The revenue cycle management (RCM) industry is experiencing a wave of innovation as emerging technology-driven businesses disrupt the status quo.
As we look ahead to this week’s HFMA Annual Conference
in Las Vegas, the following areas have seen heightened levels of activity and focus as the industry seeks to accelerate its adoption of advanced workflow automation, data-driven insights, and artificial intelligence-enhanced functionality.
Patient Access and the Acceleration of Patient Pay
Without a doubt today’s evolving, consumer-centric landscape is creating a hotbed of innovation across the RCM continuum. Demand is peaking for patient-facing capabilities that can simultaneously drive cash flow for the provider while consistently delivering high levels of patient satisfaction throughout the billing and collections process. As a result, hospitals, physician groups, and other providers are positioning their organizations to better manage patient receivables as a means of maintaining their financial stability as the amount of patient pay reimbursement continues to accelerate. On the other hand, patients are educating themselves and working to better understand the options when confronted with a major care event and the associated expense. It’s a growing reality that the patient’s portion of the overall healthcare bill is mounting and the potential for personal financial ruin due to medical debt and bankruptcy is of increasing concern.
As we look ahead, we strongly believe that the focus of most patient pay vendors will continue to shift toward the point of patient access as a means of heading off potential revenue leakage and costly omissions, mistakes, and manual work-arounds further downstream in the RCM process. Accurate coverage determination, advocacy/program enrollment, and patient pay estimation are all critical to a successful patient pay strategy. From there the provider can draw on other capabilities to maximize the financial impact of each patient visit (e.g., propensity to pay analytics, point-of-service payments, patient financing and payment plans, etc.).
By aligning with the right vendor partner(s), providers are poised to enjoy numerous benefits that extend well beyond enhanced reimbursement rates and impact operational efficiencies and patient loyalty. The provider’s ability to collect from the patient while maintaining a high level of satisfaction can be immensely challenging. However, with the proper transparency and personalized engagement functionality, the patient is more likely to pay and will come out of their overall experience with greater levels of satisfaction and loyalty to the provider – as measured by a Net Promoter Score (NPS) or HCAHPS survey.
Automating the Painful Prior Authorization Process
Prior authorizations comprise a separate and distinct pain point for providers and are the source of an unusually pronounced point of friction with the payer community. For the uninitiated, providers are required to obtain prior authorizations from payers for certain medical procedures, tests, equipment, and therapies prior to the patient receiving the prescribed treatment. The intention of this process is to lower costs through the application of utilization management and review depending on coverage, payer-specific guidelines, and the clinical attributes of the patient as detailed in their medical record. The front-loading of this approval by the payer theoretically results in fewer denials and less ambiguity in how a patient’s treatment will ultimately be reimbursed.
Despite the proactive intent of prior authorizations, the process is heavily criticized throughout the industry for its high cost, manual workflow burden, and negative impact on care delivery and patient and physician satisfaction. In fact, Health Affairs estimates the annual cost to comply with insurance-mandated prior authorizations is between $23 billion and $31 billion per year. Similarly, a recent American Medical Association (AMA) survey found that physicians encounter 29.1 prior authorizations a week requiring an average of 14.6 hours to complete. CAQH has similarly cited that it takes up to 27 minutes to complete a single prior authorization.
However, true innovation is occurring within the space; an amalgamation advanced technological capabilities – including AI-powered, data-driven workflows; enhanced payer connectivity and data access; an actionable library of payer-specific rules; and automated clinical data extraction – are all coming together to help solve this significant problem for providers. While the challenge is certainly significant, the opportunity and reward results in a far more efficient, near frictionless interaction between the payer and provider. Those companies that disrupt this area within the patient access department will find themselves at the forefront of meaningful value creation through enhanced cost containment and improved clinical outcomes.
Payer-Provider Navigation and Alignment
Friction between payers and providers oftentimes stems from a lack of transparency and frustration caused by navigating variable processes, formats, and requirements specific to each payer organization. In this respect, while providers may blame payers universally, standard EDI formats are limited in terms of the depth and granularity provided to help providers properly fix a claim prior to submission or remediate denials in an efficient, straightforward manner. Payers may certainly be at fault for a lack of transparency, but typically the level of detail providers need can be found with the proper access, expertise, and capabilities required to navigate and extract the necessary data from payer-specific portals and systems. This process includes gaining access to and normalizing Claim Adjustment Reason Codes (CARCs), Remittance Advice Remark Codes (RARCs), and other payer-specific codes that provide a more comprehensive view. A lack of context often results in costly, time-consuming manual workarounds as well as increased denial risk, write-offs, A/R days, and payment delays and errors, among other issues. In this regard, in the absence of detailed reason codes, asking the “right” question is paramount to selecting the correct path forward and remediating the issue in a proactive manner.
A variety of transaction types and related workflows – including eligibility verification, claim scrubbing and submission, claim status inquiries, attachments, and remittances – are among the most ripe for disruption due to the fact they are:
- Still handled manually a meaningful percentage of the time,
- Increasingly complex from an administrative or information exchange perspective,
- Involve specific requirements that can vary by each individual payer, and
- Often require coordination among multiple parties (i.e., primary and secondary payers, clearinghouses, billing companies, financial institutions, other agents working on behalf of the provider, etc.).
An entire landscape of innovative RCM software and analytics companies have emerged that address these critical RCM workflows. The leading organizations have competency around intelligently extracting data, analyzing that data in the proper context, and delivering actionable intelligence into the workflows of the providers’ staff or outsourced RCM service provider. The combination of these capabilities (i.e., connectivity, context, and informed workflow automation) creates the greatest potential to optimize financial performance for the provider while helping accelerate the industry’s progress toward a more highly automated, “frictionless” environment.
We also expect to see the industry accelerate its consolidation of data among various sub-components of the broader RCM continuum as a means of more proactively addressing denials and underpayments at their source. For instance, while intelligent claims status capabilities can help inform and head off a potential denial post patient encounter, 30-50%+ of denials are actually caused by front-end registration issues (e.g., eligibility, medical necessity, authorizations, and data quality issues).
Emerging value-based contracting (VBC) and reimbursement models will only further complicate the process and potentially lead to increased denial rates. As such, it is imperative that providers equip themselves with the proper data-driven strategy and tools to address RCM issues proactively. This objective can be achieved by delivering actionable information to those within the provider’s organization that can make the greatest impact. Further, through machine learning, error-prone processes and other inefficiencies can be automated so that problems don’t reoccur and continue to be a drag on productivity and financial outcomes.
We hope you enjoyed our shared perspectives above, and we’ll look forward to seeing you at the show!