What the circulatory system is to the human body, the revenue cycle process is to medical organizations. It’s highly interwoven and what makes healthcare delivery possible, from powering X-rays and MRIs in radiology to reviewing patient accounts and EMRs at the front desk. Interruptions or obstructions lead to inefficiency at best and financial collapse at worst.
Revenue cycle point solutions stop the bleeding and overcome blockages. The key is knowing where the pinch points exist.
“The median organization receives just 1% of patient revenue at the point of service.”
Part of the issue when it comes to revenue is the staggered basis in which medical facilities receive payment. For example, based on the most recent statistics available from Advisory Board, the median organization receives just 1% of patient revenue at the point of service, a modest improvement from 0.8% in 2017. More facilities are receiving as much as 3.4% of patient revenue on the same day patients first come in for treatment.
Receiving funds much later – weeks or months later – can create cash flow problems that harm other departments of medical organizations, whether that’s at the front desk or in overhead-related expenses. And that’s if payments are even made. Bad debt – meaning the difference between what was billed and what is still outstanding – doesn’t go away on its own. Profit losses become evident eventually.
Medical facilities may be able to better address revenue cycle hiccups through price transparency, as predictability and forecasting prices estimates can help ensure patients are more likely to pay their bills in a timely fashion. Currently, however, just 11% of organizations offer price estimates based on gross charges, the Advisory Board found. Additionally, only 5% of providers who offer price estimates do so after consulting data that details what their patients have paid historically.
Revenue cycle highly circuitous
If a larger portion of medical bills aren’t paid at the time of service, it can lead to a convoluted revenue cycle and point of service collection. This includes – but is not limited to – scheduling, pre-registration, arrival and intake, insurance verification, coding, billing and collections. According to a 2016 study done by Mad*Pow, roughly a quarter of patients are surprised when they get bills in the mail because they thought insurance would cover them. You can prevent patients from feeling blindsided through greater transparency regarding what treatment costs. It may also help to mitigate the risk of claims being denied, which is the overarching goal of denial management.
“Unpaid billings and high costs creates a vicious cycle that can be felt throughout the healthcare continuum.”
Unpaid billings and high healthcare costs create a vicious cycle that can be felt throughout the healthcare continuum. U.S.-based medical facilities spend approximately $496 billion each year on billing and insurance-related expenses, according to the Center for American Progress. These cost realities can be compounded further when patients don’t have insurance, policies lapse or claims are denied.
How can this situation be rectified? Through customized revenue cycle point solutions. Thanks to the digital revolution and state-of-the-art technological innovation, many of the bill payment collection wrinkles can be ironed out via integrated technology. Frequently, the revenue cycle is fragmented and siloed. This hinders communication and stymies collaboration, which is pivotal to revenue cycle point solutions.
Invest in patient and financial engagement solutions
For patients to truly reap the most out of their appointments – and to help them pay in a timely manner – they must be able to take advantage of tools and resources that they can understand and integrate into their daily routines and interactions. Your practice can help patients remain current on their bills by investing in engagement technology like text messaging, patient portals, and e-mails. A comprehensive patient engagement software solution clearly specifies patient responsibilities both before and after the appointment.
Whether it’s automating accounts receivable or integrating your existing EMR architecture, Tangible can bring balance, clarity and transparency to your revenue cycle and billing processes. Contact us to learn how so you can better manage the financial side of healthcare.