The traditional healthcare revenue cycle was designed to evolve around payer reimbursement. Processes and workflows were pretty much set in stone.
Step 1: register the patient; step 2: verify insurance and eligibility; step 3: capture the charges; step 4: code the claim, and so on.
The lack of automation and interoperability solutions, especially electronic health records, meant most workflows were resource-intensive, manual, and prone to error.
While we’ve made significant strides in updating revenue cycle processes to accommodate patient payments, increasingly complex payer and regulatory requirements and new technologies, many in our industry still see the revenue cycle as a set-it-and-forget-it machine, cranking out claims and getting paid. In reality, nothing is further from the truth.
Today’s revenue cycle is a constantly changing ecosystem in and of itself. To achieve optimal results, we need to reevaluate it through a lens of possibilities. However, to do this, we must first dispel some of the more common myths about what the revenue cycle is and is not.
Myth 1: The revenue cycle is just billing and coding
There’s no mistaking that coding and billing are critical elements of the revenue cycle, but processes that occur prior to coding set the stage for optimal billing. For example, patient scheduling, registration and insurance verification must be thorough and accurate. Mistakes made during these early processes are the top reason for denied claims, and we know that denials are a top concern for healthcare leaders.
Other revenue cycle processes that impact billing include accurate documentation and charge capture, but ensuring charge accuracy to support appropriate reimbursement can be difficult. The most challenging charges are often those that have complex code combinations that make them more prone to error and more resource-intensive to manage. In a survey of revenue cycle leaders, 68% said that up to 10% of their total charges were under-coded, and 56% said that over half of their total charges were over-coded. This accounted for 11% or more of their total charges. Clearly, the revenue cycle involves much more than just coding and billing.
Myth 2: Denials are inevitable and unmanageable
Providers spend an estimated $19.7 billion annually reviewing and managing denials. The time and resources spent researching and appealing these claims mean providers primarily focus only on top-dollar denials. This is understandable, considering the average denial typically goes through three rounds of reviews with payers before being overturned, with each round taking nearly 60 days.
The good news is that most denials can be avoided by streamlining and improving patient access processes to ensure billers have complete, accurate patient demographics and coverage information, as well as accurate charges. This is vital to submitting clean claims, reducing coding issues and payer takebacks, and achieving optimal reimbursement.
When denials do occur, providers can leverage automation technology to identify the root cause of the denials and determine which denials are most likely to be overturned. Automation can also streamline the appeal process to ensure all required documentation is included and that all information is accurate.
Myth 3: Revenue cycle management is only about collecting payments
While it is true that collecting patient payments and payer reimbursements is critical to ensuring a healthy revenue cycle, the scope is much broader. The reality is that a healthy revenue cycle impacts an organization’s short- and long-term financial viability. It’s the foundation of an organization’s ability to maximize cash flow to keep the doors open, pay employees, maintain equipment and support strategic initiatives.
Myth 4: Revenue cycle management has nothing to do with the patient experience
Every part of the revenue cycle has the potential to impact the patient experience. For example, as mentioned earlier, it is vital that patient demographic and coverage information collected during the patient access process is accurate. If coverage information is inaccurate, patients could end up with surprise bills for a service that should have been covered. This could cause them to go into debt or even put off future care to avoid additional medical costs.
Prior authorizations can also impact the patient experience. In a survey by the American Medical Association, 94% of providers said prior authorizations had caused care delays, 80% said they had led patients to abandon treatment and 33% said they had led to a serious adverse event. While efforts are underway at the federal level to simplify prior authorizations, providers must take the steps necessary to stay on top of payer requirements for prior authorizations and medical necessity in order to protect outcomes and avoid impact on patients.
An unorganized, ineffective patient collection process also impacts the patient experience. For example, organizations must do all they can to ensure patients understand their financial responsibility prior to their service when possible. They should also provide billing statements that clearly outline what each amount is for — avoiding medical jargon and abbreviations. Organizations should also offer flexible payment plans up front, not just after the patient asks for it. And it’s imperative to offer patients multiple ways to pay as well. Digital tools like a patient portal, mobile payments, and automated phone payments can make it easier for patients to pay and help enhance patient loyalty.
Myth 5: Technology alone can fix revenue cycle issues
Technologies like AI and robotic process automation (RPA) have the potential to significantly increase revenue cycle efficiencies and staff productivity. However, there will always be a human in the mix. At this time, these new technologies aren’t able to completely replace revenue cycle professionals. For now, their best use is to help staff do their job better by removing manual, error-prone processes and identifying potential issues so they can be proactively addressed.
Facing revenue cycle realities
Today’s revenue cycle is a far cry from the days when providers collected co-pays (if there were any), submitted the claim, and then sat back and waited for a check from the payer. While that’s an oversimplification of how it used to be, it makes the point that our current revenue cycle is a complex ecosystem of continuously evolving processes — none of which work in a vacuum.
To achieve optimal revenue cycle results, providers must take a comprehensive and proactive approach that encompasses all aspects of the revenue cycle together.