Revenue Cycle Technology

As revenue cycle challenges accumulate, a new survey suggests hospitals are taking a closer look at automation

July 29, 2022 11:02 pm
  • For hospitals and health systems, survey results show that the ongoing labor crunch in revenue cycle operations has provided an impetus to expand process automation.
  • Automation can be incorporated throughout the revenue cycle, and many organizations have room to eliminate redundant systems.
  • An efficient revenue cycle is especially vital in the face of mounting financial challenges.

Results of a recent industry survey indicate a link between automation and the ability of hospitals and health systems to overcome the obstacles they’re encountering in the revenue cycle.

In a June survey of 205 CFOs and vice presidents of revenue cycle, with results released at HFMA’s Annual Conference in Denver, R1 RCM found that 48% of organizations are experiencing a “severe” labor shortage in revenue cycle operations. In addition, 34% reported experiencing a “moderate” shortage. More than three-quarters of respondents estimated the share of vacant revenue cycle positions at between 25% and 50% or between 51% and 75%.

The recognition of a significant labor shortage echoes findings of a survey commissioned by AKASA and conducted in December by HFMA. At that time, 40% of more than 400 healthcare finance leaders reported having more than 10 vacancies in their revenue cycle operations.

“If you don’t have the people, you can’t do the work,” Amy Raymond vice president of revenue cycle operations at AKASA, said in a May news release about the survey findings. “For hospitals, lack of staff within the revenue cycle means you aren’t getting paid.”

Even as respondents to the R1 survey (76% of those experiencing a labor shortage) anticipate the situation improving by the end of the year, they are looking for ways to augment their workforce. Among organizations dealing with a shortage, key steps being taken in the revenue cycle include:

  • Adopting automation technologies: 56%
  • Expanding employee benefits/compensation: 51%
  • Partnering with a strategic RCM company: 44%
  • Consolidating job functions: 40%

The message from health systems is: “We want to use our talent, our people, for conducting the higher-order decision making. And we should let automation or technology in general handle the more mundane activities that can be managed that way,” Gary Long, executive vice president and chief commercial officer at R1, said in an interview.

“Quite honestly, every other industry in our country has adopted that model,” Long added.

Many processes could be updated

As technologies such as machine learning and natural language processing become more widespread, Long noted, “You can automate almost every aspect of the revenue cycle process from the time a patient enters the health system through the financial clearance process.”

As explained in an hfm cover story earlier this year, initiatives to automate revenue cycle processes should begin with an organization’s electronic health record. “Before looking at new solutions, you should be looking at how you can maximize your existing solution,” said Kevin Ormand, revenue cycle practice leader at The Chartis Group.

Organizations should consider applying automation to steps such as coding, claims processing and reimbursement tracking, Long said.

“All through that process, there are handoffs and friction points that occur inside of a health system and [among] all of its stakeholders that create the inefficiency,” he said.

Achieving better workflows between providers and payers is an altogether different challenge. The No Surprises Act may spur progress through a pending requirement for providers to send health plans a good-faith price estimate for services, with plans in turn furnishing an advanced explanation of benefits to patients.

But in general, “In a fee-for-service world, it doesn’t necessarily incent the right behaviors for that to be sustainable,” Long said. “Over time, if we actually move to a more quality-based reimbursement model, some of that friction can be alleviated.”

In a question about potential solutions to the challenges their organization is facing in the revenue cycle, 24% of respondents said they are looking to eliminate redundant systems.

Organizations “may have purchased something a year ago and it’s sitting on a shelf, but they’re still paying for it,” Long said. “That just tends to happen because there’s a lot of disparity that goes on inside of a large system where those decisions aren’t necessarily crystallized.”

The stakes are growing

A high-performing revenue cycle arguably never has been more vital than it is today. In the R1 survey, respondents cited various daunting challenges, with a 46% plurality saying their organization was behind on its revenue goals (40% said their organization was on target).

When asked about their top concern regarding the financial health of their organization, respondents chose:

  • Increasing costs: 25%
  • Risk of recession: 22%
  • Shrinking margins: 21%
  • CMS/payer reimbursements: 17%
  • Unidentified revenue leakage: 13%

“It’s not any one thing. It’s a confluence of things that are all happening to organizations simultaneously,” Long said. “The environment is definitely creating a very difficult situation for financial leaders and systems.”

There was almost unanimous agreement (96%) that RCM operations would come under additional strain as the peak of the COVID-19 pandemic recedes further and more patients return for elective services. And the increasing burden affects the patient experience in the following ways, according to the survey:

  • Care delays: 49%
  • Patient billing errors: 48%
  • Long hold times for customer-service calls: 45%
  • Cancellations/postponements: 44%

“The ways in which organizations have tackled these types of challenges in the past are not the same ways they’re going to be able to tackle them in the future and have the same types of results,” Long said. “You’ve got to do something different.”

One example of embracing a new paradigm: finding optimal ways to integrate remote staff.

“I don’t think it’s ever going to go back fully to the way it was where people were sitting in cubicles five days a week processing claims,” Long said. “Of course, that work will continue, but it’s going to continue in different environments.”


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