There are many challenges associated with revenue management in healthcare, from insurance eligibility to staffing shortages and a lack of data-driven insights into the revenue cycle.
In this chapter, we’ll discuss these common revenue cycle management healthcare challenges and how to overcome them.
Here are some of the most common challenges of revenue cycle management in healthcare:
One of the biggest obstacles to good revenue cycle management is a timely collections rate. With ever-increasing deductibles, patients are expected to pay higher costs out of pocket, which might make it difficult for some patients to pay for services on time.
Medical billing challenges can also stem from a lack of patient education. The less patients know about their bills, the less likely the correct payments will be made on time. With confusion surrounding insurance coverage, it’s understandable that patients would need more clarification about how much they owe.
A complex challenge involved in healthcare is accurate medical coding. Coders must stay updated on ever-changing guidelines for specialty areas and how certain treatments should be reflected in medical billing, making revenue leakage a common issue when coders don’t follow the proper guidelines and changes.
Other coding errors can stem from upcoding, unbundling codes and unlisted ones without documentation, costing practices time and money. Denied claims can slow reimbursement by 16 days. Costs from these rejected claims can add up when a practice doesn’t invest in updated revenue cycle management software and automation tools.
Improving RCM means using analytics to understand the big-picture view of what’s happening in a healthcare organization. Many healthcare practices lack the insights and data to determine problem areas. Without insight, it’s more challenging to determine the best opportunities to improve your RCM.
It’s crucial to optimize your KPIs to build a stronger RCM engine. Disparate systems can be a major obstacle when you need to diagnose the issues slowing down claims, billing and payment processes. By leveraging technology, you can gain full visibility of your revenue cycle and measure data such as claim rejection rates, costs to collect and the percentage of cash collection from net revenue.
Talent shortages continue to impact the healthcare industry — both front-line workers and back-office personnel. Most teams don’t have the time, resources or staff to promptly process standard accounts, let alone delinquent ones. In fact, a 2023 CWH Advisors report found that 63% of providers were dealing with staffing shortages in their RCM departments.
Many offices also lack knowledgeable staff who are trained in regulation changes and technologies, including electronic health records and automated billing systems. Educated RCM workers are crucial to ensuring accurate billing and coding, which are important for appropriate reimbursement. A shortage can increase the workload on the staff, which can increase errors, impacting your revenue cycle management.
Payers are notorious for tight submission deadlines and zero tolerance for coding errors. However, missed deadlines and coding discrepancies are commonplace in many healthcare accounting departments. Coding errors can lead to higher claims denials, and missed deadlines can result in a disrupted cash flow.
With a limited timeframe, the pressure to meet these deadlines can result in increased errors, contributing to claims denials and additional administrative overhead to correct the errors. Manual processes are less efficient and cost-effective when meeting stringent submission deadlines. Organizations that continue using manual processes will face rising claims denials and a never-ending cycle of missed deadlines, impacting RCM significantly.
Overcome common revenue cycle management healthcare challenges with these tips:
Automate your workflow with AI-powered machine learning and automation tools, which can reduce your team’s reliance on manual processes and optimize productivity. Replacing these manual processes can reduce errors and delays. For example, practice management software can review claims for inaccurate coding and errors before they are submitted, easing demands on your staff, reducing claim denials and shortening the period between billing and payment.
Automated systems can also validate patient insurance eligibility and generate billing statements, reducing the chances of errors that lead to delayed payments or denials. You can even automate your payment posting. These tools can automatically match payments received from insurance companies before posting them to patient accounts, expediting the payment posting process to improve your cash flow management.
A crucial revenue cycle management solution is offering patient-centered payments. To help patients navigate the financial process better, you should provide:
The Millennia Patient Payment Solution is a unified patient payment platform that helps you streamline patient payments through online payment portals, digital payment options and more. The platform utilizes automated billing processes that increase patient engagement to collect more patient revenue.
With ever-changing regulations in the healthcare industry, it’s important to have a knowledgeable team to take care of billing and coding. Invest in staff training and development to ensure each team member has a robust understanding of RCM processes. Your staff should have the tools and resources to perform tasks effectively and efficiently. Fostering a culture of accountability can lead to continuous improvement and better revenue management.
You might also rely on specialists for billing and coding instead of in-office staff, as specialists spend most of their time familiarizing themselves with guidelines and changing requirements. Staying up to date on these changes can enhance your RCM, preventing claim denials, payment delays and backlogs.
Implement revenue cycle management software that integrates with your systems and can automate tasks while providing real-time analytics. Predictive analytics can help you identify revenue leakage, monitor KPIs and implement data-driven strategies for improvement. Leveraging the right data can help you tackle common obstacles in your revenue cycle.
You can also perform regular audits to identify trends, patterns and areas for improvement. Consistent assessments of your RCM strategies can help you adapt them and address evolving challenges in the healthcare industry.
While there are many obstacles in RCM, many can be managed with an effective strategy. At Millennia, we focus on patient engagement, offering our solution to all types of healthcare organizations to create a better patient experience that helps you collect more revenue.
Schedule a consultation to learn how we can help you manage your healthcare revenue.
