Integrated Revenue Management - The Future of Healthcare Finances
Healthcare financial performance has grown more complex. With so many players, rules, and processes, optimizing the revenue cycle involves many pieces. Each stage has intricacies. There are also constant code and reimbursement changes. Practices must be proactive in their workflows and solutions surrounding claim submissions.
Integrated revenue management is key to solving challenges and boosting finances. With this approach, you can address current gaps in revenue cycle management (RCM).
In this article, you’ll learn the ins and outs of integrated RCM. We’ll look at the key components and the benefits your medical practice will see from using it. Then, we’ll wrap up with actionable steps you can take to implement integrated RCM into your organization.
What Is Integrated Revenue Management?
Integrated revenue management (IRM) in healthcare refers to centralizing RCM within a single platform. This technology-enabled solution connects the tasks for each stage of the revenue cycle, including:
- Front-end activities: preregistration, registration, scheduling, enrollment, and eligibility
- Mid-cycle processes: coding and billing
- Back-end functions: claims submission, denials management, payment processing, and collections
When all areas of RCM are in a consolidated workflow, you have greater clarity and efficiency. Integrated revenue management lowers operational costs. It also reduces errors and maximizes your ability to capture revenue.
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What Are the Key Considerations for Integrated Revenue Management?
To achieve this state of integration for your financial management, make sure you have strategies in place like the following:
Defining the requirements for each RCM stage
First, you’ll want to determine what technology, processes, and resources you’ll need for the five RCM stages:
- Preregistration and insurance verification: This stage includes getting the patient ready for care. They need to be able to schedule the appointment and provide their coverage. Obtaining this information enables the ability to verify coverage. The setup of the patient in the system is also more efficient.
- Rendering services and capturing charges: In the second stage, the patient encounter occurs. Providers note services rendered and diagnosis for charge capture necessary for claim submissions.
- Submitting claims: The submission of claims must be complete and accurate. Billers must translate charge capture notes to the appropriate codes and then submit the claims within the required timeframe.
- Receiving payments and resolving denials: If the claims submission is successful, you will receive payment and reconcile your accounts. If payers push back denials, another cycle of submission must occur.
- **Collections:**The end of the revenue cycle is collecting payments from patients. You may have to send several statements and pursue balances when they become past due.
Isolating each stage helps you define its unique needs and the important connections between data and processes.
Data aggregation
Data from many platforms is necessary for the revenue cycle. Sources include electronic health records (EHRs), practice management systems, billing software, and more. You’ll need an integration strategy for this data exchange. It will need to be compliant and secure as well.
Optimizing your tech stack
Overcoming data integration challenges leads to a technology revamp. Look for cloud-based applications that easily connect for all the stages of RCM.
AI opportunities
To support consolidated data and a future-proof tech stack, you’ll also want to look for ways to incorporate AI. AI facilitates things like automated scheduling and denial root cause analysis.
AI can also power more precise coding and charting. Another use case is statistical modeling for propensity to pay in collections.
Cross-departmental collaboration
The revenue cycle involves many stakeholders with unique roles and challenges. Integrating revenue management is more than just technology. You’ll want to develop plans to get stakeholder feedback and involve them in adopting a more optimized strategy.
What’s the Risk of Not Integrating Your Revenue Cycle?
Keeping processes separate or minimally connected drives many financial challenges you face. It’s the inefficiencies, the errors, and the lack of clarity around performance.
Evolving how you manage revenue and the technology you use can seem cumbersome. But the risk of staying where you are is much more uncomfortable. Every practice should develop a strategy. You want to understand user needs and current gaps. Then, find a trusted software partner like DrChrono to help you execute.
The Financial Challenges Facing Healthcare Practices
Poor financial performance often has more to do with process problems than a lack of patients or volume.
A shift to integrated revenue management brings benefits to the revenue cycle. It can solve these common financial problems:
Errors in Billing and Coding
ssues in billing and coding often top the list of healthcare financial challenges. They may occur because of insufficient coding knowledge or simple human error. The more manual the process, the higher the likelihood of this.
Coding changes, improper use of modifiers, missing documentation, and undercoding also contribute to mistakes.
Claims with errors get kicked back and denied, requiring correction. When this number increases, it impacts your cash flow and financial stability.
