Why is Revenue Cycle Management Important in Healthcare?
Revenue Cycle Management (RCM) is vital for a thriving healthcare organization. Balancing exceptional care with financial steadiness can be...
Healthcare organizations are feeling the sting of unpaid care, which surged by 33% from Q1 2023 to July 2023. And while it may not be possible to eliminate it, there are initiatives you can put in place today to lessen its impact.
Innovative revenue management technologies are emerging, offering enhanced analytics and intelligent automation to help identify and resolve revenue discrepancies.
Today, patients bear the brunt of healthcare costs, and as a result, expect a financial experience that aligns with what they encounter in other industries—seamless and transparent. However, healthcare often falls short. With the evolving dynamics of who pays, it's essential for healthcare organizations to prioritize clear pricing, flexible payment options and a better financial experience for the patient.
For a forward-thinking revenue management strategy, consider these four strategies:
1. Be up front with pricing and payment options
Patients want to know the cost of their healthcare upfront. Transparent pricing should be readily available and understandable. Introduce an online estimating tool to facilitate open financial discussions early on. There are solutions available to help simplify this process—and it’s worth the investment, considering 65% of patients are more willing to make at least a partial payment when given an estimate prior to service.
2. Establish funding mechanisms in advance of providing care
Establishing funding mechanisms in advance of care helps prevent bad debt and promotes a positive patient financial experience.
Determine the patient’s financial situation and ensure those who need assistance get it. Make sure those who pay can do so in the most flexible way, tailored to their unique financial position.
Put propensity-to-pay analytics to work. This helps segment patients into the most appropriate payment classes: who has the means to pay, who’s most likely to pay, and who qualifies for charity care and financial aid. This provides your team with the data needed to prioritize and more efficiently work accounts.
3. Discover insurance coverage opportunities
A patient’s eligibility for insurance coverage may change over time for many reasons, including data entry errors, plan changes and undisclosed coverage. Whenever possible, screen patients for insurance eligibility information before care is received, as this helps consolidate the claim cycle and drive yield.
Many hospitals discover self-pay patients with insurance coverage as late as 120 days after the patient’s discharge. Before making a bad debt placement, conduct a final commercial or public payer insurance coverage sweep to convert self-pay status to payer coverage.
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4. Simplify the payment process
The complexity of healthcare billing, where bills from physicians and facilities can arrive separately, can lead to confusion and delayed payments. To counter this, offer a straightforward payment system that enables patients to:
- Understand when and to whom bills have been sent
- Request itemized statements
- Make payments from various payment sources
- Communicate digitally with hospital billing staff
Plus, patients are looking for providers to offer a more convenient payment process. Studies show that 32% of patients who receive their bills via text message will pay them in less than five minutes.
Institutions that implement user-friendly online billing and communication platforms generally enjoy higher patient satisfaction scores, increased cash flow and reduced unpaid debts.
