Providers Unprepared for Revenue Cycle Changes

Revenue cycle management in the nation’s healthcare industry is ill-equipped to handle market forces, a recent report from the HIMSS Revenue Cycle Improvement Task Force contends.


Revenue cycle management in the nation’s healthcare industry is ill-equipped to handle market forces, a recent report from the HIMSS Revenue Cycle Improvement Task Force contends.

“Rapid growth in consumer payments, reduced payer reimbursement rates, an ever changing regulatory environment, and shifting consumer expectations have all contributed to the challenges facing RCM,” according to the report. “The current approach of ‘bolting on’ new technologies and reworking internal processes will not sufficiently address these challenges.”

Also See: Tech Shifts Support Value-Based Payments

The report from the 60-member task force lays out the current work to date assessing the state of the market and the challenges, as well as a vision for the consumer financial experience of the future and how that affects stakeholders. In 2016, members will focus on solutions.

As more provider revenue comes from patients, providers must find ways to encourage early payment before the bill turns into bad debt. That requires industry-wide collaboration to create a new revenue cycle model that puts consumers and quality care at the center of the RCM process, and providers can’t count on current processes and technologies to make the change.

For instance, providers have designed their revenue cycle systems and process around business-to-business relationships with government and commercial insurers. Now, they need new ways of doing B2B with consumers, according to the report. The Centers for Medicare and Medicaid Services estimates out-of-pocket expenditures for consumers will total $420 billion, up 68 percent since 2007.

Payers also are not immune to the new financial dangers, the report states. “If providers are unable to find a way to improve their collection of consumer payments, the increase in consumer payments is expected to lead to an increase in bad debt rates, putting increased financial pressure on providers. This could translate to a demand for higher reimbursement rates from payers.”

The insurers could respond by increasing premiums, but that would be difficult in an environment of higher regulatory oversight and a market already rebelling against rising premiums. The report is available here.

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