To ensure timely payments, providers must make the process as easy as possible.
At a time where patients are contributing more to their healthcare costs, revenue cycle leaders are reevaluating their strategies around patient collections. There are revtech solutions for front end processes that can handle pre-service collections. Patient portals can serve as hubs for a patient's care experience, with additional capababilities allowing them to pay bills online.
Educating patients about financial responsibility has emerged as a key element of the patient financial experience.
Patients are shouldering more of the costs for the care they receive. This has put more emphasis on the patient financial experience, and providers need to educate their patients about financial responsibility.
According to a recent survey, 88% of patients feel these discussions should occur as early as possible. The majority of respondents prefer to hear about payment solutions available to them from their provider, while 20% of them prefer doing so through their preferred method of communication, like email, phone calls, or online.
For out-of-pocket care costs, according to providers, patients largely rely on credit or debit cards (53% and 49%, respectively).
Other methods include:
Cash/check, 26%
Health Savings Account (HSA)/Flexible Spending Account (FSA) funds, 23%
Payment plans (from provider), 21%
Buy Now, Pay Later, 10%
Installment Loan (from provider), 8%
Healthcare-Specific Credit Card, 7%
Providers can also use third-party financing options or payment plans to help patients fulfill financial obligations. In addition to timely payment for providers, the terms are often flexible enough to work with the patient’s financial situation.
At Ochsner Health, payment plans are offered before, during, and after care is provided. The health system offers internal and external plans that are interest-free, with the balance based on the system’s price estimate for the service.
“Additionally, we have a patient account customer service team that can help create payment plans on the backend after patients receive a bill,” Savanah Arceneaux, director of pre-service and financial clearance, shared during a recent HealthLeaders NOW Summit. “But we’re really trying to focus and capture those on the front end where we can.”
Patient portals are now instrumental to revenue cycle operations and care coordination.
Patient experience has grown in importance for hospitals and health systems, particularly regarding the revenue cycle. With patients responsible for more of their care costs, the healthcare economy is evolving to accommodate a patient-consumer market.
Patient portals have made processes quicker and more efficient, but they’ve also enabled patients to be more involved in their care, from making payments to scheduling appointments.
Billing and Payments
The rise in patient portal utilization has taken some of the strain out of the billing and payment process.
When Allegheny Health Network was looking to streamline its insurance and billing processes, the system found a financial engagement platform that allowed them to integrate data from patient’s insurance, provider, and financial institution.
Patients can also select payment plans and access other self-service tools on the platform.
Some providers and systems have seen success in expanding their accepted payment methods. For example, Lake Washington Physical Therapy was able to decrease its accounts receivable by 47% within the first month of implementing an electronic billing platform.
“We saw more volume, better margins, and less open spaces,” CEO Ben Wobker, previously told HealthLeaders. “PatientPay and our billing services have helped us get a best-in-class payment per visit, which is really important. We don’t have to see as many people because we’re getting what we actually are billing.”
Front End
The rise—and need—for telehealth solutions during the pandemic required providers to expand their digital presence and accessibility of their services and care information. Patient portals play a significant role in front-end processes, allowing patients to schedule appointments, verify their insurance, and pay copayments.
There’s a phrase that goes, “If you build it, they will come.” However, it isn’t enough for providers to simply have a patient portal. They need to let patients know about the platform and the tools available to them.
Through its Every Patient, Every Time initiative, Ann & Robert H. Lurie Children’s Hospital was able to increase its patient portal utilization from 27% to 83%. The hospital’s ongoing performance management of the portal helps them pinpoint inequities in their patient population to address alongside local government.
“[Performance management] becomes a critical component of success because now you can measure how you’re doing in real time,” former vice president of digital health, Ravi Patel, previously told HealthLeaders.
“And then be agile enough to flip the switch and go back and forth [to see what is and isn’t working.”
Where patients are able to message members of their care teams and view test results online, providers benefit from lowered administrative burdens, like at Illinois-based Springfield Clinic.
To expand its digital presence, the clinic partnered with a telehealth platform to manage tasks like patient self-scheduling and clinical documentation. The platform also pairs with the clinic’s EHR to streamline data collection.
“The most ironic part about this is that people understandably expect that technology reduces the human interaction,” Zach Kerker, the clinic’s chief brand and advocacy officer, previously told HealthLeaders.
“But what we’ve tried to do is use technology to complement a better human experience.”
"We let them know that the solution is not going to replace their job, it's going to change how they do their job."
For organizations looking to implement RCM solutions into their revenue cycle operations, staff support is a necessity and transparency is key. Open communication and including staff in vendor presentations are a few ways to ensure a seamless, and stress free, launch.
Healthcare has seen a great deal of activity in 2024, and revenue cycle operations are feeling the pressure.
Financial stability is the top priority for every organization, followed by the usual suspects, denials management and prior authorizations. Revenue cycle executives continue to look for revenue cycle management (RCM) solutions to make process more efficient and alleviate repetitive or simple administrative tasks for their staff.
Here are some of the most popular revenue cycle stories of the year, so far.
