Issues hospitals revenue cycle in medical billing

Top 3 Issues Hospitals face to manage Revenue Cycle in Medical Billing

The complexities in the revenue cycle in medical billing are increasing with each passing day in the American medical industry. Along with many financial management issues, the staff shortages in several healthcare systems across the country are forcing the hospitals to scale down their operations in many of their facilities. These unfortunate situations are downgrading the hospital’s revenue flow on the one hand and also affecting the patient experience. Know the top three issues hospitals are struggling to manage for revenue cycle in medical billing and how you can solve them.

1.Staff Shortage and Workforce Retention:

Staff shortages that started in the early days of the pandemic have gradually become a mammoth problem that the healthcare systems need to deal with these days. According to experienced revenue cycle leaders, the problem also lies in the fact that most of the baby boomers are retiring. It is an excellent opportunity for millennials to bring about a change in workflow management. However, not many young leaders find the grinding job of the revenue cycle in medical billing to be very fruitful, leading to less workforce retention.

Several revenue cycle leaders also say that there is a widening gap between demand and supply. Many healthcare organizations have a 15% vacancy in their revenue cycle departments. However, they are not being able to recruit the right set of professionals for the role. Even if they do, the high percentage of attrition does not necessarily help them solve the issues.

Healthcare systems are now looking for better solutions through the “smart-sourcing” technique. It means they are looking for digital partners to help them get through these issues without necessarily depending on human capital and talent acquisition. Software solutions focused on the revenue cycle in medical billing could cut down the time consumption spent on repetitive manual work and eliminate human errors to a great extent.

2.Payer-Provider Conflicts:

Payer-provider conflicts regarding underpayments or denials are not new when managing the revenue cycle in medical billing. But the problems have seen a rise in recent years due to several changes in coverage and coding updates. With the global pandemic going on, several payer networks, including Medicare and Medicaid, had changed their rules temporarily to accommodate the unprecedented situations. However, some of the temporary regulations have also been deleted in the last few months of 2022. Due to these sudden changes, many healthcare systems found themselves in financial management issues.

Some healthcare organizations have also initiated legal action to manage underpayments forwarded by the insurance companies. For example, California-based Cottage Health sued Kaiser Permanente for frequently delivering underpaid claims. According to Cottage Health, most of the underpaid claims pertain to the services rendered in the emergency room. Moreover, they also alleged that the appeal process for higher reimbursements in Kaiser Permanente has been extremely challenging to handle.

A revenue cycle leader at B.E. Smith said that the payers often deny the claims citing issues with lack of medical necessity. While sometimes the reasons are important for denial, he also cited a case where the insurer denied coverage on the ground of unnecessary medical procedures when a patient gave birth. In other cases, the insurance company rejected a life-saving service with a claim amounting to $500,000 on the ground that it was experimental. These recurring situations suggest that the provider and payer networks often do not find common ground to work on, increasing workflow conflicts and decreasing revenue flow.

3.Low Point-of-Service Collections:

Point-of-service collections have been declining for several reasons, both from the provider and payer’s end. For example, in a provider’s office, you need dedicated staff members who communicate the exact nature of financial transactions they need from the patient’s side. If the patient is unable to pay a hefty amount in one go, they can suggest patient financial services that could save the organization from bad debt. However, not all healthcare organizations have qualified trained staff to handle these open conversations, leading to confusion and patient conflicts.

On the other hand, healthcare leaders feel that the relatively low-cost, high-deductible plans taken up by low-income patients prove counter-productive for the hospital’s revenue cycle health. It becomes challenging for the patients to afford the entire out-of-pocket expenditure at the service point. Several healthcare organizations do not turn away patients due to their inability to pay. Without a better alternative, these amounts mount into bad debts.

Many healthcare systems are also evolving their payment structure so that they can seamlessly accept payment from third parties on behalf of their patients. Several revenue cycle leaders believe that integrating a greater number of payment options into the hospital finance structure will lead to more regular payments and improve the patient experience. Above all, healthcare organizations are working on building a transparent relationship with their patients from a financial standpoint to move forward with a better revenue cycle in medical billing.

There are several issues that healthcare organizations are dealing with in terms of keeping their revenue integrity strong. All the issues that they are facing cannot be solved in a simple step. On their part, they can make use of professional outsourcing partners to deal with the staff shortage. They can also use digital platforms to perform their repetitive tasks with minimal errors. As far as conflicts with the payer networks are concerned, most revenue cycle leaders believe that another federal reform might be necessary to build a better relationship between the healthcare organizations and the payers. Dialing down the complexities of the documentation and reimbursements could be a positive step in the way.

We hope this blog helped you understand the top issues hospitals and healthcare organizations face to manage the revenue cycle in medical billing. Please comment on your suggestions below. For more information on healthcare financial management and billing services, please subscribe to our blog and follow us on Instagram, Facebook, Twitter, and LinkedIn.

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