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Transforming revenue cycle management - EY - …

Transforming revenue cycle managementPartnerships for an industry-leading revenue cycle2 Health care RCMI ntroductionTraditional approaches to managing the revenue cycle will need to evolve to serve the needs of US health care providers as they adapt to changing economic conditions where the lines between financial and clinical goals are blurred. As reimbursements come under pressure and costs increase, health care providers face unprecedented pressure to maintain financial solvency, deliver more efficient care, implement regulatory mandates and reduce back-office expenses associated with receiving though provider organizations are spending millions to modernize their IT infrastructures and implement sophisticated electronic health record (EHR) systems, typical revenue cycle technology still consists of numerous stand-alone software applications and databases pieced together through a complex web of legacy and home-grown interfaces and manual processes.

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Transcription of Transforming revenue cycle management - EY - …

1 Transforming revenue cycle managementPartnerships for an industry-leading revenue cycle2 Health care RCMI ntroductionTraditional approaches to managing the revenue cycle will need to evolve to serve the needs of US health care providers as they adapt to changing economic conditions where the lines between financial and clinical goals are blurred. As reimbursements come under pressure and costs increase, health care providers face unprecedented pressure to maintain financial solvency, deliver more efficient care, implement regulatory mandates and reduce back-office expenses associated with receiving though provider organizations are spending millions to modernize their IT infrastructures and implement sophisticated electronic health record (EHR) systems, typical revenue cycle technology still consists of numerous stand-alone software applications and databases pieced together through a complex web of legacy and home-grown interfaces and manual processes.

2 Initiatives to streamline and modernize process flows and data analytics capabilities are further complicated and limited because revenue cycle systems are historically distinct from clinical systems and lack standard data models for sharing health information between payers, providers and patients. Although providers spend approximately $ a year on revenue cycle management (RCM) solutions,1 an estimated 15%-20% of nominal billing value of claims submitted,2 are typically denied, a vast majority of which are due to technical or authorization reasons that can be addressed through more integrated systems. At the same time, payer (both government and commercial) scrutiny on compliance and audit of charges continues to be high, requiring enhanced tracking and management capabilities in the RCM , the shift to value-based reimbursement models is linking payments for medical care to clinical outcomes. While in 2014, 20% of CMS payments were linked to the value-based model, the agency projects 50% of its total payments of about $600b will be linked to this model by As payers shift reimbursement based on fee-for-service to pay-for-performance, health care providers will need to optimize their RCM operations by adding technological capabilities to collect data and drive analytics for better clinical patient responsibility of payments through either higher coinsurance or higher deductibles has resulted in greater consumer engagement in their health care, which in turn is driving greater levels of transparency and improvements in the health care experience as patients increasingly comparison shop for their health care services.

3 Some of this has been driven by nearly 30 million incremental people getting access to insurance coverage through almost 100 private exchanges in the US. Additionally, the proportion of insured adults in high-deductible plans (>$1,000) has increased from less than 10% in 2003 to more than 25% in Consequently, the burden of uncompensated care to hospitals has doubled to nearly $50b in this these changes will require tighter integration across clinical and revenue cycle processes, many providers are finding that efforts to deliver improvements through re-engineering of existing systems and processes are cost-prohibitive, time intensive or not meeting expectations. To that end, health care providers are seeking new strategies that will help them transform the revenue cycle and achieve enduring resiliency that will help weather ongoing changes to the order to succeed, health care providers will need to leverage modern, more integrated technologies, establish new partnerships and develop innovative solutions.

4 While providers will need to optimize their RCM technology and operating environment, the transition must go beyond to include advanced analytics, improved payer connectivity and an enhanced patient experience to achieve a truly transformational revenue cycle environment that can meet the opportunities and challenges described revenue cycle management1 Ovum health care technology spending, Hospitals Denials management .. Insource, Outsource or Both? Holly Pelaia, Human Arc, Better, Smarter, Healthier: In historic announcement, HHS sets clear goals and timeline for shifting Medicare reimbursements from volume to value, Department of Health and Human Services, January 26, Kaiser Family American Hospital Association Financial Factsheets, 2015 care RCMIn this document, we will examine the road map for Transforming the revenue cycle of the future (Figure 1).(Figure 1)The need for transformation of the revenue cycle modelOptimize the technology environment and integrate EHR with RCMA dopt advance analytical techniquesEnhance patient experienceMove to value-based care and reimbursement cutsContinuously evolving regulation ( , ICD-10)Standardization of careIncreased consumerismIncreased patient financial burdenHealth care market forcesKey RCM ImperativesImprove payer connectivityDegree of transformationExtent of time and resources 4 Health care RCM4 Health care RCME lements of a transformative revenue cycleSuccessful health care organizations must focus on improving financial performance and enhancing the patient experience, while delivering efficiencies and reducing the overall cost of the revenue cycle .

