How hospitals can reduce compliance and revenue cycle management costs

Nov 11, 2019

A significant percent of hospital administrative costs come from billing and insurance-related activities. How can institutions address those expenses?

Looking ahead into 2020, it appears delivering health care will require more resources than last year. A report from PricewaterhouseCoopers found medical costs will increase 6.5 percent this year. Hospital inpatient and outpatient spending make up the bulk of these costs – 30 percent and 19 percent, respectively. 

Why is the cost of care rising? Administrative resources are stretched thin. PwC noted care utilization is rising among patients, but hospitals are struggling to find the human capital required to manage an increasing number of payments while complying with state regulations. How can administrators reduce hospital revenue cycle costs without violating compliance standards? 

"In 2012, business and insurance-related spending accounted for 15% of health care spending."

The costs of revenue cycle management and compliance 
Let's start with a fiscal overview. A study conducted by Aliya Jiwani, a researcher at the University of California San Francisco's Philip R. Lee Institute for Health Policy Studies, determined the percentage of billing and insurance-related (BIR) activities as a part of overall care costs in hospitals, physicians practices and insurance companies.

Jiwani and her colleagues discovered BIR expenses totaled approximately $471 billion in 2012. Overall, BIR accounted for 15 percent of health care spending. Recent research suggests this percentage may be even greater today. Given the complexity associated with hospital billing, it's not surprising BIR expenses are so high. What's happening in the background?

What's behind RCM costs? 
There are several reasons as to why revenue cycle management (RCM) consumes so many resources, especially with respect to billing auto carriers, worker's compensation firms and other payers specializing in accident claims. Motor vehicle accident (MVA) claims, for example, are regulated by every state's property and casualty laws, which determine who is responsible for providing payment in certain situations. These laws leave administrators with the task of:
  • Figuring out how to bill for a service.
  • Determining how long the accounts receivable should be on the books.
  • Authenticating the patient's place of residence and other demographic information that may affect the claims process. 
Further complications arise when a patient residing in a no-fault state, such as Florida, is injured while driving in a fault state such as Georgia and visits a hospital in Atlanta to receive treatment. According to the Insurance Information Institute, as per Florida law, the insurance company has to cover the patient's financial losses associated with the accident, but does that stipulation apply when the patient in question is injured in Georgia? This doesn't even touch on which party the Atlanta hospital should bill for services. 

