From every crisis comes insight that can help improve systems and processes in the future. This is especially true of the COVID-19 pandemic. Health systems and physician organizations have faced unparalleled challenges these past few months. They’ve had to take drastic steps to keep the doors open and to maintain continuity of care for their patients. Even with staff reductions and reduced volumes, providers have persevered.
The good news is that there are opportunities to ease the financial burden on health systems and physician organizations today and down the road, once the pandemic has waned. One of the most impactful is outsourcing all or strategic parts of the revenue cycle. Doing so allows providers to spend less effort chasing revenue and more time caring for patients during this critical period. Following are three benefits of outsourcing to revenue cycle experts.
Improves the patient registration process
The patient access process is essential for success. The patient access process is an opportunity to begin creating a positive patient experience, which can improve your revenue integrity, impact patient satisfaction scores, reduce the likelihood of negative online reviews, and help enhance the hospital’s brand in the communities they serve. The right outsourced partner will have a team of expert registrars with the soft skills necessary to ensure positive patient engagement right throughout the patient financial journey.
Utilizing an outsourced partner to manage patient registration can help reduce issues downstream in the revenue cycle. For example, many of the top reasons that claims are denied are caused by patient registration issues. These include missing information, inaccurate demographic information, and incorrect or outdated insurance information. Knowing that a patient isn’t covered for a service up front enables the provider to ask for payment or to set up a reasonable payment plan. Otherwise, the claim could end up in collections, which increases the cost to collect, inhibits cashflow and increases bad debt. An effective outsourced partner will have patient access technology or staff trained to use the hospital’s technology, ensuring the capture of accurate and complete information. With a focus on the pre-service experience, health systems and physician organizations can avoid a significant number of denials and write-offs.
Close to 24% of denied claims result from issues with registration or eligibility verification.[1]
Makes denials management more effective
Many health systems and physician organizations assume that a certain portion of denials are inevitable. This may be why so many are never reworked.[2] Yet, in these challenging times when margins are already spread thin, providers need every dollar they’re owed. In fact, those small-dollar claims that are so often written off can add up to be a significant amount of revenue over time.
Outsourced partners can help providers collect on every denied claim. They have the technology necessary to remove redundant or time-consuming processes like contacting payers or searching payer websites to find claim status information. Research shows that contacting a payer to check the status of a single claim takes 14 minutes and costs more than seven dollars.[3] There were 173 million such status inquiries in 2018. Choosing to delegate this process to an outsourced partner means the revenue cycle team can be reassigned to more strategic or patient-centric efforts.
The best outsourced partners will also work with the revenue cycle leadership team to identify operational or workflow issues that lead to denials in the first place. They can break out denials based on multiple factors, including collectability, preventability and over-turn rate. From this information, providers can gain insight into systemic issues that could be easily resolved. For example, additional training for team members that work with specific payers with complex requirements may be needed, or the revenue cycle team needs to review payer contracts to identify noncompliance.
According to the American Medical Association, 25% to 35% of our nation’s total healthcare expenditures are from direct transaction costs and inefficiencies in claims management revenue cycle. [4]
Enhance patient account resolution
Times are also tough for patients right now. So many have lost jobs or been furloughed due to the pandemic, which means they’ve also lost their employer-sponsored health insurance. Collecting from self-pay patients has always been challenging, but with the virus continuing to surge, patient account resolution may become even more difficult. This is a significant opportunity since more than a third of all hospital revenue now comes directly from patients.[5]
Outsourced partners are well positioned to manage patient accounts at higher collection rates. They understand that each financial encounter can impact the patient-provider relationship, which is why they treat each patient with dignity and respect. The best outsourced partners also have the technology and human resources needed to provide customer service at a high level, reflecting the providers commitment to servicing their community. Transparent communication is key. Once patients understand what they owe, outsourced partners are then able to match the best payment options for each patient’s unique financial situation. For patients who qualify for financial assistance, the outsourced team can help them successfully navigate and complete the process.
A key benefit realized with an outsourced partner managing patient collections is their ability to help patients realize they can afford the care they need. When patients put off care due to cost, their illnesses or chronic conditions can worsen and lead to increased costs and poorer outcomes—all of which can impact patient satisfaction and reimbursement.
$7.5B in patient payments go uncollected each year.[6]
Now is the time
The COVID-19 pandemic is surging again as the nation enters the winter season. As our nation struggles to deal with the economic challenges the virus brings, health systems and physician organizations will continue to face revenue challenges. Having the right outsourced partner in place now can help protect the bottom line in both the short and long-term. Now is the time to make the strategic move to revenue cycle outsourcing to free up leaders to plan more about Quality Patient Care and spend less time chasing revenue.
[1] http://cthima.org/wp-content/uploads/2018/12/CTHIMA-Payer-Denial-Trends-Rocky-Hill-Dist-12.13.2018.pdf
[2] https://www.mgma.com/resources/revenue-cycle/you-might-be-losing-thousands-of-dollars-per-month
[3] https://www.fiercehealthcare.com/payer/waystar-90-claim-denials-are-avoidable-help-technology
[4] https://www.beckershospitalreview.com/pdfs/April_30th_Saturday/1115_F_Dahmen_Denials%20Management%20Reducing%20and%20Eliminating%20Claim%20Denials%20Utilizing%20Best%20Practices.pdf
[5] https://www.forbes.com/sites/allbusiness/2017/06/28/what-we-can-all-do-about-rising-healthcare-costs/#11413a32f375
[6] https://www.pymnts.com/wp-content/uploads/2019/02/Healthcare-Payment-Plans-January-2019.pdf