Shrinking reimbursement rates and increasing costs keep hospital and health system CFOs and revenue cycle leaders constantly seeking strategies to improve the financial health of their organizations. Boosting revenue cycle performance is a key imperative for hospital leaders, and they’re implementing new technology and partnering with vendors to navigate the ever-changing reimbursement landscape.
Below is an overview of key points that emerged from recent surveys and studies that provide insight on the revenue cycle trends hospitals and health systems can plan for in 2019 and beyond.
A push for price transparency
- With the rise of high-deductible health plans, patients are now responsible for a significant portion of healthcare revenue. In response, hospitals and health systems are taking a more consumer-centric approach to revenue cycle management.
- Under a final CMS rule that kicked in Jan. 1, hospitals are now required to publish a list of their standard charges online. However, hospital executives and consumer advocates say chargemaster data is of limited use to people with insurance coverage because their actual costs vary based on their insurance plan and individual circumstance.
- The CMS price transparency requirement admittedly needs adjustments, but some hospitals aren’t waiting for a government mandate to take a more consumer-centric approach. Leading hospitals and health systems are investing in tools that provide patients with reliable out-of-pocket estimates based on their insurance plan information.
- Nearly 40 percent of consumers said they would pay medical bills in advance if they knew their costs upfront, according to an Accenture survey of 2,000 consumers. To protect their revenue streams and increase the likelihood that patients will pay their bills, hospitals will undoubtedly continue their consumer-friendly transparency efforts in the year ahead.
More demand for RCM outsourcing
- The hospital revenue cycle has become complicated in recent years due to several factors, including the adoption of alternative payment models and greater regulatory demand. In this environment, some hospitals are opting to outsource all or parts of their revenue cycle management functions.
- A Black Book survey revealed 80 percent of hospital leaders were vetting or considering outsourcing full revenue cycle management by 2019. The survey also highlighted the increasing demand for revenue cycle outsourcing — 18 percent of hospitals implemented a full RCM outsourcing project in 2018, compared to 11 percent three years prior.
M&A will drive new implementations
- Hospitals and health systems are engaging in merger and acquisition activity as they strive to reduce costs, add services and expand their scale on a local or national level. In an attempt to achieve these goals and adapt to shifting market demands, many hospitals are scooping up independent physician practices. In fact, a report from the Physicians Advocacy Institute and Avalere Health found 8,000 medical practices were acquired by hospitals between July 2016 and January 2018.
- As more physician practices are acquired by health systems, alignment of hospital and physician IT is critical. Hospital-owned physician practices on an integrated EHR, practice management and RCM platform collect, on average, 29 percent more on billed charges than independent physicians with unconnected EHR and RCM platforms, according to Black Book research.