Common Challenges in Revenue Cycle Management and How to Overcome Them
Revenue cycle management (RCM) is a complex ecosystem with many steps. It begins when a patient makes an appointment and ends with reimbursement. As a result, challenges in revenue cycle management are prevalent. They impact every stage of the patient journey. Identifying and addressing these issues is critical to a healthy financial picture.
Learn about the most common concerns with RCM. Then, get tips on how to overcome them with the right processes and technology.
What Is Revenue Cycle Management?
Revenue cycle management is the process of managing the financial aspect of patient care, including billing insurance, receiving reimbursements, or collecting payments. It starts with insurance eligibility. The cycle continues with coding those to claims. It also involves collecting and tracking payments from patients, insurance companies, or other payers.
The RCM landscape connects financial and clinical components of care. Its purpose is to ensure that providers receive appropriate compensation. Within the cycle, accuracy and efficiency in billing and coding are crucial. Otherwise, you face denials and delays. According to claims analysis by KFF, 18% of in-network fell into the denial bucket. Some plans had rates as high as 80%.
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The Importance of Revenue Cycle Management in Healthcare
Managing revenue effectively enables you to keep your financial health in check. You do this by creating processes and using technology. These help you identify challenges in revenue cycle management. Uncovering these leads to improvements.
Delivering excellent care is your mission, but you must also optimize revenue generation. A streamlined RCM workflow strengthens your financial foundation.
When revenue cycle management involves many tasks and workflows, issues in any of them can impact your cash flow.
RCM Steps: Intake to Collections
RCM includes five steps:
Preregistration and Insurance Verification
Once someone makes an appointment, your staff enters them into the system. They receive insurance information and verify coverage. If pre-authorization is necessary, you’ll request it.
Services and Charges
Next, patients have their appointments. Providers document the services provided. Those then correlate with charges. You also collect any co-payments or deductibles.
Submitting Claims
In this step, your billing and coding specialists translate physician notes into codes. Current Procedural Terminology (CPT) and the International Classification of Diseases, Tenth Revision (ICD-10) are the two main systems. Accuracy and timeliness in submittals prevent delays in reimbursement.
Receiving Payment
If claims receive approval, you receive reimbursement from payers. Medical billing staff reconciles those with outstanding balances. If there is a rejection or denial, your billers must investigate and resubmit.
Patient Collections
Insurers aren’t the only payers. Patients can also be financially responsible for care. That means the complete revenue cycle includes elements like issuing patient invoices and timely reminders for payment. Likewise, providing convenient ways for your patients to pay invoices, such as through online payment portals, is a key to the revenue cycle.
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With all these steps, gaps, errors, and inefficiencies can be problematic. Next, let’s review the common challenges in revenue cycle management.
How to Overcome Common Challenges in Healthcare Revenue Cycle Management
To remedy a problem, you have to get to the root cause. These RCM challenges are the most common:
Patient Access Isn’t Streamlined
At the beginning of revenue cycle management, you perform patient intake. Part of this is their insurance information. The first capture of this data impacts future claim denials or acceptance.
Using paper processes at the time of appointment can create errors. It’s also inefficient. A recent payment trend report found that 78% of providers still rely on paper and manual processes.
By using a patient portal, people can provide information digitally. It’s a better experience for patients, too.
Collect Recovery Rates Are Low
Self-pay and high deductibles translate to more patient collections. Chasing patients for payment can be labor intensive. In fact, 55% of providers still do this mainly with mailed statements. It slows down the revenue wheel, taking more than two statements to collect those in full.
Correcting this should include many strategies. Transparent estimates before services provide patients with their responsibilities. You now have to submit this per the No Surprises Act.
Offering multiple payment options and processing online can help. Additionally, you can work out payment plans before services.
Adopting RCM technology to support collections is also a good practice. Such tools can automate parts of the workflow. It may also prioritize accounts most likely to pay.
Staff Spend Too Much Time on RCM
Many practices are working short-staffed, so team members may be wearing many hats. Revenue management is critical, but patient care is your priority. Outdated processes and a lack of modern technology bog your people down. Upgrading can give you new digital tools to improve productivity.
Billing and Coding Errors
Denials disrupt RCM. Many times, billing and coding errors are the reason. Payers stated that the leading cause for denials was errors in the claim.
