Provides an overview of the current revenue cycle management and its processes and offers a point-of-view on today’s RCM trends and areas of transformation.
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Five Key Imperatives of Today's RCM
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CitiusTech Thought
Leadership
23rd April, 2018 | Author: Ramganesh Subramanian| Sr. Healthcare Consultant
Five Key Imperatives of Today’s RCM
CitiusTech Thought
Leadership
2. 2
Objective
Provide a quick overview of the current Revenue Cycle Management and
its processes
Offer a point-of-view on today’s RCM trends and areas of transformation
Highlight how providers, payers and technology organizations can align
their technology initiatives to achieve five key imperatives which form the
essence of successful RCM
3. 3
Agenda
What is RCM?
RCM Process Flows
Key Transformations in RCM
5 Key Imperatives
Integrating Various Healthcare Applications
Transformative Partnerships for RCM
Few Illustrative Use Cases using IoT, EDW & Analytics
Key Takeaways
4. 4
What is RCM?
Revenue Cycle Management (RCM) refers to the steps to receive payment for the services
rendered by healthcare organizations like hospitals, practices, SNFs, ACOs, HMOs, etc.
RCM historically was viewed as a back-office function. However, RCM today touches every aspect
of the clinical practice, from appointment scheduling to collections.
A holistic RCM comprises of 3 important functions.
Generate Revenue Capture Revenue Collect Revenue
Proactive approach to
scheduling and capturing of
all necessary patient
information and copays – up
front
When this function of
revenue cycle is optimized,
practices can increase their
revenue by minimizing the
number of no-shows
Once a patient is called from the
waiting room, the clinical encounter
begins
The clinical encounter ends when a
patient leaves the appointment
The activities that occur during this
timeframe determine a practice’s
ability to capture revenue. These
activities must be accurately and
thoroughly recorded
Accurate and complete
documentation of services rendered
and proper coding is required to
ensure effective payments
In general terms, back
office billing functions
enable a practice to collect
revenue and complete the
RCM cycle
Included in this category
are the steps associated
with billing, posting and
collection of payments
These are the last steps in
the RCM process
5. 5
RCM Process Flow
The revenue cycle process starts when the patient calls the physician’s office for an appointment and
the cycle ends when the balance on the patient’s account is zero.
Key IT Systems
Practice management systems
Claims management
Health information management
systems
Contract management
Automated call distribution (ACD)
reporting system
Automated billing & collection system
Stakeholders
Front desk office
Financial counselor
Physicians / Medical staff
Medical coder
Clearing house
Billing team
Cashiering team
Payer
RCM
Processes
Appointment
Scheduling
Patient &
Eligibility
Verification
Medical
Coding
Authorization &
Precertification
Pricing
Estimation
Payment
Assessment
Payment
Processing
AR and
Denials
Management
Payment
Follow-up
Bad Debt,
Medicaid &
Charity
Assessment
Collections
& Appeals
6. 6
Key Transformations in RCM (1/3)
Challenges that drives RCM:
Changes in laws & regulations – Obamacare, ICD10 etc.
Adoption of cost-containment strategies
Ensuring high quality of healthcare services
Contributors to shrinking revenues:
Transition from fee-for-service to value-based payments
Lower hospital admission rates
PQRS penalties
Escalating healthcare costs
7. 7
Key Transformations in RCM (2/3)
Current demands for RCM
Efficiently running financial operations to ensure better clinical and operational efficiency
A well-managed revenue cycle to minimize the time spent on administrative duties
Ensure maximum revenue and unobstructed cash flow
Lesser time spent on operational issues and time to focus on core functions, i.e., provision of
healthcare services
Three key elements of a successful transformation includes:
Optimizing the RCM technology environment
Improving the performance by adopting advanced analytics techniques
Enhancing the patient experience
Organizations that successfully transform along these three core transformation areas will be well on
their way to achieving a leading RCM environment.
8. 8
Key Transformations in RCM (3/3)
Key Market Forces:
Regulatory changes
Increasing patient
demands
Increasing patient
financial costs
Standardization in
care
Reimbursement cuts
Volume based to
value-based care
Key RCM Imperatives
Time&Resources
Degree of transformation
Size of the bubble in the Y axis indicates the time and resource required for the transformation
Size of the bubble in the X axis indicates the degree of transformation required
1
2
3
Enhancing patient experience
Payer – Provider Collaborative RCM
Integrating various healthcare
applications like EHRs, Labs,
Pharma, Payer Systems, etc.
