Revenue cycle management topped the conversation this past week, (outside of the ACA debate in Washington). We heard interesting insights on various facets of the issue from two different corners of the industry:
- A survey of hospital and health system CFOs and revenue cycle executives
- Healthcare IT
Both lament the difficulties inherent in trying to build revenue. However, they had different insights and reasons for the chaotic environment in which healthcare administrators find themselves.
Survey reveals RCM systems aren’t very effective
A survey of 125 hospital and health system CFOs and revenue cycle executives was conducted by the Healthcare Financial Management Association and Navigant. The results revealed that the RCM systems that hospitals have in place aren’t very effective, executives aren’t sure about how to document results, and they are still struggling to collect from patients. Despite that the majority say they will continue to increase their budget for RCM systems even though they are struggling to “leverage the power of technology”, especially EHRs, to drive process improvement and long term success. It’s as confusing and contradictory a landscape as health care itself.
Less than one quarter focus on revenue integrity
We think one of the most startling findings in the survey is that a paltry 22 percent of respondents think that revenue integrity should be a top RCM focus for the coming year. Just over 40 percent have actually implemented revenue integrity programs. The lack of an internal process that provides accurate insurance verification, coding, charge capture, and billing, is tantamount to a sailing a ship with a gaping hole in the bottom. You can’t navigate your way to robust, or even break-even revenue, on a ship with a leaking bottom line.
Racing to keep up and unsure of results
Although healthcare executives may realize the benefit of revenue integrity systems, they are struggling to keep up with the pace of technology. They are also racing to determine if spending equals results.
The survey found:
- 51 percent of participants said their organizations can’t keep up with EHR upgrades, or they fail to maximize functional, workflow, and reporting improvements.
- 21 percent attempt to identify cost reductions through vendor consolidation.
Nearly three out of four respondents said that their RCM technology budgets were increasing:
- 32% said they were increasing spending by 5% or more.
- Of those that plan to increase spending:
- 77 percent were hospitals with less than 100 beds
- 78 percent were hospitals with 100 to 500 beds
Even when the technology is implemented, executives may not be able to document results.
- 41 percent do not have a method to track the effectiveness of their technology enhancements.
Nevertheless they remain hopeful. The majority of executives in the survey say they expect that investing in technology will improve their RCM capabilities:
- 79% are considering business intelligence analytics, EHR-enabled workflow or reporting, revenue integrity, coding and physician/clinician documentation options.
We would encourage healthcare and revenue cycle executives to share results. Those who do have program in place report “significant benefits” including:
- Increased net collections: 68%
- Greater charge capture: 61%
- Reduced compliance risks 61%
Patient self-pay remains worrisome
The survey showed that 90 percent of executives are concerned about consumer self-pay. This is an issue that we talk about all the time because we know the answer to that problem exists, if the right technology is implemented.
When patients know their self-pay amount and are engaged in the creation of a self-pay plan, they are empowered to pay their bills. They have participated in putting together a payment plan that makes sense and they know they are not going to receive surprise bills. Ninety percent of patients pay at the time of visit before they see the provider, but only 40% pay after they walk out the door.
All-in-one EHR IT systems not being used properly
Meanwhile, an opinion column in EMR & HIPAA, lamented the distractions caused by EHR, meaningful use and now MACRA. It’s all that healthcare administrators can do to address these regulations, nevermind paying attention to revenue cycle management.
As many organizations switch to all-in-one EHR systems they find that revenue is decreasing rather than increasing. In some cases, the system is the problem. In others poor training of staff to use the system is the culprit.
All of this adds up to one conclusion: when uncertainty is the only certainty, the bedrock of the organization has to be rock-solid technology that drives RCM. Regulation isn’t going to slow any time soon, and the healthcare landscape doesn’t look to be stabilizing in the near future. A foundation of vetted, proven, successful RCM technology may be the only sure thing that hospital executives have in their toolbox.