Errors can include:
- Unbundling codes
- Using modifiers incorrectly
- Unlisted codes without documentation
- Claims not in alignment with the National Correct Coding Initiative
There are many chances for error. They contribute to lost money and time. Manual processes make them more prevalent. If rejected, more work is necessary. It becomes a strain on resources.
Many practices turn to robust revenue cycle management platforms. They automate tasks, review for errors, and provide the most up-to-date billing codes.
Visibility into RCM Is Murky
Data on RCM delivers insights. Yet, most practices lack this view. You may know that problems keep repeating but aren’t sure how to address them.
Data and analytics are critical in identifying root causes and fixing them. Achieve this with a holistic view of RCM. Integrating disparate systems and data silos allows you to be more proactive.
Steps Your Practice Can Take to Start Overcoming Challenges in Revenue Cycle Management
Solving challenges in revenue cycle management involves many tactics. These steps can get your practice to a healthier financial outlook:
Audit Your Current RCM Process to Spot Issues
A good first step for any practice is a revenue cycle management audit. In this exercise, you’ll go through all the steps of RCM. Look for obstacles and blockers within the tasks.
An audit can also help you define the main reasons for claim rejections. Another takeaway from this process is outlining areas for improvement. You may uncover gaps in your workflows and software.
Once you know the issues, you can determine solutions. Typically, the solution you need the most is more effective technology. Seek medical billing software with automation, charge capture, and claim follow-up features.
Reduce In-House Staff Strain by Outsourcing
If your key challenge is a need for more resources, an outsourcing model is an option. RCM services offload the work to medical billing experts. They act as an extension of your team, streamlining claim submissions.
With an experienced partner, your claims will be more accurate. You can expect fewer claim denials and faster reimbursement.
Optimize the Revenue Cycle with Claims Scrubbing and AI
Claims scrubbing is the process of reviewing submissions for accuracy. You can use software or services to do this. It reviews the information for accuracy and completeness.
Historically, claims scrubbing was manual. Thus, it was inefficient and didn’t catch all mistakes. By investing in RCM technology or outsourcing, you can scale this. Your staff doesn’t have to spend hours on these tasks either.
Choosing software with AI tools reduces manual medical coding errors. With so many points for failure, AI coding finds most of these. It’s like having an expert-level coder, only faster and more cost-effective.
An AI engine can also read your notes in real-time. After analysis, the tool provides clinical documentation improvement tips. The feature reduces denials. It ensures you get the most reimbursement and reduces admin burdens.
Improve the Patient Experience
With an online patient portal, you can enhance their experience. Patients can control their accounts by viewing their visit history. They can submit their insurance information and securely make payments.
You improve patient engagement with access and transparency. It can reduce calls to your office and accelerate payments.
Most consumers make payments online. They now expect this option for medical bills. In fact, 67% of consumers prefer to pay for medical bills online.
Access Valuable Data for a 360-Degree View of RCM
A lack of insight into RCM is a common challenge. Ensuring you have an analytics engine in your RCM platform provides an expanded view. Dashboards offer real-time views of the revenue picture. Being able to run a variety of reports keeps you informed.
With this access, you have a complete view of revenue management. What you learn from this data helps you further improve operations.
Create an RCM Compliance Program
Revenue cycle management compliance ensures adherence to regulatory requirements. Compliance threads through the entire cycle. They govern billing, coding, documentation, and data privacy and security. They include laws and industry standards, such as:
- HIPAA (Health Insurance Portability and Accountability Act)
- ACA (Affordable Care Act)
- FCA (False Claims Act)
- Payer-specific policies
Noncompliance can impact reimbursements or result in fines. Your RCM compliance program should include:
- Policies and procedures
- Training and education
- Risk assessments
- Reporting and investigation protocols
- Corrective action and remediation
The technology and processes you use must consider compliance. Having one supports the accuracy and timeliness of coding and billing.
Remedy Challenges in Revenue Cycle Management with DrChrono by EverHealth
Improving revenue cycle management begins with understanding your challenges. Many will likely point back to the need to modernize your technology. With DrChrono by EverHealth, you can implement a connected, streamlined, and robust software solution.
DrChrono by EverHealth provides a robust healthcare technology platform. Its features meet the needs of today’s practices. With its electronic health record (EHR) and medical billing software, DrChrono by EverHealth simplifies RCM. Reduce administration burdens with technology. You can then focus on what’s most important—your patients.
Explore how easy it is and all its customizable features by setting up a free account.