REVENUE CYCLE MANAGEMENT:
Meeting Challenges – Old and New
Healthcare organizations have their work cut out for them when it comes to optimizing their revenue cycle management functions to provide the efficiency and customer service needed to succeed today while also forging ahead to add the capabilities required to support emerging value-based care models. The journey is a formidable one – and could require significant technology investments.
Part of the challenge could emanate from the fact that healthcare organizations are still struggling to reign in revenue cycle costs, even after implementing electronic health records. A study published in the February 20, 2018 issue of the Journal of the American Medical Association showed that even though a large academic medical center was using a certified electronic health records system, the estimated costs of billing and insurance-related activities were still substantial. In fact, the estimated costs of billing and insurance-related activities ranged from about 3% to 25% of professional revenue. More specifically, estimated processing time and total costs for billing and insurance-related activities were 13 minutes and $20.49 for a primary care visit; 32 minutes and $61.54 for a discharged emergency department visit; 73 minutes and $124.26 for a general inpatient stay; 75 minutes and $170.40 for an ambulatory surgical procedure; and 100 minutes and $215.10 for an inpatient surgical procedure.
For many years, Minnie Hamilton Health System, a federally qualified health center that owns and operates a critical access hospital and rural health center in Grantsville, West Virginia, outsourced its revenue cycle management responsibilities to a third party – because the staff at the hospital couldn’t efficiently leverage its EHR to successfully manage revenue cycle management. When the healthcare provider recently transitioned to a new EHR with more robust functionality, it brought the revenue cycle management functionality back in house. The EHR makes it possible to put relevant information in front of the hospital’s billing and coding staff members – making it easy for them to take action and move the revenue cycle management process along.
“We’re a small rural, critical access hospital, so talent acquisition is quite a bit of a challenge for us. That’s why we originally went with the third-party outsourcing,” said Eric Ritchie, COO. The new EHR, however, “allowed us to bridge that gap a little bit by putting the knowledge right on the computer screen. So, all staff members have to do is read it, interpret it, and then take action on it.”
Bringing the revenue cycle in-house has enabled Minnie Hamilton to reduce days in accounts receivable by about 30% within about fourth months. In addition, “by bringing revenue cycle management back in house, you eliminate the overheard of the third party vendor,” Ritchie said.
Perhaps more important, Minnie Hamilton has been able to improve its customer service by relying on its own employees to provide revenue cycle management services. “Our revenue cycle staff members are from the area. So, they are more familiar with who qualifies for benefits under our sliding fee program. They can have a more meaningful conversation with a patient when setting up payment plans. Patients just have an instilled trust when they are dealing with someone that they recognize as being from the area,” Ritchie said.
The value proposition
In addition to making the billing process more cost efficient and patient friendly, healthcare organizations are also tasked with strategically reinventing their revenue