Co-written by Jeff Forgang
As the revenue cycle management (RCM) market matures and RCM systems evolve, providers are looking for ways to maximize their revenue while facing declining reimbursements, higher costs, and the need to reduce processing errors.
The mid-revenue cycle management/clinical documentation improvement market is expected to reach $4.5 billion by 2023, according to a Markets and Markets report. The report found growth in the mid-revenue cycle management market attributed to healthcare provider expectations for improved data accuracy in clinical documentation, maximizing revenues while minimizing coding errors, and shortening the claims reimbursement cycle.
Improving the revenue cycle
One area not to overlook is enhancing the revenue cycle. After making significant investment in RCM system implementations, healthcare organizations are refining their systems to get the most out of them. This includes improved documentation and clinical workflow through better clinical documentation that can lead to higher reimbursements.
M & A consolidation
Provider consolidations have led to system convergence, which means many organizations are running multiple RCM platforms. The intent is that they’re working down their old systems with an end-goal of moving to a single system.
Multiple RCM systems, lead to various workflows. As you work through the clinical workflows, take the opportunity to improve the RCM processes, too. Improving the revenue cycle means a myriad of things, such as performance improvements, outsourcing the billing functions, enhancing clinical workflows and getting better documentation.
The key to improving clinical workflows means providers need to get as specific as possible in their documentation. Examine how providers document clinical procedures, and look at your organization’s claims denials for suggestions on areas where clinical documentation may have fallen short in the past. Determine why claims were denied. From that information, you can determine what improvements and enhancements can be made moving forward.
Payment delays and write-offs from claim denials represent an increasing financial concern for hospitals, health systems and other providers. Despite collaborative efforts, the average 350-bed hospital saw denial write-offs increase by 79 percent between 2011 and 2017, from $3.9 million to $7 million, according to the Advisory Board.
Some common claims denials include medical necessity, authorization errors, incorrect levels of care, failure to follow the rules from a particular insurer around timely processing, as well as coding, billing, and appeals, or contractual issues. Contractual issues arise when there is an underpayment by a payer for services, such as surgery, emergency department visit, lab or radiology, therapies and observations. Denials can also occur due to misinterpretation of per diems, bundled payments for multiple procedures and carve-outs.
Every hospital should have a denials-prevention program that includes collecting data on why the denial occurred and evaluating any trends. For example, if a patient has had a biopsy, was there an issue with the code and documentation? How might the procedure have been documented differently to improve the clinical documentation and revenue cycle? Were there any issues with the charges, such as with sedation medication or other aspects, because if errors occur in the documentation, there’s no way for the healthcare organization to go back and bill the patient.
Are there issues with pre-authorizations? Has the organization gotten all its pre-authorizations? Do you need to obtain any post-procedure authorizations? If you’ve forgotten to get authorizations before a procedure, look at what was forgotten in the past, why it was forgotten and determine how to not forget it in the future. What can you do ahead of time to make sure you capture all of the revenue and ensure you’re not missing anything?
Financial risk, responsibility
It’s also important for the patient to understand their financial responsibility. Getting prior authorizations and checking eligibility are important so the patient understands how much the procedure costs and their financial responsibility, and how they’re going to pay their financial responsibility for the procedure.
A report by Crowe, found patient access and medical billing collections are among the top healthcare revenue cycle risk for hospitals, physicians, and other provider organizations in 2019.
Crowe said a lack of preparation for new risks can cost healthcare organization not only money, but their reputations at a time when they can least afford to lose them. With value-based reimbursements, every dollar is at risk. If an organization loses that money due to a compliance issue, it can’t make it up simply by adding a dollar of revenue somewhere else.
Improving clinical documentation
If the documentation isn’t there to accurately support what the physician has done, or if the information was not captured during a procedure, the documentation is lost and the healthcare organization has to write off the charges.
That’s why clinical documentation improvements (CDI) are necessary. According to a 2016 report by Black Book Market Research, 88 percent of hospital and physician financial executives said they are actively seeking ways to link care with analytics and outcomes to support consumerism and the shift to value-based payments.
HighPoint Solutions consultants are able to perform a revenue cycle assessment to determine efficiencies within your revenue cycle processes as well as workflows. Please feel free to contact Ann Mendlowitz for additional information on how the HighPoint team can provide efficiencies to your daily revenue cycle activities.
Co-written by Jeff Forgang