Health execs investing in AI to improve revenue cycles
Executives' highest priority for revenue cycle investment is technology, such as AI, automation and machine learning.
Photo: Westend61/Getty Images
Health system executives plan to invest in artificial intelligence, automation and managed services to improve revenue cycle performance over the next year, according to a new Guidehouse analysis.
The findings were published in its 2024 Revenue Cycle Management Report, which is based on a survey of 134 provider executives – the majority of them CFOs – conducted by the Healthcare Financial Management Association to understand revenue cycle pain points, solutions and investments.
WHAT'S THE IMPACT
Results show that nearly half of healthcare leaders reported a 93% or less net collection yield, representing a significant opportunity to improve performance. Payer challenges represent the greatest area of stress, with 41% of leaders experiencing denial rates above 3.1%. And more than half of leaders flagged prior authorization as the second highest area of stress.
Revenue cycle workforce shortages were cited as the third highest area of stress, with 90% of executives reporting that labor challenges further exacerbate operations. Leaders cited consulting and outsourcing as the top strategies for overcoming revenue cycle staffing challenges.
Nearly 80% of executives stated they use some form of revenue cycle outsourcing and the majority of them (71%) are satisfied with their partnerships. Further, leaders cited automation as the second most important strategy to address revenue cycle staffing challenges.
Executives reported their highest priority for revenue cycle investment in the next 12 months is technology, such as AI, automation and machine learning. Yet nearly 25% of respondents reported cybersecurity as a key pain point – particularly notable as a wave of ransomware attacks have infected the healthcare industry in recent months.
Patient access was cited as the second highest investment priority, followed by revenue and clinical integrity, with targeted investments in utilization management/review and denial management.
THE LARGER TREND
There's $9.8 billion in potential savings through AI-powered automation in the revenue cycle, according to statistics provided by TruBridge, a consultant and IT services provider, at the HFMA annual conference in Nashville in June 2023.. Nine percent of all claims are rejected in error or from prior authorization denials; 23.9% of denials are due to eligibility issues.
Seventy-five percent of hospitals are working on an AI strategy to tackle revenue cycle challenges, said Patrick Murphy, general manager of TruBridge and the former CFO of a health system in Alabama.
In March, the Congressional Budget Office addressed AI and machine learning in healthcare, determining that the evidence on the usefulness of the technology is mixed, particularly when it comes to costs.
The practical application of these technologies is still inconsistent at this nascent phase, CBO determined. It said it will need to see more empirical evidence before determining the overall effect on things like healthcare spending.
Jeff Lagasse is editor of Healthcare Finance News.
Email: jlagasse@himss.org
Healthcare Finance News is a HIMSS Media publication.
