Challenges in Revenue Cycle Management
Shortages in RCM (revenue cycle management) departments, coupled with an increase in post-payment audits (often referred to as RAC audits, ADRs, MAC audits, etc.), have created a dim outlook for an already overtaxed healthcare system. As a result, providers are looking for solutions to address this growing problem.
HFMA (healthcare financial management association) surveyed over 400 healthcare finance leaders, and over 25% of those surveyed stated that their RCM department needed to hire 20 or more people. As a result of the pandemic, healthcare executives are faced with not only a significant number of resignations (as part of the great resignation) but having trouble finding qualified individuals to replace those who have resigned. Additionally, I-Med Claims blog stated, “Efforts to reduce hospital workforces during the pandemic have forced revenue cycle teams to redeploy existing staff to new areas. One consequence of this shift is that there is no suitable expertise to master complex and ever-changing payment standards”.
Post-Payment Audits on the Rise
Furthermore, post-payment audits are on the rise. They have increased by over 900% increase over the last five years. Post-payment audits are “complex.” It is not just fixing a social security number or birth date. One must include medical records to respond to these audits, and often many people, departments, and external experts must opine. The Biden Administration has also increased funding to CMS to recover overpayments (many of which were through the introduction of the wide usage of telehealth due to the pandemic).
The financial woes of providers are in direct conflict with what is occurring at payors. While providers are experiencing record losses, payors are experiencing record profits. Beckers Healthcare states, “The house always wins” as Insurers’ record profits clash with hospitals’ hardship. As a matter of fact, with most healthcare organizations having released their third-quarter earnings, the gap between provider and payer profits continues to widen. It is startling that over half of the hospitals will have negative margins through 2022. Becker is not alone in their sentiment. A new American Hospital Association (AHA) report shows that hospitals are facing the most challenging year financially since the start of the pandemic as expenses and margins fail to hit pre-pandemic levels.
The Dangers of Using Spreadsheets for Post-Payment Audits
Some have suggested that part of this enormous disparity is due to the increased post-payment audits. However, Compliance and Auditing Services has stated that for every $2 a payor invests in post-payment activity, they get a $17 return. That is a whopping 850% plus return on investment which is most likely the payor’s highest rate of return on any activity they perform.
This begs the question – what tools are providers currently using to combat these audits? The answer is startling – spreadsheets. Revenue Intelligence estimates that over 31% of hospital systems use excel in managing these audits. Ben Reigle – a 20-year veteran in revenue cycle management and the Founder of RCM Leaders Forum, stated in his experience that number was “much higher.” This is equivalent to a famous old saying, “would you bring a knife to a gunfight?” Using Excel spreadsheets to manage a process where providers’ auditors are utilizing AI (artificial intelligence) to retrieve money previously earned puts providers in inherent danger.
Lastly and perhaps most importantly, without a system to handle the post-payment audits, there also exists a lack of reporting capabilities. This is troublesome to upper management for reporting purposes. Additionally, it is much more difficult, if not impossible, to address inefficiencies in a process when you are working in Excel spreadsheets.
The Solution for Revenue Cycle Management
Hospitals face significant challenges in managing their revenue cycle, particularly in navigating the complex and ever-changing landscape of post-payment audits. RAC and MAC audits are becoming increasingly common, and these audits can result in significant financial losses for hospitals if they need to be properly prepared. This is where healthcare revenue management software like RevKeep can make a real difference. RevKeep helps hospitals manage the entire revenue cycle, from patient intake to claims processing. It can help hospitals identify and mitigate the risks associated with post-payment audits. With RevKeep’s advanced analytics and reporting capabilities, hospitals can gain a real-time view of their revenue cycle and identify improvement areas. This can help them to proactively address issues before they become major problems and improve their bottom line. RevKeep’s features include real-time analytics, automated claims management, and a user-friendly interface that makes it easy for hospitals to manage their revenue cycle. Ultimately, RevKeep can help hospitals to improve their revenue cycle management, reduce the risk of financial losses from post-payment audits, and improve their bottom line.
