An effective Revenue Cycle Management (RCM) process is essential for hospitals to have financial stability and growth. Over the past few years, revenue management has faced a number of challenges. COVID-19 caused unexpected financial strain with hospital resources at a maximum. In addition, patients are incurring more out-of-pocket costs as part of their high deductible plans. Hospital staff are dedicating more time and effort to collecting payment.
How can healthcare systems meet these changing demands while still providing quality care for patients and earning enough revenue? This article reviews key strategies to transform your revenue cycle management process.
What is Revenue Cycle Management (RCM)?
Revenue Cycle Management (RCM) represents the process used to track patients through their whole journey – from the moment they schedule an appointment to making their final payment for services rendered. RCM includes all administrative and clinical functions that contribute to the intake, management, and collection of payments. The revenue cycle process is incredibly complex and increasingly includes many activities outside the typical process of revenue management.
Ideally, the RCM cycle ends with a healthcare provider receiving all payments. Any errors or inefficiencies in the cycle can lead to not receiving payment at all. Optimizing the revenue cycle offers a number of benefits including less demands on staff, patient engagement and improved collection. Almost every aspect of the patient journey intersects with and impacts the revenue cycle.
Strategies to Transform Revenue Cycle Management
- Pre-Registration and Front Desk Interactions
Hospitals must take advantage of digital technology in the revenue cycle process. More patients prefer to schedule appointments on a phone app or hospital website. At the same time, many of these apps allow them to research eligible providers. The use of digital continues in pre-registration. Upon arrival, consider having patients verify information on a tablet or a kiosk rather than paper forms.
In the past, insurance eligibility happened by phone call and typically after the patient arrives. Today, hospitals have the opportunity to check eligibility and benefits during registration. Insurance verification can be done in real-time. In some cases, providers are able to collect payment information before a visit or procedure.
Transparency early in the process prevents future headaches. Both patients and providers benefit from the patient receiving cost estimates and quotes upfront.
- Implement Modern Payment Options:
Hospitals benefit from offering a variety of payment options. For this reason, paperless billing is a key factor in transforming the revenue cycle. How often do patients receive a paper statement, only to lose it or not see it in the mail?
Consider more modern payment options such as online payment initiated by text and email. Text messages are extremely convenient. The text messages provide a web link that allows patients to directly pay without having a balance statement in front of them. This easily removes the hassle of needing to be at home to make payment. Payment can be completed anywhere – even at work or the grocery store. As another option, patients who scheduled their appointment on a phone app are likely to pay their bill on an app. Technology that makes payment more simple and convenient for patients is likely to pay off for hospitals.
- Focus on End of Cycle – Addressing denied claims:
At the end of the RCM process comes an often overlooked opportunity. How does your staff address denied claims?
Tip: Be sure to review ERISA with your revenue cycle team.
Most private-sector health plans are subject to the Employment Retirement Income Security Act (ERISA) of 1974. ERISA law can be leveraged when reimbursement is lower than expected and other appeals have been unsuccessful. Most hospitals are unable to dedicate the time to properly file an ERISA appeal. This has consequences because making the effort to utilize ERISA might impact up to 80% of a hospital’s commercial claims and 60% of a hospital’s total revenues.
Consider hiring an outside specialist team, such as Auraven, to help to uncover which claims might be impacted by an ERISA. Most often, revenue recovery services can be added without impacting other revenue cycle management programs already in place. Dedicating time to ERISA review will offer a return on lost revenue.
During the lengthy hospital revenue cycle, there are many opportunities for patient bills to remain unpaid. The end result is that your hospital loses out on valuable, hard-earned revenue. The key is to transform Revenue Cycle Management within your organization. These transformation steps offer ways to produce sustainable operational improvements across your revenue cycle.