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What Happens as a Result of Poor Revenue Cycle Management?

What Happens as a Result of Poor Revenue Cycle Management?
We invite you to read below for an easy-to-follow primer on what stands to go wrong due to poor revenue cycle management.

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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This entry was posted on Thursday, August 31st, 2023 at 12:03 pm. Both comments and pings are currently closed.