The Revenue Cycle Management (RCM) of hospitals is vigorous and strives to progress every day. However, an array of hospitals bears the brunt of some common RCM problems. The pain points of RCM resurface in the hospital environment on a continuous basis and the challenges are characteristically similar everywhere – billing and coding errors, IT slow down, weak or lacking financial policies, bad debts, denials, charge capture issues, A/Rs, and/or inexperienced staff. It is imperative for the management to oversee the RCM and work towards improving this cycle.
Top 3 revenue cycle management challenges:
1. Billing, coding, and collections errors:
Most times, millions of dollars are left on the table which is mainly due to billing and coding errors as the billing processes are not in place. More so, collections from patients become increasingly difficult once they have left the healthcare facility (patients end up leaving the hospital without paying their out-of-pocket costs or leave with debts behind).
Many hospitals do not have a quality assurance process in place, which if implemented can check the claims entry on a regular basis. Managing and dealing with rejected and denied claims are a necessity and such errors need to be eliminated. Sometimes, due to rising costs, hospitals (especially rural ones) do not have the capital to invest in technology. As a result, they do not have systems such as EHR, which hamper the hospital billing and coding, hence lower revenues and bad debts.
Untrained staff is a problem area for many hospitals. An untrained staff member may not be able to gather the apt patient demographic information, and hence may not be able to create and collect an insurance claim, leading to low revenues. Also, data (customer information), if not verified leads to a loss in revenues.
Coders too need to be aware of the latest ICD-10 codes in order to avoid errors in billing. Billing efficiency is at a risk with inexperienced and unqualified staff. Some hospitals also lack staff trained in project management and clinical documentation, or they have disintegrated RCM teams leading to a lack of communication and unproductive operations.
Many hospitals do not have a financial policy for employees and patients. Employees must have knowledge in dealing with denied claims. Patients must get their information about collections, co-payments, unpaid balances, or other payable agreements from these financial policies. Hospitals are regularly dealing with uninsured patients leading to poorer revenues.
Hospitals are under tremendous pressure. With lowering reimbursements from insurance providers, sustaining a cash flow is absolutely vital. Hospitals need to scrutinize and optimize RCM processes. Apart from billing and coding management, areas such as ICD-10, system integration, standards of clinical documentation, and contract analysis, need to be made proficient.
For garnering higher revenues a plan that takes care of front-end management to billing and coding the claims, along with dashboard reporting, needs to be established.