Top 10 Challenges in Hospital Revenue Cycle Management & Their Solutions
If you have encountered or been employed in a healthcare institution, you likely understand the significance of medical claims and how their rejection can pose financial challenges to your revenue cycle. The administrative tasks within a healthcare facility differ from those in other industries, given the unpredictable nature and intricate procedures involved in clinical treatments, spanning from patient appointments to account closure.
These non-medical responsibilities encompass comprehensive documentation, eligibility verification, demographic data entry, billing and coding, and the submission of medical claims. Any oversight in a single step can result in claim rejection. Consequently, an inefficient revenue cycle management system can result in an accumulation of uncollectible debts, lacking a systematic approach for resolution.
• Coding & Billing
Effective medical coding and billing are crucial for any healthcare practice. When done accurately and promptly, they contribute to a smooth revenue cycle, directly impacting the practice’s financial health. However, the reality often differs. According to a report from the National Health Insurer, approximately 20% of the claims paid out are incorrect, resulting in healthcare organizations experiencing losses ranging from 4% to 12% of their entitled revenue.
To ensure your organization receives the correct reimbursement, it’s imperative to have skilled and reputable medical coders and billers on your team. These professionals should excel in denial resolution, claim follow-up, bill adjustments, claim appeal submissions, and other related tasks. Alternatively, you can consider partnering with an experienced vendor who specializes in ICD-10 and ICD-11 coding systems. This strategic approach not only safeguards a positive cash flow but also enhances your overall revenue cycle.
• Compliance Standards
To ensure the security of a patient’s personal information and prevent any privacy breaches, it’s crucial for your revenue cycle management system to align with the Healthcare Information Portability and Accountability Act of 1996 (HIPAA). Violating health care fraud and abuse laws can lead to penalties and have severe consequences for your medical practice. HIPAA outlines several mandates:
- Standardization of medical codes
- Regular compliance audits of the facility
- Electronic filing of medical claims
- Secure workstations to prevent breaches
- Restricted access control to medical records, allowing access only on a need-to-know basis
- Password-protected access to software and online coding tools
As a healthcare provider, it is your responsibility to uphold the privacy, security, and confidentiality of protected health information (PHI) by billing transparently and adhering to all the required protocols and guidelines set forth by HIPAA.
Utilizing Information and Communication Technology (ICT) plays a crucial role in saving both time and healthcare costs by facilitating the swift exchange of information across various healthcare settings. This enables physicians, doctors, and clinicians to access and integrate patient data seamlessly. However, achieving interoperability, which involves the effective communication and exchange of information between different IT systems and applications, remains a significant challenge.
The persistence of legacy systems in hospitals is a major obstacle to interoperability. Additionally, the autonomous nature of health information systems, with diverse modules and nomenclature for different processes and procedures, further complicates the attainment of interoperability.
By adopting standardized healthcare terminology, implementing a cohesive strategy, and ensuring a user-friendly interface for ICT tools, healthcare organizations can enhance interoperability and address challenges in healthcare information technology. This becomes particularly important given the dynamic nature of medical regulations, and achieving interoperability can substantially alleviate issues related to data exchange among doctors, hospitals, labs, patients, and pharmacies.
• Widening Gap between Business and Clinical Side of Healthcare
The crucial non-medical elements of the healthcare revenue cycle, such as insurance verification, coding, billing, claim follow-up, collections, appeals, and payments, all fall within the domain of providers’ revenue cycles. Consequently, hospitals allocate a substantial portion of their revenue to enhance clinical outcomes by training both clinical and non-clinical staff in administrative tasks.
The multitude of tasks spanning various disciplines can be overwhelming for many healthcare organizations, leading to ineffective healthcare revenue cycle management.
To address this, one effective approach is to separate non-medical tasks, such as medical billing, from the core business functions. By doing so, doctors are relieved from the need to acquire additional competencies beyond their clinical expertise. This not only streamlines operations but also allows healthcare professionals to focus on delivering enhanced value to their patients.
• Maintaining a Consistent Cash Flow
According to various research reports it has been observed that as much as 10% of claims may not be accurately paid. The financial well-being of a medical organization is evident in a steady cash flow, and a strong accounts receivables system is reassuring. However, if there are concerns about receivables, proactive steps should be taken to improve collections and enhance the overall cash flow.
To address this, one effective strategy is to identify the critical elements of the healthcare revenue cycle and consider partnering with a specialized provider offering hospital revenue cycle management services. This collaborative approach can bring expertise and efficiency to the revenue cycle, ultimately contributing to a more robust financial position for the medical organization.
