Even during the best of times, the healthcare industry could be characterized as highly demanding—and more than a little hectic. Of course, the optimization of healthy patient outcomes always lies at the heart (so to speak) of any practice’s mission; nonetheless, securing a stable revenue stream for your practice is a crucial consideration in its own right—and, for any number of reasons, often a cumbersome undertaking.
However, it never has to be: Revenue cycle management (RCM) is lately emerging as an increasingly beneficial system strategy to streamline your billing processes, enabling you to dedicate more attention to delivering top-notch patient care.
We invite you to read below for an easy-to-follow primer on what stands to go wrong due to poor RCM.
Financial Downturn
● Per exhaustive examination of practice data nationwide, up to 20% of potential income loss can be attributed to flawed billing processes.
● Expensive healthcare landscape and high-deductible plans inherently intensify revenue loss—hence the necessity to be prepared to work efficiently (in all applicable senses) within the “system” as it exists.
● Coding mistakes and documentation issues—i.e., reductively put, human error—can lead to significant cumulative revenue leakage.
● Denials can present complex “navigational” challenges, passing financial responsibility to patients who may be caught off guard and confused; for such matters, ensuring a standing protocol that results in patients feeling informed will engender fewer hassles with payment collection.
● When revenue cycle management isn’t sufficiently/appropriately handled, important items can fall through the cracks regularly. -Don’t let this phrasing connote innocuousness by any means: though definitionally “unnoticed” contemporaneously, these errors can occur continuously… and reach devastating escalatory extremes. (It’s not uncommon for practice to face “uncollectible” amounts exceeding $10 million.
Stagnation of Business Growth
● Scattershot RCM can “sneakily” prevent/preclude investment in the areas your business needs most shoring up.
● Reworking erroneous claims costs an average of $25 per claim. Multiply by x daily—unacceptable (and wholly preventable) income loss.
● Protracted collection efforts consume resources best allocated elsewhere, simultaneously delaying the acquisition of potential (i.e., rightfully owed) revenue even while compounding risk-loss therein.
● As noted above, inferior revenue cycle strategies can cost hospitals millions annually, drastically hampering (e.g.) expansion opportunities, salary options, the desired implementation of state-of-the-art training programs, etc.
The Toll on Practice-Wide Morale
● Financial instability leads to tightened budgets, which fosters persistent stress that tends to engender low morale—and, therefore, often, poorer employee performance—over time.
● Disjointed or inconsistent RCM processes can breed resentment among administrative staff as (e.g.) tensions arise over how things “should” be done.
● Front-end and back-end operations’ dissonance results in further inefficiencies (and intra-staff disagreements.
● Administrative personnel/teams tasked with but not adequately versed in solid billing practices are typically forced to endure a relative excess in workload, contributing handily to staff burnout.
Impact on Patient Experience
● Rising healthcare costs and high-deductible plans increase patient financial responsibility; when these conditions are more or less societally endemic, you’re naturally likely to see a commensurate increase in payment dereliction.
● Poor clerical processes “pave the way” to hidden medical costs and surprise fees—and, therefore, patients feeling taken advantage of or otherwise resentful.
● Transparent communication of patient responsibility is crucial for ensuring proper (and prompt) payment—both for practical and legal reasons.
● …Enhanced RCM processes precisely facilitate clear, consistent communication of all service costs.
● Unsurprisingly, improved patient-paid expenses correlate with hospital profitability…
Leveraging RCM Support Solutions
● Investing in professional revenue cycle management services relieves the overall administrative burden.
● RCM software automates crucial tasks like reminders, claims management, denials, etc.
● Integration with Electronic Health Records (EHR) significantly improves ease of access and organizational visibility as regards the individual “health journeys” of all patients.
● RCM software has been conclusively found to aid in ensuring timely billing reimbursement and provide illuminating (i.e., valuable) insights on patient population demographics.
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