Part 1: Leveraging Automation to Address RCM Challenges
This is part 1 of our 3-part series on how healthcare organizations can improve their revenue cycle management (RCM) processes by leveraging automation. This part reviews the inherent challenges of RCM and explains why automation is the ideal solution, part 2 explores the benefits of automated RCM, and part 3 offers some examples and use cases.
Time spent waiting for payment is time that money is not applied to accounts receivable or added to the organization’s profits. According to a 2020 CAQH report, the medical and dental industry could save 42% of annual admin spend by using workflow automation, releasing tremendous capacity for growth and new services.
79% of revenue cycle management (RCM) areas use outdated technologies in stand-alone applications that are not integrated into the numerous manual processes, resulting in 15% to 20% of claims being denied due to authorization issues or charge capture.
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Driving Efficiency within Revenue Cycle Management through Automation
Common Revenue Cycle Management Problems
RCM Is Time Intensive
Every step of revenue cycle management requires someone to spend time on it—and that time is valuable. Research from the JAMA Network looked at the administrative costs of billing and insurance-related (BIR) activities at one hospital and found that the time employees spent on these administrative tasks ranged from 13 minutes for a primary care visit to 100 minutes for an inpatient surgical procedure. The estimated costs for those same BIR activities were $20.49 and $124.26, respectively.
RCM Is Mistake Prone
Not only is RCM work time-consuming, but it’s also tedious and complex, which makes it prone to human error. Any number of small errors can create costly problems.
Consumers pay more than they should, which causes undue hardship and erodes loyalty. Additionally, billing mistakes make patients less likely to return or seek the follow-up care that they need.
For Healthcare Organizations
Errors cause claim denials, creating extra work that grinds payment cycles to a crawl.
RCM Work Is Costly
Then there’s the cost of rework. Denied claims requiring rework cost an estimated $25 per claim—and 65% of denials are never corrected and resubmitted. Erroneously high bills contribute to bad debt for patients—a problem exacerbated by the increase in high-deductible health plans and one that creates more work for healthcare organizations as they attempt to collect sizeable payments directly from overburdened patients.
The area with the most significant cost savings opportunity is eligibility and benefit verification automation, which saved the medical industry $85.6 billion in 2019.
Combined, all of these factors equate to a staggering financial burden for provider organizations and lost revenue for services already performed.
Overcome Revenue Cycle Management Challenges with Automation
Automation minimizes RCM mistakes introduced through human error and streamlines many of the time-consuming and costly aspects of human-powered RCM. Empowered by optimized processes and workflows, healthcare organizations can overcome many of their revenue cycle management challenges.
Implementing automation gives healthcare organizations flexible and scalable technology needed to increase efficiency significantly, achieving higher-quality outputs, decreasing cost, and elevating customer satisfaction.
Automation technology is used to complete RCM tasks such as:
- Preauthorization and eligibility checks
- Insurance verification
- Claims submission
- Patient billing and edits
- Account segmentation
- Data abstraction
- Email reminders
- Transcription into orders
- Procedure change reconciliation
- Chart analysis
Explore the Benefits of Automated RCM
Overcoming these RCM problems sounds desirable, but how does automation accomplish this exactly?
Read part 2 of our blog series to find out more. In the meantime . . .
Read the complete eBook on implementing automation for RCM.
Or, if you are interested in seeing how SDLC Partners would help you improve RCM, schedule a free one-hour session with a healthcare automation expert.