The Centers for Medicare & Medicaid Services (CMS) prior authorization rule went into effect on January 1, 2024, to help streamline the process. Delays with prior authorization can negatively impact a patient’s care, and under the rule, Medicare Advantage plans must review prior authorization policies every year.
These policies must then stay in place for as long as the patient needs a service.
With patients responsible for more of their care costs, its important for providers to be meticulous in their billing practices. Additionally, there can be legal risks if providers or health systems are overbilling or issuing incorrect statements.
Efficient processes seamlessly flowing through one another are an important element of revenue cycle operations. It provides a solid foundation for the efforts of staff and RCM solutions, which has guided OSF HealthCare’s success.
The use of automated solutions has been particularly beneficial for tasks like managing prior authorizations.
A health system needs a sufficient digital presence in order to thrive in the current healthcare economy. Patient portals make it easier for patients to coordinate care, communicate with providers, and even pay bills.
The system, working with the UC Davis MIND Institute, developed a pilot program to give neurodivergent individuals the opportunity to pursue a career in medical coding. According to the program’s director, neurodivergent individuals have an affinity for tasks like data abstraction, which aligns with skills needed for coding.
Despite the slight bump, rural and underserved facilities may see significant decreases in their reimbursement payments.
The Centers for Medicare & Medicaid Services (CMS) has issued a final rule increasing Medicare inpatient prospective payment system rates by 2.9% for FY2025.
According to the agency, the update reflects a hospital market basket increase of 3.4%, and a productivity cut of 0.5%. Payments are expected to increase by $2.9 billion and new medical technology payments to increase by $300 million.
However, rural health payments could decrease by $400 million, should legislators decide not to extend the Medicare-dependent hospital and enhanced low-volume adjustment programs. Disproportionate share hospital payments are expected to decrease by $200 million, which is attributed to a decrease in the uninsured rate.
The finalized rate is 0.3% higher than the previously proposed 2.6% increase, which providers have criticized for being too low. Despite the slight bump, their feelings remain unchanged.
The situation is particularly concerning for rural and underserved communities. A statement from the American Hospital Association says the update will “exacerbate” the difficulties hospitals are experiencing as they seek to stabilize their operating margins.
“We are troubled that the final long-term care hospital outlier threshold is nearly 30% higher than it is currently,” Molly Smith, group vice president for public policy, said in a statement.
“Since FY 2021, this figure has increased by more than 180%, which forces these hospitals to absorb hundreds of thousands of dollars in additional losses when caring for the sickest patients.”
Smith added that the increase will negatively impact healthcare access, putting more pressure on acute-care hospitals and other providers who don’t usually care for rural and underserved groups.
Providers and professional groups alike have long been vocal in their criticism of CMS’ low payment rates. Reimbursement payments not covering the cost of care is a continual issue.
In addition to the rates not keeping pace with inflation and rising labor costs, the payments themselves don’t cover the cost of care.
CMS has fined 15 hospitals so fara for related violations.
Miami-based Jackson Memorial Hospital has become the first hospital this year to be fined for a price transparency violation.
According to the Centers for Medicare & Medicaid Services (CMS), the hospital was found in violation of failing to display shoppable services in a consumer-friendly manner and not meeting requirements for hospital standards charges.
These violations relate to the price transparency rule enacted by the agency in July, which requires hospitals to report price information in a "standard machine-readable" format, accessible through a link in the footer at the bottom of their homepage.
The hospital launched its price estimate tool, Care Qoute, in 2016, which provides estimates for over 200 services based on patient's insurance coverage.
One way health systems can make sure they're in complaince with price transparency requirements is to have a team dedicated to overseeing their efforts. At Lifepoint Health, staff from the revenue cycle operations and analysis, compliance, managed care, legal, and project management departments meet regularly to ensure they're aware of updates from CMS.
Shawn McCardell (Asst. VP of Revenue Cycle, Frederick Health) and MaryAnn Murphy (Asst. VP of Revenue Cycle, Northwell Health) compare their staff/solution percentages.
While there are some repetitive tasks in revenue cycle operations that can be completed more efficiently with RCM solutions, others require meticulous attention to detail from staff. Leaders are always looking for the best ways to leverage staff and RCM solutions, but which one should have the bigger presence?
Providers continue to struggle to maintain financial stability, despite their attempts to stretch budgets and develop strategies to contain costs.
HealthLeaders recently reported on the 8% increase to practice costs, predicted for 2025—noticeable jump from the 3.6% increase previously predicted.
Cost containment has been a priority for many systems, monitoring expenditures to ensure a healthy operating margin.
OSF HealthCare’s operating margin fell to -3% in 2022, attributed to workforce disruption, according to senior vice president of financial operations, Kirsten Largent.
To contain costs, the system reduced agency spending, carefully negotiated their managed care contracts, and focused on improving the performance of value-based contracts. Revenue cycle management solutions for billing, denials management, and collections were also instrumental in the system’s financial rebound.
With more evergreen issues like denials management, maintaining diligent and consistent communication with payers can pay off, despite how time consuming the process is.
