Revenue cycle management still viewed as critical by providers
Value-based care may be the future of healthcare, but healthcare organizations still have to dance with the one that brought them—charging fees and collecting payment.
Despite all the advances in technology that have been deployed over the past decade, providers and payers still depend on claims and the resulting payments to keep the lights on.
So it’s no surprise that revenue cycle management remains a significant concern for healthcare organizations, and most healthcare IT executives say they are under pressure to wring improvement out of their computer systems. Factor in ongoing change in bill codes, and pressure to rein in administrative costs, and it’s clear that there will be urgency to get more out of revenue-related systems.
In a recent survey for Health Data Management, nearly two out of every three respondents said revenue cycle management remains very or extremely important to their organizations. Factoring out respondents who said they didn’t know the impact of revenue cycle to their organizations or to which RCM didn’t apply, nearly 90 percent of remaining respondents rated it in those two categories.
However, only a third of respondents indicated that their organizations were either very or extremely effective in managing revenue cycle management, defined as the administrative process that ranges from capturing charges, to submitting claims and bills, to collecting payment and managing the complex accounting process.
The study was conducted by Health Data Management and SourceMedia Research, the research arm of HDM’s parent company. A total of 160 responses, primarily from provider organizations, were received in late 2018.
In the HDM survey, 28 percent of respondents said their organizations were only somewhat effective in revenue cycle management.
Provider organizations are finding the process of improving revenue management has become more complicated in recent years, even as they integrate more information technology into the process. And technology limitations, such as a lack of interoperability, complicate the movement of clinical information that enables efficient claims development and bill submissions.
In testimony last summer before a Senate health committee, David Cutler, an economics professor at Harvard University, told lawmakers that providers spend a lot of time, effort and money pulling information from EHR systems and putting them in a format that is suitable for pay-for-performance calculations. However, he said that technologically there is no reason why EHRs cannot interface with billing systems or automatically submit information for quality assessment.
“You have an electronic medical record system and a billing system that keep separate information, and the two don’t talk to each other,” Cutler pointed out. “So, as a result, you have people involved and it’s extremely costly to do that.”
Part of the problem, according to Cutler, is that providers do not want to give health insurers access to EHR systems because they are considered proprietary. He recommends that the Department of Health and Human Services—working with provider organizations—develop and implement a plan to reduce administrative costs in healthcare by 50 percent within five years through payment simplification, standardized pre-authorization policies, as well as integrating EHR and billing systems.
The HDM survey found that a total of 60 percent of respondents believe that the electronic medical record plays either an extremely critical role (27 percent) or a very critical role (33 percent) in managing their organizations’ revenue cycle.
Automation that improves charge capture also plays a critical role in improving revenue cycle management. Such functionality ensures providers input appropriate diagnosis and procedure codes to facilitate the billing process. A total of 62 percent of respondents highlighted the importance of this technology, with that percentage equally split between those who believe it’s extremely critical and very critical to success in revenue cycle management.
Other technology plays an important role in facilitating revenue cycle management, respondents indicated. For example, a total of 60 percent of respondents said insurance eligibility verified electronically was either extremely critical or very critical in improving revenue cycle management. That electronic interaction between providers and payers helps clear up misunderstandings about payment responsibility, and also facilitates communication between providers and patients about paying their portion of care.
Similarly, a majority of respondents view real-time electronic claims submission and adjudication as critical to success in revenue cycle management. The use of electronic transaction standards was deemed extremely critical by 29 percent and very critical by 27 percent of respondents.
Not all information technology rated as highly in respondents’ eyes, however. Automated payment posting was viewed as either extremely critical of very critical by 51 percent of respondents. Credit-card processing for patient payments at the time of service was viewed as either extremely or very critical by 50 percent of respondents. And automated patient reminders were viewed as either extremely critical by very critical by 37 percent of respondents.