Healthcare revenue cycle management (RCM) solutions help facilities manage the key clinical and administrative processes associated with claims submission, payment, and revenue generation. RCM involves a whole gamut of services from patient scheduling and patient registration, insurance verification, medical coding, claims submission, charge capture, and payment collections. Successful RCM and medical billing processes are essential for facilities to ensure they get paid for services rendered to patients. Many organizations outsource medical billing to an experienced third party service provider to optimize RCM. According to a recent Revenue Cycle Intelligence report, value-based initiatives are driving providers to prioritize RCM in their investment plans in order to reduce costs and improve quality of care.
Value-based care depends on clinical data to measure quality. Care quality improvement is the crux of value-based care. Providers need to invest in data analytics infrastructure or vendor-sponsored systems to help analyze quality metrics and monitor an organization’s progress. EHRs are a good starting point for revenue cycle analytics.
According to Definitive Healthcare, the leading provider of data and intelligence on the healthcare provider market, EHR adoption rates rose from 73 percent in 2009 to 98 percent less than a decade later. This has improved both care quality and reduced total costs of care. However, even with EHR implementation, providers realize that a lot of work needs to be done to prepare the revenue cycle for value-based reimbursement. In fact, according to a 2018 Black Book survey, about one-quarter of US hospitals (26 percent) does not have workable healthcare revenue cycle management solution (www.revcycleintelligence.com). Without a practical and effective revenue cycle management solution, hospitals could lose revenue in the value-based reimbursement system. This could become even more challenging with complex payment structures such as bundled and capitated payments.
As private and public payers implement alternative payment models to lower costs and improve care quality, the number of payments linked to value-based reimbursement is increasing. Revenue Cycle Intelligence cites an expert as saying that, in this situation, providers need powerful analytics that can take clinical and outcomes data in clinical systems and combine it with financial data to accurately measure where they can improve quality based on outcomes results. According to Cognizant, the key challenges confronting providers in the adoption of value-based RCM solutions are:
- Restructuring of their business, and operating and technology models and finding people skilled in value based care delivery
- Capturing critical data at the point-of-care that allow reporting and analytics required for value-based reimbursement
- Analyzing claims and operational data to better model and understand the financial risk that value-based care entails
- Dealing with differences in payer contracting by market and payer type, i.e., commercial, federal or state.
Recent reports indicate that healthcare providers are beginning to take action on these matters to optimize revenue cycle-related EHR functions. In an article dated June 10, 2019, Revenue Cycle Intelligence reported that 68 percent of hospital executives in a recent Healthcare Financial Management Association (HFMA) survey said their organizations plan to increase revenue cycle IT budgets in 2019. The report backs this up with statistics from Definitive Healthcare:
- Hospitals and health systems installed over 9,000 RCM solutions by April 2019
- 37 percent of these installations occurred between 2012 and 2017 and 10 percent took place in the last 12 months
- 91 percent of hospitals have at least one RCM module installed as of April 2019
Changes associated with value based care include using more specific diagnosis and procedure codes and reporting them to meet payer requirements, dealing with increasing audits and payer scrutiny, consumerism wherein patients are more active in their care and paying for it, and data analytics to capture of quality metrics and population health initiatives.
All of these factors are driving the growth of the medical billing and coding outsourcing market. According to the Market Research Gazette, the healthcare RCM market was worth USD 35.25 billion in 2014 and is expected to reach a value of about USD 89.66 billion by 2023, growing at a compound annual growth rate (CAGR) of 10.93% during the forecast period. Vendors are competing by offering comprehensive data analytics services, cloud-based services, clinical system integration, and more. Outsourcing the back-end revenue cycle management solutions can save resources in terms of time and money, while ensuring success in risk and compliance management.