In today's unyielding economic climate, the majority of hospitals and health systems are acutely interested in improving performance while embracing innovation to improve the functionality of their revenue cycle.
Current trends indicate hospitals are losing 3 percent to 5 percent of their net revenue from inadequate revenue cycle management processes and procedures. Capturing revenue from all payer sources has become of paramount importance for hospitals to thrive in our difficult economy and in some cases, stay in business.
The largest amounts of revenue losses are a direct result of poor data capture at the front end of the revenue cycle and operational inefficiencies throughout. You can browse https://www.oncospark.com/hospitals/ to know more about hospital revenue cycle management.
A smaller but still significant amount of losses come from unidentified or undetected government and commercial revenue sources that end up in the self-pay financial class and eventually go uncollected.
Additionally, even though some of these unidentified insurance accounts may ultimately be collected later, the result of financial class misallocation of insurance coverage results in an unnecessary increase of AR days.
Bad debt continues to rise as patients take greater risk by choosing higher deductible plans to reduce their overall out-of-pocket costs. Even with the advent of healthcare reform, many patients are forced to underinsure themselves or go without insurance altogether.
The challenges of collecting self-pay accounts continue to rise, as patients have become more astute consumers. In some cases, patients choose hospitals that have the spottiest collection track record and continue a repetitive cycle of receiving services without paying for them.
Aside from the collection challenges of self-pay, hospitals are plagued by the rising cost and financial repercussions of performing revenue cycle activities such as handling insurance payment rejections and denials, identifying lost charges, delayed payments, underpayments, and the hidden cost of rework.
Healthcare executives are looking for cost-efficient, overarching strategies and technology solutions, which complement their current systems and processes, and provide the business and operational intelligence data needed to optimize financial and operational performance.
Many hospitals have made great progress in developing new processes and procedures to improve and positively impact revenue cycle performance. The challenge for these facilities is sustaining the financial benefits over the long haul. This is more difficult than meets the eye.