated system could be detrimental to your organization’s value-based reimbursement transition and revenue. For many executives, top priorities for system upgrades also include user-friendly dashboards, data analytics, and business intelligence solutions.
Despite the seemingly endless list of challenges to your organization in 2018, one of the major advantages of small organizations is that you can make decisions quickly. Your physicians and key decision-makers are usually close at hand. This means you can be up and running with a new RCM system within a short turnaround time and quickly seeing results. And with the strong community ties that come from small hospitals and physician practices, you’ll see the results in more time spent with your patients and improved patient satisfaction.