Process Automation
Adoption to new payment
models
Operationalizing analytics
9. 9
Enhance patient
experience
Improve outcomes
Boost provider’s
financial performance
Bring down revenue
cycle cost
Modernize
technology environment
1
2
3
4
5
Customer centricity
Patient feedback
Care management
Quality improvement
Value based care
Pop Health Mgmt.
Payment reforms
Maximize incentives
Advanced models
Denials and claims leaks
A/R arbitrage, bad debts
Cost containment
Robust technology
Scalable architecture
Streaming analytics
Key focus areas
Consumer
engagement
Performance
improvement
Operationalizing
analytics
Revenue and cost
analytics
Application portfolio
optimization
Needofthehour
Revenue Cycle Management: 5 Key Imperatives
10. 10
Improving Patient Experience
Seamless patient access
Providers that integrate scheduling and
registration through a call center or
patient portal will set up one seamless
patient-friendly process
Patient financing program
Patient financing is a necessary payment
option that will make a patient’s burden
more manageable as well as decrease
bad debt for providers
Financial assistance and counsel
In many situations, providers need to provide
financial counseling services to explain:
• The increasingly complex nature of
healthcare reimbursements
• Benefit plans
• Financial responsibility to patients
Transparent pricing for single / combined
services and patient-estimates
Stronger connectivity with payers to establish
effective and transparent bill estimation
Combined or integrated estimates provided to
patients prior to care to increase transparency
and improve estimate accuracy
Health plans and provider services that are being developed and envisioned for transforming the
healthcare consumerism is reaping better benefits than the traditional behavior focused services.
1
Traditional consumer behavior has a low impact on cost management potential whereas the
new personalized healthcare has a great potential for effective cost management. Key
benefits include:
11. 11
Performance Improvement 2
In order to improve the quality and performance of the revenue cycle management there is
a need to implement initiatives that maintain the steady revenue stream for the hospitals.
Following are the few important performance improvement solutions:
Benchmarking Healthcare Data
Benchmarking in RCM can be
done using:
HFMA (Healthcare
Financial Management
Association)
MAP (Measure, Apply,
Perform) initiative, or with
AHIMA benchmarks for
revenue cycle
management excellence
EDW for trending
healthcare data
Consolidated data analysis
Monitoring Payer Contracts
With new regulations and
tighter, margins, monitoring
payer contracts and
communicating clearly and
frequently with payers is
imperative
It is important to ensure
reimbursement and denials
are optimized
Use of analytics helps in
monitoring the payer
contracts and improving
performance by ensuring
that the providers are not
under-reimbursed
Value-Based Reimbursements /
Payments
Improving the reach of care
to higher number of patients
Aging population with
multiple chronic conditions
Highly engaged patient
population that is responsible
for its own care
Patients in turn want more
insight into their
care and value for their dollar
Increasing market share when
patients have more choice in
where they want to be
treated
12. 12
Operationalizing Analytics
Operationalizing analytics implies an expectation that some absolute truth will be revealed by
applying statistical models that can be a panacea for the unending problems of RCM such as high
rates or readmissions in a hospital, etc. Four important components in the technology world for
operationalizing analytics in which RCM environment would become more effective are:
Data Integration Analytical Models Platform/Infrastructure Visualization
Usage of an EDW to
extract and integrate
data from multiple
sources
Predictive model
development to
quantify the likelihood
of revenue outcomes
Technology platforms to
handle with large volumes
of structured and
unstructured data
IoT usage to create visually
appealing format to access
and consume actionable
items, anytime and anywhere
Common Problems How can Operationalizing Analytics Help?
Monitoring and improve performance of RCM
cash flows
Benchmarking denials with industry standards
Predicting possible future denials
Cost Containment in RCM
Optimizing appropriate payment models based on the
size of provider organizations
Budgeting cash flow and working capital
Optimizing processes and reducing overall cost
Derive financial performance indicators for different
departments or service lines
Providing actionable insights and optimizing Denials
Management processes
Predicting and helping in retaining funds for future
capitalization, modernization and expansion
Operationalize and provide insights on cash
embezzlement, wastage, fraud and leakages
3
13. 13
Revenue & Cost Analytics
Advance analytics are imperative, not only to conduct analysis on historical information
but also to leverage the information for predictive intelligence
Few key initiatives that RCM companies should focus on using advanced analytics for
revenue and cost analytics are as follows:
4
Revenue&CostAnalyticsScenarios
Creation of new tools to reduce bad debts and A/R days outstanding
(DRO) :
Ability to adjudicate a claim instantly and provide a bill to the patient at
the POS, would significantly reduce the potential for bad debt. This
feature also helps providers reduce DRO.
