5 Common Hospital RCM Pain Points – and How to Address Them

In the hospital setting, revenue cycle management is an integral – but complicated – component of ensuring an organization runs efficiently and effectively.  

RCMs present many challenges to hospitals.
July 12, 2017

It's no secret that revenue cycle management is an integral – but complicated – component of ensuring an organization runs efficiently and effectively. But knowledge alone doesn't solve the RCM headaches healthcare decision-makers face every day. 

The following are five pain points frequently experienced in hospital revenue cycle management – and solutions for addressing them before they take a toll on your organization's bottom line.  

1. Errors in Billing and Collection

Though any hospital RCM department likely recognizes that preventing errors is a major challenge in billing and collection, they may underestimate the frequency of these mistakes. According to Becker's Hospital Review, professionals estimate that errors occur in as much as 80 percent of medical bills. And the Medical Billing Advocates of America reported that the number is on the rise. 

"We are seeing a lot of the error types escalating, especially in the hospital area. We have such a complex billing system, that it leaves so much room for errors to occur on medical bills, and that is what we are seeing," Medical Billing Advocates of America founder and CEO Pat Palmer told the radio station New Jersey 101.5 FM.  

When processes are rushed in an effort to ensure that the proper forms are submitted at the right time, revenue cycle performance can obviously take a hit. But it's not just about the bottom line. Errors in billing and collection can negatively impact the patient experience, hurting the hospital's reputation in an increasingly consumer-driven market where patients can choose to pursue care from a competitor. 

2. Challenges Created by HIT

From robots that assist with surgeries to electronic health records that store patient information, tech is involved of a patient's episode of care – including financial arrangements. However, sometimes these advances also bring their fair share of challenges, particularly in terms of billing. Many organizations lack the HIT infrastructure to properly monitor and complete the RCM process effectively and efficiently, especially considering the diverse demands of ICD-10, interoperability requirements and other technical components of health IT present in hospital billing. 

Furthermore, some hospitals don't have the staff they need to address the implantation and use of these HIT RCM processes. For example, according to the U.S. Bureau of Labor Statistics, demand for medical records and health information technicians is expected to rise by 15 percent between 2014 and 2024. Over the last decade, hospitals have struggled to fill positions to meet this growing demand. 

RCM processes can require significant time from multiple healthcare staff.The RCM process takes involvement from a variety of key players in a healthcare system, which can create significant challenges.

3. Lack of Training and Resources

Even if an organization has the staff necessary to successfully navigate the RCM process, a great deal of training is required to ensure compliancy. However, given the high volume demands of the billing process, finding the time for proper training can be a challenge – not to mention expensive. Many hospitals consequently struggle to ensure that their RCM department receives the instruction, support and resources it needs to function efficiently and accurately. 

4. Failure to Supervise Entire Claims Process

Hospital revenue cycle management isn't a short process, and failure to monitor the operation from beginning to end can result in costly errors. Mistakes can be made as early as when patient information is recorded during scheduling and registration, or later on when services are translated into ICD-10 codes and claims are sent to payers. When the whole process isn't monitored properly, it can be difficult – and time consuming – to determine where the problem occurred when a claim is denied. 

5. Variety of Claims in RCM

There's no one-size-fits-all in medical billing. Patients have different types of procedures and insurance, and each of these situations has numerous requirements of their own. If an RCM department needs to address every type of claim, staff members may be forced to spend extra time working on those that are more complicated or otherwise out of the ordinary. 

For instance, one of the more challenging components of the RCM process is auto insurance claims. These claims often occur with out-of-state residents, who may seek treatment in a different state than the one in which they're insured. Because different states have different requirements, the claims process can be complicated and confusing for hospital staff. Consequently, automotive claims – as well as workers' compensation billing – provide particular challenges that a hospital's RCM department may not be equipped to address. 

While these pain points pose a significant challenge to hospitals, there is a revenue cycle management solution that can help all five: outsourcing components of the process. Whether you choose to find a vendor who can assist with a certain type of claim or the majority of the operation, seeking outside assistance can help your RCM department run more efficiently and avoid costly errors.