5 The four key elements of a successful transformation include (Figure 2):I. Optimizing the RCM technology environmentII. Adopting advanced analytics techniquesIII. Improving payer connectivityI V. Enhancing the patient experienceOrganizations that successfully transform along these four pillars will be well on their way toward achieving a leading RCM Optimizing the RCM technology environmentOptimizing the technology environment is an essential step in every RCM transformation. An integrated system not only requires connecting the EHR with the RCM system ( , connecting the clinical and the financial data), but also enhancing operational capabilities of the RCM and streamlining the clinical and financial systems for greater insights into treatments, costs and outcomes. Adding functionality, such as advanced computer-assisted coding (CAC) and rules-based workflow capabilities, increases efficiency and contributes to revenue improvements through exception-based Adopting advanced analytics techniquesAdvance analytics are imperative, not only to conduct analysis on historical information to identify claims denials and revenue losses, but also to leverage the information for predictive intelligence.

6 Key elements of advanced analytics include:1. Tools to reduce bad debt write-offs and days receivables outstanding (DRO) The ability to instantly adjudicate a claim and provide a bill to the patient at the point of service significantly reduces potential for bad debt. This feature also helps providers reduce Proactive denials management A shared IT platform used by payers and providers improves the accuracy and timely notification of denials, improving the providers ability to resubmit a claim Predictive analytics and business intelligence Robust data mining, predictive analytics and risk modeling revenue programs enable providers to enhance revenue , optimize payer contracts and improve patient treatment outcomes.(Figure 2)Elements of a transformative revenue cycleI. Optimizing the RCM technology environment Integrated EHR solution Advanced computer-assisted coding (CAC) platform for efficiency and reimbursement Coding efficiency improvement/error reductionII.

7 Adopting advanced analytics techniques Tools to reduce bad debt write-offs and DRO Proactive denials management Predictive analytics and business intelligence for improving outcomes and financialsIII. Improving payer connectivity EHR/RCM platform optimized for value-based care Single platform for claims management and adjudication Real-time adjudicationIV. Enhancing the patient experience Seamless patient access Transparent pricing for single or combined services Financial counseling for high-deductible plans Patient financing program 5 Health care RCM5 Health care RCMIII. Improving payer connectivityEnhancing communication between providers and payers may be the most critical aspect of a successful RCM transformation. Payer connectivity can improve communication in the scheduling and pre-registration, eligibility and pre-certification processes. This shortens the time required for patients to set up appointments and also results in more efficient claims processing and denials management .

8 Today, some of these steps have been demonstrated or accomplished on a pilot scale and represent the long-term goals for any RCM following are functionality goals that have the potential to transform connectivity with payers:1. EHR/RCM platform optimized for value-based care Deploy flexible and upgradable systems that aggregate professional and facility billing across multiple providers or specialists and then divide reimbursement Single platform for claims management and adjudication Implementing a single IT platform for both payers and providers significantly reduces the administrative burden for both stakeholders, increases claim accuracy and reduces provider underpayments and Real-time adjudication Real-time claims adjudication through claims submission at the time of service enables providers to perform patient billing and collection at the point of service, reducing the risk of nonpayment. In addition, a detailed explanation of benefits that provides a single statement for all services rendered also enhances the patient of partnership transformation based on the degree of RCM transformation4 Enhancing patient experience2 Adopting advanced analyticstechniques3 Improving payer connectivity1 Optimizing the RCM technologyKey characteristics of an ideal future-state revenue cycleTransform the business for future RCMO ptimize for shift to value-based reimbursementLevel of partnership transformationImplement integrated EHR solution ( , Epic/Cerner)EHR/RCM platform optimized forvalue-based carePatient financing program ( , partner with financial institution)Predictive analytics and business intelligence( , partner with technology company)Real-time adjudication( partner with Payer)Single platform for claims management and adjudication( , partner with payer and technology company)

9 Seamless patient accessCoding efficiency improvement/ error reductionTools to reduce bad debt write-offs and DROP roactive denials managementAdvanced computer-assisted coding (CAC) Platform for efficiency and reimbursementFinancial counseling for high-deductible plansTransparent pricing for single or combined services1222334444311 Improve revenue cycle performanceDegree of transformationExtent of time and resources (Figure 3)6 Health care RCMC urrent ability of off-the-shelf EHR/RCM applications to address future market needsIV. Enhancing the patient experienceAs they implement targeted improvements in technology, analytics, and connectivity, providers also need to make improvements that enhance the overall patient experience, particularly in those areas most visible to patients. These include:1. Seamless patient access Providers that integrate scheduling and registration through a call center or patient portal will set up one seamless patient-friendly process.

10 2. Transparent pricing for single or combined services and patient estimates Stronger connectivity with payers will establish more effective and transparent bill estimation capabilities. Combined or integrated estimates provided to patients prior to care with inputs from both payer and provider increase transparency, improve estimate accuracy and reduce overall patient Financial assistance and counsel In many situations, providers need to provide financial counseling services to explain the increasingly complex nature of health care reimbursement, benefit plans and financial responsibility to Patient financing program In addition, offering patient financing is a necessary payment option that will both make a patient s burden more manageable and decrease bad debt for transformation through partnersAs health care providers embark on this transformation, they will soon arrive at a key decision: do they engage in this transformation through internally-developed solutions, contract with outsourced vendors or form innovative partnerships with key stakeholders (Figure 3).


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