The Future of Healthcare Revenue Cycle Management (RCM)

You may believe that the healthcare industry was making a bank over the last two years because of the pandemic. But in reality, many healthcare professionals and facilities were struggling for their survival.  

The Covid-19 pandemic has severely overwhelmed hospitals, and the increased hospitalization threatened to hamper the healthcare services industry. The unfavorable situation has led many healthcare organizations to lay off staff or cut salaries. They are now seeking payments from patients that are financially and mentally exhausted.  

Unsurprisingly, Covid-19 has served as an accelerant in driving significant trends in healthcare revenue cycle management (RCM). Today, we see a mix of regulatory changes, self-paying patients, reliance on automation, and a cultural shift that keeps employees in their homes. 

Increased Self-Paying Patients 

According to a publication
by Becker's Hospital Review, in 2020 alone, 31% of covered workers in the US are enrolled in High Deductible Health Plans (HDHPs). The health plan has high deductibles with low monthly premiums. Therefore, patients are either self-paying or partially through HDHP plans, increasing strains on collections. 

Many businesses canceled medical insurance for their employees. Over three million people lost their jobs, as per Urban Institute analysis, forcing patients to cover their care costs by themselves. 

To overcome the challenge and achieve higher patient payment rates, clinicians should work with overextended patients because they now constitute a larger slice of the payment pie.

 

Limitation to Automation  

The healthcare providers were compelled to automate complex workflows to reduce costs and drive efficiency with the increased challenges of Covid-19. According to an AKASA survey, 78% of healthcare facilities and clinicians automated their revenue cycle management (RCM).   

Many providers use revenue cycle management to keep their focus on patient care. But few processes remain manual, such as claims management and follow-up communication. The main challenge surrounding these processes was the requirement of collaboration between multi-party systems continuously undergoing configurational changes by their internal teams.  

Furthermore, patients often find tech-enabled support for healthcare frustrating. Fee schedules are hard to automate since they are negotiated based on a case-basis between providers and insurers. Following are some of the issues associated with fully automating revenue cycle management solutions:  

1. Fragmentation of the healthcare system. That is, lack of coordination, systematic misalignment of incentives and inefficient allocation of resources.  
2. Continuous diversification of revenue cycle management solutions.  
3. Value-based care is replacing the fee-for-service model.  

Therefore, human intervention is a key to overcoming these challenges and ensuring timely reimbursements for providers. 

Evolving Rules Associated with Billing 

The No Surprise Act came into effect on January 1, 2022. It protects patients from surprise medical bills, generated from out-of-network (OON) emergency care. Additionally, it requires providers and payers to negotiate payments in final-offer arbitration. The Act will impact healthcare RCM because clinicians will now have to identify OON claims and assign codes in their digital record early on. 

Similarly, the price transparency rule forces providers to provide pricing details online, in both retail-style and machine-readable formats. A fine of up to $2 million can be imposed on non-compliant facilities. 

Bottom Line 

On one hand, where rules and regulations are becoming strict, the overall consumer behavior has also experienced a shift because of the pandemic. According to a survey, 25 million people are more likely to switch providers than in the pre-Covid period.   

The future of healthcare revenue cycle management (RCM) is in flux, given the challenges. However, the healthcare IT industry can explore the opportunities around them to come up with more aligned updates for billing software to empower clinicians as they rely and continuously use revenue cycle management for timely claim reimbursements.