Healthcare revenue cycle management grows increasingly difficult as the industry shifts to alternative payment models and patients take on more financial responsibility. To maintain financial health during this transition, it’s vital for hospitals and health systems to seek improvements in RCM.
Here are five tips for improving revenue cycle management, gathered from experts in the field.
1. Understand RCM integration. Market forces like provider consolidation, patient consumerism and compliance risk are driving the consolidation of revenue cycle staff and processes, but not every function of the revenue cycle should be integrated, according to Jim Lazarus, managing director of strategy and innovation in the Revenue Cycle Solutions Division at The Advisory Board. A good place to start with integration is combining separate customer service departments into one department for the whole system. Staff benefits from a single leadership structure and patients benefit from coordinated services such as one number to call for their billing and scheduling needs and consolidated billing statements.
2. Ask for a trial period. When deciding whether to outsource revenue cycle processes, there are two important factors to examine, according to Kanner Tillman, CFO of Sherman Oaks (Calif.) Hospital & Encino Hospital Medical Center. First, turnaround time in dealing with payers must be as good or better than the status quo. Vendors’ references and current users can offer some insight on this factor, according to Mr. Tillman. The second factor is the availability of web-based data inquiry/analysis and reporting capabilities. “A robust RCM program should include more than canned reports and limited or no ad hoc report writing capabilities,” says Mr. Tillman. He says it’s always wise to ask for a trial period to test these capabilities.
3. Set clear expectations for vendors. When negotiating a contract with a vendor, it’s important for healthcare organizations to craft a contract that outlines the level of service expected, setting clear expectations in terms of productivity, skills, quality and customer service, according to Jim Rielly, principal healthcare IT consultant at Hayes Management Consulting.
4. Use the right tools for contract negotiations with payers. Evaluating the financial impact of new contracts is a complex exercise given the multiple variables that come into play. Many hospitals struggle to be on equal ground with payers during contract negotiations due to a lack of easily accessible data or the inability to quickly calculate the implications of different contract terms, according to Mr. Lazarus. Hospitals need advanced analytics and reliable data to model different contract variables and negotiate fair reimbursement with payers.
5. Analyze KPIs. Hospitals and health systems should regularly analyze key performance indicators against industry benchmarks to help determine if there are problems within the revenue cycle, according to Michael Orseno, vice president of revenue cycle management at Regent Surgical Health in Westchester, Ill. KPIs that are commonly analyzed include accounts receivable days and net revenue. If accounts receivable days are increasing while net revenue is decreasing, an organization’s financial health may be at risk, according to Mr. Orseno.
This article originally appeared here.