Author: Blake Sorrell, Director, Healthcare Banking
From the smallest provider to the largest facility, managing the revenue cycle remains one of the biggest challenges for the healthcare industry. At fault are a mix of factors, including narrow margins, high costs and an evolution in the insurance industry toward self-pay.
According to the most recent statistics, over half of American workers are enrolled in a high-deductible health plan (HDHP). HDHPs shift much of the cost burden to the patient through higher deductibles, requiring providers to obtain more of the cost of care from the patient’s own wallet.
Of course, internal operations and processes also play a part in complicating revenue cycle management. For instance, many organizations continue to rely on paper invoices for billing, a process that requires a number of manual interventions.
As a result, the number of organizations employing revenue cycle automation increased 12% year-over-year in 2020, with 78% of health systems currently using or in the process of implementing some form of automation technology.
If you’re wondering what revenue cycle automation can do for your healthcare organization, keep reading as we cover the benefits.
Currently, nearly 90% of providers utilize paper and manual processes to issue patient bills and track and receive payments. Manual processes across the revenue cycle lead to slow turnaround times and lower profitability for providers. In fact, 78% of healthcare organizations responding to a recent survey indicate that they are unable to collect on invoices over $1,000 in less than 30 days.[i]
Automating key points of the revenue cycle speeds this process in a number of ways. First, the majority of patients prefer to receive electronic statements. Revenue cycle automation makes it possible to send bills electronically, prompting faster payments by communicating through the customer’s channel of choice.
However, payment automation goes far deeper into internal processes than sending billing statements. With automation, providers can streamline workflows surrounding billing and payment collection to reduce the number of days it takes to close out an invoice.
The process of automating the revenue cycle begins with the insurer’s explanation of benefits. Using a combination of optical character recognition and data verification technology, information from varying insurer forms is extracted and digitized to create an electronic posting file.
The organization then receives a standardized file for viewing insurance information. Standardizing documents makes it easier to apply payments, bill additional carriers and even research denials.
Digitized data can then be pulled to expedite other areas of the payments lifecycle, such as billing. Prefilling invoice fields with available information reduces the need for manual data entry, eliminating many of the errors that are introduced and replicated across the process for faster outcomes with less risk. Workflows are also improved, providing staff with more time to dedicate to higher value tasks.
Automation can also be used to expedite payments as they are received. Utilizing a lockbox, for example, providers can accept multiple payment formats and quickly post payments to speed cycle times.
This approach is particularly advantageous when receiving payments by check. With a lockbox service, paper payments are scanned and verified for faster processing, but there are additional benefits as well.
The electronic data capture associated with a lockbox makes information readily accessible across the revenue cycle, facilitating faster downstream processes. Providers can later search information based on deposit date, check number, patient name and account numbers, making it easier to access and verify past payments.
In the end, automating key points of the revenue cycle can increase internal efficiency, allowing the organization to do more with less, and even reduce cycle times through faster and more efficiently handled payments. The benefits even come by way of bottom line results, opening doors to a $16.3 billion opportunity across the industry.
Interested in learning how revenue cycle automation can help your organization? Contact our team.
About the Author
Blake is a Director of Healthcare Banking, working with hospitals to contain costs, improve controls and accelerate revenue cycles. He believes that stronger financial management can mitigate many concerns around profitability, allowing administrators to focus more on patient outcomes. Blake is proud to be a part of the FNBO community—one that meets the definition of a “great big small bank”—and strives for the personal touch in all of his banking relationships.
[i] Jacqueline LaPoint. “Patient Collections Takes Over a Month for Most Providers.” Xtelligent Healthcare Media. Revcycle Intelligence, Apr. 30, 2020. Web.
The articles in this blog are for informational purposes only and not intended to provide specific advice or recommendations. When making decisions about your financial situation, consult a financial professional for advice. Articles are not regularly updated, and information may become outdated.