Healthcare revenue cycle is a complex process with many touchpoints. Along these touchpoints lie countless opportunities for optimization that can significantly impact an organization’s reputation, profitability, and patient satisfaction.
A solid revenue cycle management strategy is crucial given a new survey by AccessOne revealed 43% of patients believe $250 is the maximum medical bill they could comfortably pay and 71% say rising costs of living will absolutely impact whether or not they spend on healthcare in 2023. Optimizing the revenue cycle process isn’t just good for patients, it’s good for the health system bottom line.
Revenue Cycle Management: A Brief Overview
In a nutshell, revenue cycle management (RCM) refers to the process of managing and optimizing the financial performance of a healthcare provider.
The goal of RCM is to ensure that healthcare providers are properly compensated in a timely manner for the services they provide to patients.
The RCM process begins when a patient schedules an appointment, and concludes when payment has been collected.
As every healthcare administrator can attest, the process is nuanced, and often tedious. Your staff needs to be sufficiently trained, patient payment and insurance details need to be collected, and patient financial responsibility needs to be accepted before you can actually capture the final payment.
Why Is Effective RCM Important?
In 2020, inefficient revenue cycle processes collectively cost healthcare practices $16.3 billion.
With effective RCM, you can easily cut a fair amount of losses. But not only that: it can help you provide a better service to your patients.
The rising costs of care and increasing complexity of healthcare administration is proving a challenge in making care affordable. Patients are already concerned about paying for their care as it is, and unclear RCM only adds confusion as to how they can pay.
A new survey of patients by AccessOne suggests that 3 out of 4 people are concerned that rising costs of living will significantly impact their ability to get the care they need. And even if they do get care, nearly half of people say they can’t afford a medical bill over $250.
That is staggering.
Ultimately, the benefits of effective revenue cycle management are more than you might think. It can help you:
Increase Collections and Revenue
Uncovering problems leading to denied or unpaid claims means healthcare facilities can work to ensure revenue is collected in a timely manner.
Improve Patient Experience
Instead of spending time and money on administrative tasks, providers can increase the quality of care and improve the patient experience, all the way from booking to payment.
Decrease Repetitive Administrative Tasks
Even isolating and optimizing the patient payment portion of the revenue cycle can drastically reduce call volume and hundreds of FTE hours for healthcare administration during a time when record shortages are already stretching healthcare staff capacity.
Effective RCM hinges on accurate data: this way, providers can expect a decrease in inaccurate submissions to insurance companies, which in turn means less risk of fraud (which can cost providers both their revenue and reputation).
So, how do you improve your healthcare revenue cycle management?
5 Revenue Cycle Management Best Practices
In a time when nearly half of RCM departments are facing labor shortages and are behind on revenue goals, improving efficiency is more important than ever.
Take your time to analyze the state of your institution’s RCM, and then take continuous action to make improvements.
While not an exhaustive list, here are five impactful revenue cycle management best practices you can consider.
1. Automate Prior Authorizations and Eligibility
While prior authorizations are intended to safeguard patients—as they ensure treatment is necessary and appropriate for each patient’s circumstances—they are a huge barrier to efficient revenue cycle management.
This process is the most costly transaction in healthcare, requiring manual input over 70% of the time and taking anywhere from 20-60 minutes.
Even more: requirements for prior authorizations have increased over the last five years.
Automating prior authorizations and eligibility is just one way to cut down on the administration burden healthcare providers carry. With the right technology, you can speed up the revenue cycle while staying on top of changing regulations and streamlining the patient experience.
2. Take a Patient-Centric Approach
To foster meaningful patient relationships, start by putting the patients at the center of your RCM.
Too often, patients feel blindsided by their medical bills. Instead, take a proactive approach by being transparent from start to finish.
In one of our surveys, only 21% of respondents said their healthcare providers have spoken to them about available patient financing options in the past two years.
Paying attention to personal preferences or, better yet, letting patients take the lead in managing their own financial experience with self-service options, can go a long way in shortening the time between appointment and payment.
3. Focus On Patient Financial Literacy
Patients want options, and they want to understand what their financial obligations are before the bill comes.
In fact, 58% of respondents report wanting clear communication from providers about what their financial obligations will be.
As patients become more financially responsible for their healthcare, practices need to adapt to provide transparent communication regarding the medical billing cycle and demonstrate care by considering offering flexible payment plans and clearly communicating those options to patients.
4. Invest in Modern Payments Technology
Consumers do not like making healthcare payments. In fact, 70% of consumers say healthcare payments are the most difficult when compared to other industries.
Why? It’s hard to pay medical bills. It’s confusing, tedious, and most likely involves archaic paper processes.
Consumers today are used to peer-to-peer financial apps and other mobile-first payment approaches, but the healthcare industry has not evolved like retail and ecommerce. Simplifying patient payments by stripping away the stumbling blocks is one way to improve healthcare revenue cycle management.
Options like AccessOne MobilePay don’t even require a password, login, or a clumsy app to download. Removing barriers like these can result in a 20-30% boost in overall patient revenue collected.
5. Utilize Analytics to Track RCM KPIs
How successful is your revenue cycle management?
For a strategic view of how your organization is operating, tracking RCM KPIs can help identify areas where you fall short of industry standards. You could track:
- Clean claim rate.
- Net days in A/R.
- Cash collection as a percentage of net patient services revenue.
- Claim denial rate.
- Cost to collect.
Establishing benchmarks for KPIs means administrators can identify problem areas early, and consequently can better allocate resources for greater productivity.
Maximize Collections With AccessOne
Revenue cycle management is an essential part of your healthcare practice’s financial success.
Focused efforts to make your revenue cycle more efficient can result in increased revenue and a better patient experience.
And if you want to see your accounts receivable measured in days instead of weeks or months, take a look at the payment options you provide.
AccessOne Pay can help give your patients the payment experience they’re looking for. Schedule a demo today, and see for yourself.