Experts: Hospital revenue cycle management needs to be flexible

We asked several experts in the field to highlight key issues affecting a hospital's revenue cycle management and offer some advice to providers on how to improve their operations.

Ahead of the Healthcare Finance Revenue Cycle Solutions Summit on Sunday, we asked several experts in the field to highlight key issues affecting a hospital’s revenue cycle management and offer some advice to providers on how to improve their operations.

Here’s what they had to say:

Q: What can healthcare providers do to improve revenue cycle processes in their organizations?

Providers should start by taking a step back and looking at the entire revenue cycle – from when a patient enters the system, to the mid-cycle where physicians are documenting services, all the way to billing and collections in the business office. Examining the full lifecycle of reimbursement can reveal significant “missed” revenue opportunities and “lost” revenue risk throughout the organization. The shifts towards value-based reimbursement and ICD-10 have put a lot of pressure on providers to optimize their mid-cycle in particular, as clinical documentation has an even greater impact on reimbursement. Chief financial officers and Chief medical officers will become increasingly interdependent and will need to work together to establish a workflow that will improve revenue and measurement of clinical quality.

- John Hansel, vice president of healthcare provider solutions, MedeAnalytics

Forward-thinking health systems have started digging themselves from the trough of EHR disillusionment, and are now realizing new plateaus of productivity through referral destination strategies. These strategies are designed to stand up where single-vendor strategies have fallen down, connecting health systems with their larger community of independent care providers and increasing their outpatient volumes and revenue. Many health system executives still believe their big HIT vendors will deliver on their roadmaps and promises of eventual community-wide care coordination. The reality, however, is that health systems are faced with static inpatient volumes, reimbursement rate contraction and new competitive forces from retail clinics, national chain market entry, competitive affiliations and emerging clinically integrated networks. Provider networks need to rapidly adopt growth strategies and new technologies designed to support closed loop referral management, care coordination and value-based care payment constructs across a geographically distributed and fragmented set of providers that currently use heterogeneous technologies.

[Also: High deductibles affecting revenue cycle]

Take, for example, large hospitals dependent upon high-margin transfer cases from feeder community hospitals for high acuity specialty and tertiary services and their inability to electronically process those transitions with ease. Despite the fact that they have high-cost EHR installments and have achieved scale via consolidation, very few health systems today gain the benefit of that scale by electronically load balancing their capacity and synchronizing it with demand. They lose revenue because demand is not directed against available appointment inventory. Yet this is what contemporary cloud technologies do, while integrating with their EHR environments.

- Joel French, CEO, SCI Solutions

Q: Name one major obstacle to efficient revenue cycle management for healthcare providers.

People who are incentivized to maintain revenue cycle status quo, i.e. billing and collecting through paper or electronic statements.

- Jeff Feeney, senior adviser, Phoenix Medical Management

A key obstacle for providers is realigning their revenue operations to focus on patient balances after insurance. With high-deductible plans on the rise, healthcare providers need to modify their traditional business model of insurance billing to a structure that is more patient and consumer centric. This means more patient education at the point of service and very different billing and collection strategies for patient receivables. Many providers have struggled to adapt their revenue cycle for patient collections, and the result can be millions of dollars in bad debt.

- John Hansel, vice president of healthcare provider solutions, MedeAnalytics

Healthcare providers need to be network-focused, not enterprise-focused. At the very time executives must focus on strategic questions such as assembly of a network sufficiently broad and deep to attract payers, managing provider utilization and tapping into new sources of patient referrals (all vital strategic issues for which the theater of competition is outside the health system in the greater community), too much management attention and capital is being consumed by the ongoing need to spend more on EHR technologies used inside the health system organizational walls. This does not mean the original decision to automate was wrong or not in keeping with sound business practice; however, migration from analog to digital processes should be viewed as a one-time operational phenomenon, not something core to competitive strategy. The enterprise-centric technology focus that health system executives have been so proud of and certain vendors have benefited so richly from is yesterday’s thinking – underscoring how far behind healthcare is from the rest of the U.S. economy.

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The provider networks that grow share and profitability in the next phase of the transition to value-based care will be those that can efficiently acquire and keep patients. To do so they will require the capability to direct patient referrals and clinically appropriate utilization to providers within their virtual network, comply with health plan authorization mandates, convert these referrals to convenient appointments and manage dozens of emerging payment schemes in parallel (bundling, shared savings, fee-for-service), all while delivering measurably better quality, efficiency and participant satisfaction. 

- Joel French, CEO, SCI Solutions

Twitter: @HenryPowderly