The advantages of outsourcing RCM 
It's more financially viable for administrators to outsource their MVA revenue management responsibilities to businesses that possess the knowledge and resources required to process payments efficiently. When selecting an RCM partner, hospital administrators must ensure a prospect has the following capabilities:
  • A fully-staffed legal team that can address litigious issues. 
  • A rules engine that spots underpayments when they occur. 
  • Revenue cycle service staff specializing in MVA, worker's compensation and other niche insurance facets.
  • A database of all statewide laws regarding MVA. 
Overall, partnering with an RCM specialist enables administrative staff to focus on processes with which they're more familiar. In addition, hospitals can reduce the costs associated with managing MVA claims while ensuring they're complying with statewide regulations. If care costs continue to increase in the near future, it's likely outsourcing will become a more popular strategy among administrators. 
By doug 22 Jul, 2020
In 2016, healthcare vendors need the most efficient claims processing systems out there. By now, flexible, web-focused methods for important claims tasks are clearly the industry's path forward, and will play a major role in bridging the gap between patients and providers. A fast, digital claims method makes a direct link from implementation to delivery for workers' compensation and motor vehicle billing alike. Now is the time to invest in better revenue cycle management, with a focus on detail-driven, well-facilitated collection that breaks down barriers. Despite the growing pains involved with adopting any new technology, there are a couple of areas where smarter systems have already improved claims processing online. Direct accessibility With each new convenience, the future of healthcare looks more integrated. Data analytics harvests insights from seemingly unrelated details for fuller results. To make this innovation worthwhile, however, there needs to be a distinct pipeline between entities. "Data analytics harvests insight from seemingly unrelated details." Online healthcare portals are already addressing this need, providing direct communication through smart devices like phones and tablets. By bringing necessary information together in a simple, accessible source, these solutions set the stage for clean claims assembly. Shorter cycles Proper collection from the outset can reduce the amount of work hospitals have to do later if the claim is resubmitted, according to Gary Marlow, Vice President of Finance at Beverly Hospital and Addison Gilbert Hospital. "From a revenue cycle perspective, getting the most accurate information up front starts with patient scheduling and patient registration," Marlow told RevCycleIntelligence in 2015. "That provides the groundwork by which claims can be billed and collected in the most efficient and effective manner possible." The way information enters the claims process can impact how it gets managed. If technology, like artificial intelligence, is present at the beginning and guides the claims throughout, there's a consistent system handling the information the process to meet best practices. PROMEDICAL's benefits With our secure, efficient and comprehensive system, PROMEDICAL is staying ahead of the game. We're doing that by developing the following features: Communication: Users can choose from multiple languages with our online offerings. This allows you to customize your system to better reach patient populations and keep claims moving faster. Customization: If our proprietary options aren't currently meeting your needs, we can change them to do so based on feedback. Adapt to state fee schedules or language demands on a case by case basis. Encryption: A must for secure file exchange, PROMEDICAL ensures a secure file transfer process. Our process protects backup data equally strong as primary data, for efficient security across the board. Planning: Organizations also benefit when a set deadline is involved, putting clear limits on when submissions are set for review. Processing records requests within a preordained period of days helps managers know what to expect, and regular reports set up clear overviews of important statistics. Contact PROMEDICAL today to learn more about our healthcare revenue cycle solutions.
By doug 02 Mar, 2020
According to Pew Research, 15 percent of U.S. adults have used ridesharing services . Where does insurance enter the picture? Uber, Lyft and other ridesharing apps throw a proverbial wrench in hospitals' revenue cycle management operations. Billing is already a major pain point in hospitals – Black Book Research noted most facilities are outsourcing their RCM because in-house teams lack the resources to efficiently handle motor vehicle reimbursement. Ridesharing will only exacerbate the issue. For example, if a rider gets injured and has to go to the hospital, from which institution does the hospital receive reimbursement : The driver's insurance? The passenger's? Uber's? As Uber and Lyft are the most popular ridesharing apps, we'll focus on how these companies handle driver insurance. How do Lyft and Uber insure drivers? Lyft has three types of coverage within its insurance policies: Contingent Liability activates when a driver logs into the app and requests to accept rides – a state Lyft designates as "Driver mode." This coverage provides up to $100,000 per accident for bodily injury. Contingent Comprehensive and Collision kicks in when a driver has picked up a passenger. This coverage applies when a non-collision event damages the driver's vehicle. Uninsured/Underinsured Motorist applies when an at-fault driver who is uninsured or underinsured causes bodily injury to himself, his passengers or any third parties. The coverage provides $1 million per incident, and includes no deductible. For example, if a driver is injured in an accident at a time when he is not working for Lyft, his personal insurance will cover him (assuming he lives in a no-fault state, but that's another issue). However, when the driver activates Driver mode, Lyft's Contingent Liability will protect him even if he hasn't accepted a ride from a passenger. What if the driver's at fault? According to Rideshare Dashboard, Lyft's commercial insurance will cover all damages to third parties and the passenger, but the driver will have to cover his own medical expenses. That's when state laws dictate payment. In Massachusetts, for example, which also happens to be a no-fault state and requires all motor vehicle owners to possess auto insurance, the rider's personal auto insurance will cover the medical bills. Uber's insurance system is somewhat similar to Lyft's but possesses a few minor differences. For example, when an Uber driver is transporting a passenger, and another motorist causes an accident that results in bodily injury to the driver, the passenger and anyone else involved, Uber's UM/UMI will cover bodily injury of anyone in the rideshare vehicle.
By doug 28 Jan, 2020
With new, transformative technological advancements on the rise, it's no surprise that nearly every industry is feeling the impact of the digital age. From a healthcare provider's perspective, new resources can be used to revamp the current revenue cycle management processes you have in place. To reap the benefits of an optimized approach, you must be willing to take advantage of such emerging technological tools and resources, as stated by Chad Sandefur, Director and Healthcare Analyst at AArete. "Generally speaking, in order to strengthen the revenue cycle management, embracing technology within the revenue cycle is key," Sandefur shared with RevCycleIntelligence.com. "Having the platforms to seamlessly facilitate provider-payer interactions are really integral. In many cases, it's mostly about bad debt avoidance. With that in mind, there are a few specific points." Let's take a closer look at the benefits of utilizing technology, plus some of the emerging resources your facility can use to revamp your current RCM processes: The benefits of an optimized approach By paying attention to the new digital advancements that can benefit your RCM, you can ultimately impact the workflow of your staff members while better streamlining services for consumers. Here are some of the advantages of an optimized approach: Reduced chance for human error – Human error is inevitable when handling large amounts of data. Management software can be used to keep track of patient data input and maintenance. Better opportunity for precise, automated data entry – Between appointment scheduling, data input and claims submission, employees have a lot of duties. Automated software can take care of some of these responsibilities, allowing staff members to better focus on a single task at a time. I ncreased cash flow – Claims management technology can expedite claims quickly and produce clean, accurate claims, ultimately increasing cash flow , as stated by Becker's Hospital Review. Optimizing your RCM approach can lead directly to a significant return on investment and improve the overall reputation of your billing department.
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