• Data Analytics
The transformation of the healthcare industry is on the horizon, and data analytics is set to be a game-changer. It has the potential to optimize not just a clinician’s time but also cash flow and health information. Despite this potential, many healthcare facilities are slow to embrace the untapped power of data analytics. They often stick to outdated tools, work with inexperienced vendors, and rely on non-technical staff.
As a healthcare provider, making the shift to the latest statistical, mathematical, and analytical tools can save significant manual effort in handling administrative tasks. Embracing healthcare data analytics allows you to:
- Bring visibility through powerful solutions.
- Pave the way for precision medicine.
- Utilize genomics and health data to advance clinical research.
- Improve the quality of care with personalized patient information.
- Enhance computational medical treatment.
- Strengthen the clinical decision support system.
By leveraging these capabilities, healthcare providers can not only streamline their operations but also usher in a new era of personalized and efficient patient care.
• Adopting a Patient-Centric Approach
As a healthcare provider, partnering with medical billing companies can be a smart move to enhance productivity and make better use of your staff. It’s essential for doctors to focus their time and energy on patient care rather than dealing with the challenges of managing hospital revenue cycles.
Delivering high-quality care and value to patients is crucial for the sustainability of your hospital. At the same time, it’s important to strike a balance and avoid overburdening patients with excessive costs, ensuring they continue to choose your services in the future. Prioritizing patient well-being and efficient revenue management can contribute to the long-term success of your healthcare practice.
• Maintaining Low Average, A/R Days
An essential aspect of enhancing healthcare revenue cycle management involves optimizing the claim submission process. The quicker you can reduce the days in accounts receivable (A/R), the faster you’ll receive payments, ultimately maximizing the revenue rightfully due to you.
To achieve this, it’s crucial to formulate a strategic plan for maintaining low A/R days. Setting benchmarks for the age of claims is also beneficial; ideally, most days in A/R should be under 50. Any claims aging beyond 90 or 120 days should trigger a follow-up to address unpaid claims. Additionally, it’s helpful to identify patient accounts that may warrant extended time and separate them from the rest of the accounts for focused attention. This approach ensures a proactive stance in managing the revenue cycle for optimal financial outcomes.
• Duly Follow-Up with Payers
As mentioned previously, 10% of claims face rejection on the initial submission. Without a proficient team managing your hospital revenue cycle, these rejected claims can accumulate, leaving you with a backlog of unresolved claims lingering at your facility for an extended period.
Taking proactive measures to follow up with payers allows you to pinpoint gaps in your submitted claims. This, in turn, provides valuable insights into improving healthcare revenue cycle management.
Key areas to focus on include:
- Consistently reviewing the time difference between the date of service and the date billed.
- Addressing issues related to cancellations and no-shows.
- Analysing reimbursement turnaround times.
- Identifying trends in claim denials.
By addressing these aspects, you can streamline your revenue cycle management, minimize rejected claims, and ultimately enhance the financial health of your healthcare facility.
• Staff Training
One of the primary challenges in managing the revenue cycle for hospitals is having inadequately trained staff in the healthcare facility. Investing in training for both clinical and non-clinical staff can yield various benefits, including:
- Employee Retention: Well-trained staff tends to develop loyalty to your practice, contributing to higher retention rates.
- Boosting Staff Morale: Training programs can enhance the morale of your staff, creating a positive work environment.
- Job Competency: Training sessions can significantly improve the job competency of your team, leading to more efficient operations.
- Enhancing Patient Value: A well-trained staff is better equipped to provide improved value to patients, enhancing overall patient satisfaction.
Additionally, as a healthcare provider, it’s advisable to avoid getting directly involved in day-to-day training sessions to maintain focus on your regular practice. Outsourcing hospital revenue cycle management to a proficient vendor can be a strategic move, saving valuable time and resources while ensuring effective management by experts in the field.
Partner with ACCRO (UAE & Middle East Region) & ASHCONN (Qatar) - The Best Hospital Revenue Cycle Management Services Provider
ACCRO & ASHCONN provides comprehensive hospital revenue cycle management services tailored for clients in Qatar. As a healthcare service provider compliant with the Health Insurance Portability and Accountability Act (HIPAA), ACCRO & ASHCONN specialize in diverse aspects of healthcare organizational solutions. Our offerings encompass end-to-end hospital revenue cycle management services, catering to the needs of healthcare providers and payers alike. By leveraging our services, you can effectively reduce operational costs in the healthcare sector while optimizing and streamlining the revenue cycle management process.
We understand and address the challenges prevalent in hospital revenue cycle management within the healthcare industry. Our commitment extends to upholding the highest ethical, legal, and practical business standards in the healthcare domain. With a proven track record of successfully executing numerous projects across Qatar, we bring a wealth of experience to meet the unique demands of healthcare organizations in the region.