Staff Shortages Persist
Many practices have been experiencing staffing difficulties. There is currently more demand than supply for many roles. With fewer people, there are consequences. Either you fall behind in accounts receivable or can’t care for more patients.
If you can’t hire more people, you’ll need to lean on the efficiencies of streamlining processes and smart technology.
Registration and Enrollment Downstream Issues
The beginning of the revenue cycle involves everything before the patient arrives. Relying on manual and paper processes for this can be inefficient and error-prone.
Mistakes at this juncture can cause problems later in the cycle. Failing to get prior authorization is an example.
There’s also a lot of time invested in these tasks. An American Medical Association(AMA) survey found that practices spend nearly two business days each week on pre-authorizations.
The challenge highlights how the absence of optimization at the start of the cycle impacts cash flow.
Increasing Operational Costs
It’s more expensive to run a practice, with increased costs across the board—rent, supplies, labor, technology, and more. As a result, profitability takes a hit, making it harder to stay afloat.
Focus on costs you can control. Technology consolidation is one of those.
Patient Financial Responsibility Changes
Many consumers have high-deductible health insurance plans. They then shoulder more financial responsibility. If they don’t understand what they have to pay from the start, you usually end up with past due bills. Then you have to manage the collection.
Some procedures or visits may be too cost-prohibitive for some. This means you see patients less and miss out on revenue.
How Integrated Revenue Management Transforms Healthcare Billing
Financial challenges can be solved with the right strategy, processes, and technology. Integrated revenue management is the foundation for this. It can drive improvement in your revenue and billing processes in all the ways listed below.
Unification eliminates fragmentation.
If each stage of the revenue cycle occurs in silos, you have limited visibility into what’s deflating financial performance. With an integrated revenue cycle, you unify the system and gain real-time insights. These have great value for everyday and long-term planning.
Automation minimizes staff strain.
You don’t want to get behind on billing. It may be inevitable now because of staffing shortages. By adopting a system that uses automation, each task takes less time. Some don’t even need human intervention. Claim submission is timely and fast.
There are many chances to use automation in an integrated revenue cycle, including for:
- Scheduling
- Patient eligibility verification
- Payment verification
- Claims processing
Sophisticated technology identifies issues.
Failures in the revenue cycle cost you time and money. The best way to combat this is with AI-assisted coding and charge capture.
AI also enables quick analysis of problems related to denials, collections, or other areas. When you know where the weaknesses are, you can address them.
An integrated system saves you money.
Systems that don’t connect cost you both money and time. Moving forward with an integrated system makes more financial sense. You’ll pay less for a centralized solution than individual programs.
FROM ONE OF OUR PARTNERS: 8 Tactics to Improve Revenue Cycle Management for Your Practice
Security and Compliance Considerations
You must consider security and compliance when making any changes to your revenue cycle operations. Protected healthcare information (PHI) is present in all the data sets relating to RCM. Sharing it between systems must meet the requirements of HIPAA. That includes using encryption and other data security best practices.
As a compliance-minded practice, you must review any areas of risk in terms of remaining compliant. As you architect a new tech stack, ask security questions.
The technology you use to integrate your revenue cycle should also have audit features. The Office of Inspector General (OIG) can subject you to these at any time.
Other compliance program considerations include:
- Documenting policies and procedures regarding PHI usage in revenue management
- Training employees regularly on handling PHI
- Continuous risk assessments for the technology used
- Ensuring software is always the most up-to-date version to prevent vulnerability exploitation
Adding Integrated Revenue Management to Your Practice
Take these actionable steps to implement integrated revenue management:
- Research software options. Compare each option based on the features for each revenue cycle stage. Also, evaluate their integration, compliance, security, and AI capabilities.
- Discuss the change with staff. Get feedback from those involved in the revenue cycle. Learn what would be most beneficial to them regarding processes and technology.
- Consider the impact on patients. Putting new technology into use at your practice will require some changes for patients. They should improve patient engagement.
- Determine the risks involved with integrated revenue management. Talk to your compliance experts to ensure you follow regulations accordingly.
- Map out a timeline to go from where you are now to the integrated future state. It will involve all the other steps described above.