Revenue Cycle Challenges Frequently Experienced by Hospitals
Data suggests that many hospitals find it increasingly difficult to scale and guarantee high revenue cycle performance. As we all know, hospitals have a large number of expenses. It’s crucial that they receive prompt patient payments from insurance companies, etc. It’s vital for all hospital departments to work together to meet revenue goals. If a hospital has become financially successful, there’s a reason for it. It’s extremely important to attribute which protocol(s) works and why, to ensure the optimal execution of a revenue cycle.
One of the many reasons hospitals face financial crisis, revenue cycle success is unattainable due to roadblocks. Hospitals have to focus on the movable roadblocks, clearing the path for prosperity and gain. It’s paramount for hospitals to focus on the various components within their revenue cycle such as scheduling, patient registration and eligibility checks, upfront patient collection, claims management and medical billing and patient collections.
Below, some of the major revenue cycle challenges faced by hospitals:
The Cost of Collecting
At present, many patients are expected to pay directly for large parts of their health care costs. It’s best practice for hospitals, or any other medical provider, to collect payment from a patient at the point where service was rendered. Although this helps the hospital economically, many patients are unable to fit the total cost of a medical bill. Especially where insurance coverage has either lapsed or doesn’t cover the majority of a bill, the hospital is left to collect on the bill. The spend on resources for such collections can be large and put a dent into the over success of a revenue cycle.
Hospitals can try to reduce patients medical bills by offering discounts for prompt payment. This helps increase the percentage of payment at the point of service.
At present, medical claims data suggests that hospitals and other health care providers are writing off a larger number of claim denials, compared to five years earlier. The evidence available indicates that this trend is likely to continue, because the success rate of health care provider appeals against claim denials has declined in the last few years.
For many years, hospital medical claims were denied mainly due to technical errors. Now, the reimbursement is increasingly based on the value of the treatment to the patient, and the number of denials related to technical errors has increased. Hence, if a hospital wishes to recover large amounts, they should ensure that the clinical documentation used for making claims has improved. Hospitals should show insurance companies how they offer increasingly better health care. After all, they need to justify their claims.
Cash Flow Problems
Cash flow is important for any medical organization, due to the plethora of expenses that exist. According to data, in the last few years there has been some positive news. Cash flow has greatly improved for health care providers. Medical revenue cycle experts claim that there are many reasons for improvement in cash flow. It’s widely regarded that writing off claim denials has been particularly effective in recouping losses.
Contact us today to speak with someone on how we can be an affordable revenue cycle asset for your hospital.