Proactive denials management :
A collaborative technology platform to be used by both payers and providers
would improve the accuracy and timely notification of denials, improving the
providers ability to resubmit/appeal the claims without any errors.
Use of predictive analytics and BI:
Data Mining using robust tools and techniques, using predictive analytics and risk
modeling for revenue programs which enables providers to enhance revenues,
negotiate pricing, optimize payer contracts and improve patient treatment outcomes.
14. 14
Application Portfolio Optimization in RCM
Best-in-class performance in the revenue cycle management applications are driven by advanced
analytics for organic growth in the organizations, may it be Core RCM Operators, or Provider
Organizations, or RCM Product vendors
Advanced Analytics would drive the below initiatives in the RCM application portfolio
RCM Areas for
Optimization
Insurance
verification
Revenue cycle
optimization
Charge capture
Financial
reporting (A/R,
Net rates, etc.
Technology
Claims
management
5
Build executive
dashboards to
monitor end to
end revenue
cycle system
performances
Build right
EDW to drive
desired
insights that
leads into
actionable
analytics
Drive Insights
to understand
top performing
and low
performing
specialties and
benchmark
them
Perform root
cause analysis
of productivity
gap, purpose,
end-product
activity
analysis, etc.
Revenue
stream
systems
optimization
Optimize
integrated
systems data
Optimize
systems under
target micro
services (i.e.
Specialties)
Optimize
system
resource
productivity
RCMInitiativesKeyActionPoints
15. 15
Integrating Various Healthcare Applications
Through integration of various healthcare applications, many providers will need to forge innovative
partnerships to drive revenue cycle modernization. Partnering with key stakeholders from technology
companies to EHR/RCM vendors will offer providers a modernized, technology-enabled revenue cycle
Technology
Organizations
Providers can establish an opportunity for sophisticated analytics platforms that
improve operational efficiency as well as improve patient outcomes and enhance the
patient experience through partnership with technology companies
Payers
Payers should find right collaboration strategy to gain with their providers and
partners
Payers can benefit from access to clinical and administration data from providers,
while the increased transparency of information and communication helps to
streamline processes and reduce costs
Financial
Institutions
Integration of data and financial applications between RCM companies and providers
set the stage for new and diversified revenue opportunities, including outsourcing
fees, payment guarantee fees, and patient financing
EHR / RCM
Vendors
Vendors benefit from co-development with customers to create solutions better
tailored to healthcare needs
To create RCM operations for value-based reimbursement or transformation, the
provider organizations form partnerships with revenue cycle outsourcing
organizations and strategic alliances with industry participants (e.g., payers) or
nontraditional players (e.g., financial institutions)
16. 16
Transformative Partnerships for RCM
Integrated EHR /RCM
solutions
Improved coding solutions
Coding automation
Technology
Organizations
Platforms optimized for new
payment models
Effective claims management
Real time adjudications
Seamless patient access
Patient financing programs
Effective high deductibles
plan management
RCM Companies
Financial institutions
Cost containment initiatives
Effective denials
Management
Predictive analytics & BI
Payers
Technology enabled Revenue
Cycle Management and
Modernization
Modernization and
optimization of RCM
technology environment
Patient experience
Payer connectivity
BI & Advanced analytics
Key RCM Functionalities Provider Partners RCM Market Needs
17. 17
Few Illustrative Use Cases using IoT, EDW & Analytics
Patient
Consumerism
Patient liability estimation for providers
Patient facing estimation for patients seeking healthcare services
Home health monitoring of patients remotely
Physicians gaining insights through wearable technologies
Automated reminders
Self-Pay services and customer services experience
Monitoring patient interaction
Denial
Management
Integrated, just in time, exception-based claims management and
follow-up
Real-time and strategic denial analysis
Quick drill down to root cause of issues using prescriptive analytics
Predictive analytics to flag potential denials and address them
before claims are submitted
Registering data quality control
18. 18
Key Takeaways
Understanding RCM and its three key important functions, various RCM processes,
Key RCM IT systems and stakeholders in an RCM setup
Knowledge of the RCM world which is evolving and transforming to cater to the needs
of new technology, consumer and hospital needs
The five key imperatives transforming the RCM world, i.e. Patient Consumerism,
Applications Performance Improvement, Operationalizing Analytics, Revenue and Cost
Analytics and Application Portfolio Optimization
Understanding the working of the transformative partnerships and their RCM market
needs
And at last, few Illustrative use cases pertaining to the current scenario in RCM