5 revenue cycle management trends that will drive adoption of automation, data-first processes, employee effectiveness and virtualization
Many physician practices are facing a harsh reality as they enter 2022: The revenue cycle processes and technology that have traditionally produced an acceptable bottom line are no longer delivering.
Tectonic shifts in the way healthcare organizations are reimbursed are unearthing the shortfalls of reactive systems that don’t get ahead of claims issues, denials management and the rapidly growing bad debt associated with patient responsible balances.
And the primary culprit? Access to the kind of structured data that can help providers move from basic intelligence to effective intelligence—a model that enables users to execute tasks more effectively and measure the financial outcomes of work effort. Going deeper, providers need to have real-time visibility into their effective intelligence quotient— the effectiveness and bottom-line impact of each revenue cycle team member. Simply put, practices need to answer the questions: “Are staff leaving money on the table?” and “Who are my most effective team members?”
This depth of understanding comes from having an advanced infrastructure supported by algorithms that comb through data in real-time and support more effective workflows—a model that goes beyond access to data that drives productivity alone. Employees who appear productive based on a certain level of activity may be missing the mark in terms of how to produce the most ROI. Revenue cycle strategies that ensure the most complete capture of revenue must embrace a level of analytics that goes beyond what most practice management and EHR systems alone can support.
As we enter 2022, providers with proper alignment of people, process, and technology to support effective and actionable intelligence, workflow automation and financial clearance processes are poised to maintain a sustainable financial outlook and maximize margin. Here are five reasons why.
1. Growing labor and staffing complexities
Severe staff shortages across the board, including qualified billing talent, are wreaking havoc on healthcare organizations. Access to workflow automation tools will be key to helping practices make the most of available staff resources. Administrators will need transparency into workflows to ensure staff – especially remote staff – are not just productive, but also most effective in the use of their time.
Understanding staff effectiveness can be the difference between having a billing team that generates revenue and one that is losing revenue. While providers today can’t afford to lose an effective employee, they also can’t afford to keep one that is ineffective. Revenue cycle leaders must have the right tools in place to identify the difference.
Many providers are finding that virtualization is a game-changer for recruitment and retention of effective staff. Now that the pandemic has kicked open the work-from-home door, billing staff are increasingly looking for options that promote safe work environments and greater work-life balance. The right framework of workflow automation and virtualization can support recruitment and retention strategies by allowing billing staff to work from home and giving administrators visibility into daily activity.
Increasingly, many providers are simply fed up with trying to find and retain effective billing staff and are turning to outsourcing. However, finding the right billing vendor can be complicated. Many billing companies may leverage offshore workers which can cause delays and communication issues. Additionally, the vendor must-have technology that provides “real-time” transparency into revenue cycle performance and allows a provider to monitor and understand the performance and effectiveness of staff responsible for getting claims out the door and paid timely.
2. Need for greater margin
Many practices today are weighing the pros and cons of remaining independent or attracting equity investors. In either case, one truth is certain: Financial margin will be king in 2022. The tight operational constructs that have characterized the past couple of years will not be sufficient for future positioning, sustainability, or growth.
For example, many providers are now recognizing their net collection rate is well below benchmark. In fact, many don’t even know how many pennies on each dollar billed are being adjusted to non-contractual allowance. Maintaining a relevant margin going forward requires real-time visibility into staff effectiveness, financial health and the ability to work smarter—or, having access to effective intelligence. These dynamics are creating significant demand for technology-enabled, automated processes to improve the outlook, which, in turn, is driving expectations for rapid growth of the revenue cycle management market. The bottom line is keeping a lean and effective staff and minimizing avoidable write-offs will be of the utmost importance in 2022 and beyond.
3. Disparate data and systems limiting ability to gain intelligence
To understand and optimize financial health, administrative teams will need to extract deeper insights from their data to inform financial forecasting and effective intelligence. The data necessary to understand effective intelligence doesn’t exist in traditional practice management (PM) or EMR systems alone. The only way to get to this level of insight is with workflow automation solutions that require staff to document exactly what they have done in the revenue cycle. This data can then be structured and stored, allowing a practice to measure the financial outcome against the work effort involved. It is imperative to have this level of intelligence on staff actions and financial outcomes for practices to maintain profitability.
For large multi-location practices and those leveraging multiple systems, this often means bringing disparate data together in a central repository via a data warehouse. Once centralized, providers can utilize advanced analytics to instantly differentiate between total A/R and the actual value—including denials, past due patient balances, claims that have yet to be filed and partial pays. They can help identify new cash opportunities, root cause issues and measure the effectiveness of process changes.
4. Automation of manual processes is key amid resource deficiencies
It’s true that the healthcare industry is struggling with a severe shortage of qualified billing staff, yet for many practices, the reality is that they are “overstaffed” due to a lack of data and outdated processes. While EHRs and practice management software lay the groundwork for amassing data, they cannot provide the intelligence needed to inform more efficient and effective revenue cycle processes and people.
Billing teams need work drivers and automated work queues to streamline workflows and remove choice from daily tasks. On average, 80% to 90% of outstanding claims do not need to be worked on a daily basis. A workflow automation solution will also capture the right structured data necessary to inform whether the staff is effective or not.
The right infrastructure of analytics and automation combs through existing claims and directs staff to daily tasks that will speed the revenue cycle and generate the most return on investment. This approach to workflow takes the concept of “more productive” to “more effective.”
5. Demand for self-service and better patient financial experiences
As HDHPs continue to be the plan of choice for many employers, patients will continue to be responsible for more of their healthcare bills. It’s an uncomfortable struggle for both patients and providers. For example, a 2021 report revealed that providers currently only collect 55% of what is owed by patients, and it can take up to 3 months to collect that share of reimbursement when not captured proactively.
Rising in popularity since COVID is the concept of a “digital front door.” A number of self-service solutions – apps, portals and kiosks– are available that allow patients to take care of their balances online, check in, fill out paperwork and update demographics prior to arriving at the office. This is a win-win for both patient and provider as it requires fewer resources at the front desk, and patients only have to worry about their actual healthcare when they arrive at the office.
The reality is that most patients want to pay their bills, and they are much more likely to follow through when they are empowered with information from the start. Demand for better information and understanding of healthcare finances is a driving force behind legislation such as the No Surprises Act and price transparency.
While it may seem self-serving in theory, financial clearance strategies—or accurate pre-registration processes that promote the collection of patient payments on the front-end—actually improve the overall patient financial experience. Patients feel better equipped with the knowledge and are not caught by surprise. Yet strategies fall short without the right technological infrastructure in place to support these strategies.
In addition to financial clearance, patients are increasingly demanding flexible payment options including engagement from mobile devices. The ability to support multiple models of payment is critical to optimal patient financial experience going forward.
As we enter 2022, and the healthcare industry continues to pivot with COVID-19 chaos, revenue cycle models that incorporate “effective intelligence” are poised to deliver the margin needed for future sustainability. Providers can level up their strategies through the right in-house infrastructure or third-party partnership, but embracing “data-first” revenue cycle transformation in 2022 will be imperative to a healthy bottom line.
Matt Seefeld is executive vice president of MedEvolve, a provider of analytics, practice management and revenue cycle solutions for medical practices.