Top 5 Mistakes in Claims Management – And How to Avoid Them
Claims management accuracy and efficiency are crucial for hospital billing, accounting and finance professionals. However, common missteps can cause...
From top analysts to hospital board rooms, healthcare leaders have emphasized a consistent theme for 2023: an end-to-end approach to revenue cycle management (RCM). End-to-end capabilities featured prominently in the Everest Group’s recent Revenue Cycle Management Platforms PEAK Matrix® Report 2023, and it seems like every customer that we speak to is interested in reducing complexity, streamlining systems, and leveraging technology to improve processes and performance.
But what does end-to-end revenue cycle management look like in practice? It does not, as some people assume, mean that you can suddenly consolidate 40 vendors down to one. Instead, it’s taking the first step towards an integrated approach that uses automation and emerging technologies to deliver measurable business results.
Why end-to-end revenue cycle management is critical to business outcomes
Digital transformation is a journey, not a destination, and end-to-end RCM is no different. Providers are investing in technology to improve their revenue management so that they can boost efficiency, increase revenue, and improve the patient experience – in other words, get more value from their revenue cycle management tools. While vendor consolidation and end-to-end management of the revenue cycle are a vision for the future, healthcare leaders are looking at how they can innovate and improve their business now.
The latest technology and platforms offer deeper integrations with the EHR and PAS systems; interoperability across the front, mid, and back cycle; AI and automation to relieve staff; and expanded reporting and insights. A 2022 research study from AlphaSights confirms that the revenue cycle is an area where technology can bring results quickly while not adding more pressure. If done right, modernizing revenue management should bring relief to providers who face ongoing problems in staffing, increasing revenue, and managing their payer relationships.
In fact, McKinsey believes that the healthcare industry has a technical potential for automation of about 36%. That means that over a third of current processes could be shifted from employees to technology, opening up those staff members to focus on higher-value work and relieving the burden of understaffing.
Getting started with end-to-end RCM: Evaluate, prioritize, and execute
Providers must evaluate where revenue performance needs improvement and where they can achieve quick wins. Consider what specific processes are critical to collecting more revenue and how you can bake automation, digitization, and intelligence into pre-service, point of service, and post-service workflows. The goal is not a sudden shift to a single platform, but a strategic rollout of processes, products, and services that support the areas where change is needed most.
Breaking the end-to-end approach down into discrete steps is more flexible and accommodating to your specific business and operational needs. Focus on one area of improvement first, until revenue improves. Then, carry on to priority number two and so on, across the revenue management cycle.
We have found that our customers typically focus on one of the following categories first:
- Patient access
- Claims management
- Contract management
- Revenue assurance
Patient access: Full patient engagement process on a single platform
Optimizing patient access enables providers to reduce FTE needs and spending related to registration and problems caused during pre-service. It’s also a great way to improve the patient experience and drive loyalty and satisfaction.
Business challenges resulting from outdated or inefficient patient access processes run the gamut. Inaccurate patient registration data and insurance verification issues lead to major revenue challenges downstream; a staggering 50% of claim denials could be prevented at registration and 50% of denials are due to incorrect billing information, non-covered charges, and lack of authorization. Those denials cost hospitals $262 billion every year.
It doesn’t stop there. Patient access teams struggle with providing accurate patient estimates, staying compliant with price transparency legislation, order management inefficiencies, charity care eligibility and more. Traditional paper-based processes, and/or a mishmash of disjointed systems and software, translate to significant – and avoidable – revenue management problems.
The good news: modern patient access solutions make it easy to improve on these challenges. By leveraging our integrated Insurance Verifier and Accountability Manager modules, Bothwell Regional Health Center decreased eligibility-related denials to almost zero and increased upfront collections from $200 to over $10,000 per month. Similarly, a southern California hospital used Payment Estimator, Insurance Verifier, and Contract Manager to increase monthly point of service collections by 4,500% in 13 months, leading to an 8x ROI in one year.
Both examples demonstrate that tackling even one component of end-to-end revenue management can make a big impact.
Claims management: An automated claims clearinghouse and workflow productivity
By focusing on claims management, providers can unite all the functional components to manage every step in the claims process, from billing to payment reconciliation.
Standard claims management practices often result in delayed reimbursement, revenue leakage, and improper billing, which lead to increased cost-to-collect and higher risks for compliance and repayments. They can also increase A/R days, delay cash, reduce biller productivity, and result in low clean claim and acceptance rates.
Providers that choose to focus on clean claims can customize their solution through the functionality that they need the most. FinThrive customers rely on solutions like:
- Collections Manager, to automate customizable business rules and effectively manage and resolve open receivables.
- Knowledge Source, to discover data-driven insights for creating better coding and billing edits.
- Analyze, to get end-to-end visibility across the revenue cycle.
- Revenue Capture, to identify missing revenue and compliance issues before billing.
Using these capabilities, the University of Washington Medical Center reduced their denial rates by more than 50%, improved clean claim rates from 84% to 92%, and lowered the average days from claim to export by 33%.
Contract management: Accurately forecasting and capturing revenue
Contract management provides ample opportunity to use technology to streamline and improve processes. With a web-based revenue management platform, you can accurately forecast, calculate, and capture all net revenue contractually owed and model various scenarios and resulting revenue impact to support contract negotiations. This includes being able to:
- Determine if payments or net revenue are accurate
- Calculate accurate patient liability estimates
- Accurately net down A/R
- Find revenue from unidentified underpayments
- Manage complex service types and fee schedules
- Keep pace with payers in contract negotiations
- Monitor payer performance
- Avoid the risk of surprise recounts
A midwestern health network used FinThrive contract management tools to identify $40 million in underpayments over seven years – more than 95% of which they recovered. They increased upfront cash collections by $6.1 million and began collecting up to 50% of payments at point of service.
Revenue assurance: Trusted insurance discovery, eligibility, reporting, and staffing resources
Revenue management processes that rely on lightweight or outdated vendor services for insurance discovery may be leaving significant, billable coverage on the table – coverage that can translate to millions of dollars in lost earned revenue.
Some providers should be particularly tuned in to the challenges and opportunities of revenue assurance. If you have high unscheduled, emergency volumes that limit pre-service eligibility determination; see a large number of Medicaid patients; and/or have high levels of uncompensated care and self-pay patient accounts, this could be a good area of focus.
If insurance discovery is a pain point, look for solutions that:
- Continuously look for coverage on all accounts, not just self-pay
- Find additional payment opportunities from complex cases, including Medicaid secondary and potential coordination of benefits opportunities
- Identify commercial policy ID numbers for patients believed to be uninsured
- Monitor Medicare and Medicaid for retroactive SSI certification
With capabilities like these, Mercy used FinThrive Insurance Discover to increase average reimbursement from $1.72M to $1.77M per month in just six months.
No matter which path you take first, make sure you have a strong partner. FinThrive was the only Leader in the Everest Group’s Revenue Cycle Management Platforms PEAK Matrix® Report 2023 that truly provides an end-to-end RCM platform. We’re not just a service provider – we deliver both the technology and the expertise to guide providers along their best path to a holistic approach. Read the report to learn more about how FinThrive combines point solutions across the traditional RCM workflow at the front-end, mid-cycle, and back-end in an integrated, pre-built platform.