That in mind, the revenue cycle staff for One Grady, Grady Health’s billing subsidiary, are intentional and strategic in their approach to denials management efforts. Utilizing the full capabilities of their RCM solutions, which make up almost half of their revenue cycle, they’re able to minimize staff burden, contain costs, and increase efficiency.
A Financial (and Regulatory) Bind
In July, the Centers for Medicaid and Medicare Services’ released its proposal for the 2025 Physician Fee Schedule, slashing reimbursement rates by 2.8%. Providers will also see additional scrutiny around billing practices, with the agency striving to crack down on suspicious billing practices within Medicare’s Shared Savings Program.
Andy Talford, senior director of patient financial services for Moffitt Cancer Center, has watched these issues build up over recent years, witnessing and experiencing the strain on the healthcare sector.
“The combination of decreased reimbursements, escalating bureaucracy, and more rigorous documentation requirements has substantially increased the financial burden on physician groups imposed by CMS,” he told HealthLeaders.
“While efforts to balance budgets are underway, the number of Medicare recipients continues to grow, thereby intensifying the strain on healthcare providers who are already grappling with diminished funding.
Additionally, instead of alleviating provider’s substantial administrative burdens, Talford noted the increased bureaucratic requirements have resulted in a higher rate of claim rejections. To add fuel to the fire, provider’s labor costs increase due to the time-consuming process of appealing denials.
Baby Steps
As reimbursement rates and time-consuming administrative tasks pull providers away from providing care, patients are beginning to feel the effects, which are impacting their health decisions.
Of the 1000 physicians polled for the American Medical Association’s annual prior authorization survey, 78% said issues with prior authorization resulted in patients forgoing care or treatment. 94% of physicians surveyed claimed prior authorization “always, often, or sometimes” delayed a patients access to necessary care.
In January, CMS finalized its Interoperability and Prior Authorization Rule to streamline the process for Medicare Advantage, Children’s Health Insurance Program (CHIP), and Medicaid managed care plans.
Payers are also now required to specify the reason for denying a prior authorization request and publicly report their metrics. The increased transparency, Anders Gilberg, senior vice president of government affairs for the Medical Group Management Association, will “shine a light” on the way payers abuse their decision-making power with prior authorization requests.
The back and forth between providers and payers over prior authorization data exchanger is approaching its peak. Here are two programs that, if broadly adopted, could help the two sides work together to improve the process.
The tug of war over the denials and appeals process for prior authorizations is having a direct impact on patients, with a recent survey showing some are skipping treatment due to delays.
And that’s taking a toll on providers.
“We’re in a crisis,” Shanda Richards, revenue cycle director of Alaska’s Central Peninsula Hospital, previously told HealthLeaders. “We’re delaying care because we can’t get prior authorization, so therefore we have to get something in place.”
But what can compel providers and payers to work together to solve this bottleneck?
New Rules
In January, the Centers for Medicare & Medicaid Services (CMS) finalized the Interoperability and Prior Authorization Final Rule, which streamlines the process while allowing insurers to maintain some control over costs with increased transparency provisions.
The rule automates information exchanged between providers and payers to an extent, though the electronic communication aspect doesn’t apply to part B and part D medications.
Organizations like the Medical Group Management Association (MGMA) applauded the rule, which includes increased transparency provisions. According to Anders Gilberg, the association’s senior vice president, requiring health plans to provide clarity on their reasoning for denials and publicly report the aggregated metrics of their prior authorization programs will bring payors’ “egregious abuse of prior authorizations” to light.
The call for prior authorization reform is also being heard—and answered—at the state level, with 30 states introducing almost 90 reform bills collectively in 2023. These bills contained requirements similar to those in CMS’ final rule, including establishing quick response times and making prior authorizations valid for a set length of time or duration of treatment.
Home (Data)base
The healthcare industry has used digital health tools over the past several years to improve the revenue cycle process, but those advances won’t truly be effective unless the industry agrees to data exchange standards.
Despite the availability of the HL7 Fast Healthcare Interoperability Resources (FHIR) standard, which defines how healthcare data can be exchanged between different computer systems, many hospitals and health systems are hesitant to adopt the tool, either because they don’t have the resources or they don’t think it will be broadly adopted.
FHIR also doesn’t require payers to work directly with a health system’s or hospital’s EHR, which is the source of the bulk of the administrative burden.
The Office of the National Coordinator for Health IT (ONC) has encouraged FHIR use; most recently with the release of version 2.0 of the Trusted Exchange Framework and Common Agreement (TEFCA).
Version 2.0 enhances the framework, provides better support for cases beyond treatment, and simplifies onboarding processes for clinicians, digital health apps, public health agencies, and other users of health data.
“We have long intended for TEFCA to have the capacity to enable FHIR API exchange,” ONC chief Mickey Tripathi, PhD, added in a press release. “This is in direct response to the health IT industry’s move toward standardized APIs with modern privacy and security safeguards, and allows TEFCA to keep pace with the advanced, secure data services approaches used by the tech industry.”
