Revenue cycle management has always been important for hospitals, but the importance of RCM is even more apparent in today’s competitive – and growing – healthcare environment, especially as consumers start to take on more of the burden of paying for care.
There are growing financial pressures on providers that require a shift in provider and hospital revenue cycle management solutions. In order to successfully make this shift toward more accountable and effective RCM, hospitals need to understand the current and future landscape of revenue management in the medical field.
Here are six things to know about hospital revenue cycle management solutions in 2016 and beyond.
Hospitals Care About Reimbursement
According to a poll from Cardinal Health, reimbursement is the primary concern for hospitals and other providers in the market today. (The second leading concern was high cost of supplies.) Reimbursements are a primary driver of revenue for hospitals, so managing them effectively and ensuring steady cash flow in a timely way is of paramount importance.
Collections Cost More
Hospitals and other providers are finding that the cost of collecting payments has gone up over the years. From 2011 to 2013, the cost of collection went up from 1.9 percent to 2.6 percent for hospitals with the highest RCM performance – and from 2.8 percent to 4.2 percent for hospitals with the lowest performance.
To deal with rising costs of collecting payments, many hospitals are outsourcing their collection services and shifting those burdens away from in-house staff that require higher overhead. Outsourced collection services can reduce the overall cost and ultimately save money.
Hospitals Frequently Underreport Medical Conditions
One problem hospitals face with RCM is underreporting medical condition. A study from Johns Hopkins University School of Medicine determined that underreporting common medical conditions – and under-coding them – can have a disastrous effect on the financial health of hospitals, not to mention their reimbursement rates. These conditions include tobacco use, alcohol use, and obesity in particular.
More Price Transparency Required
In today’s consumer-driven healthcare market, providers are learning that patients – and the government – are moving toward more price transparency in billing. Lawmakers across the country have introduced or advanced measures to eliminate surprise medical bills and increase price transparency in billing. It will not be long before hospitals have to take a serious look at price transparency within its billing and RCM systems.
It May Make Sense to Wait on Billing
A common practice is to bill the patient immediately following the delivery of services. This can overwhelm the patient, though, resulting in delayed and lagging reimbursements because patients frequently do not understand when to pay their bills, or even what to pay. Waiting until the patient’s deductible is met may be a more prudent and overall effective option that can increase reimbursement rates.
Outsourcing Hospital Revenue Cycle Management Solutions May be Best
When polled, 72 percent of hospital CFOs across the country considered outsourced comprehensive hospital revenue cycle management solutions to be the best option right now for their systems. Outsourcing has several key benefits, namely lower overhead and costs and a more efficient, streamlined process that can increase collections and reimbursements.
For more information about outsourcing RCM, contact Medical Billing Management.