In today’s changing healthcare environment, the efficiency of revenue cycle management (RCM) is important for the financial health of various specialties and independent practices across the United States. The RCM process includes activities from patient scheduling to payment collection. It involves different departments and personnel, requiring coordination and accuracy to optimize performance. Within this framework, custom edits have emerged as a key solution, enhancing the efficiency and cost-effectiveness of RCM.
Revenue Cycle Management is a structured approach that healthcare organizations use to manage financial operations related to patient care, billing, and revenue collection. Effective RCM aims to minimize claim denials, improve financial performance, and ensure compliance with regulatory requirements. Key steps include scheduling appointments, patient registration, charge capture, billing, denial management, and accounts receivable management. For healthcare practices, managing these processes not only helps operational efficiency but also improves patient experiences and satisfaction.
Custom edits are specific rules or automated corrections applied to claims before submission, meant to prevent errors and streamline the claims process. These edits allow practices to address potential issues ahead of time, which reduces the chances of claim denials and related rework. For example, a recent study revealed that Piedmont HealthCare implemented custom edits on 14,245 claims, resulting in an estimated saving of $89,031.25. By spending only $8 per edit instead of $25 for handling denials, healthcare organizations find notable financial benefits from using custom edits strategically.
A significant aspect of custom edits is their ability to save time and improve cash flow. Applying 704 custom edits helped Piedmont HealthCare save about 10,667 hours in claim handling time. This proactive approach lowered the median denial handling time, allowing staff to focus on other critical areas.
The introduction of custom edits has improved accuracy in coding and billing processes. By using preventative measures, practices can reduce the risks connected with inaccurate claims submissions. This adaptability is crucial due to the changing nature of healthcare regulations and payer requirements. Darlene McLain, Director of Business Services at Piedmont HealthCare, mentioned that the Advanced Claims Editing (ACE) feature gave clarity in error messages, enabling staff to respond to claims challenges before they became major issues. These improvements lead to fewer claim denials and better financial outcomes overall.
The integration of technology into RCM processes also supports the effectiveness of custom edits. Software solutions that use customized edits assist healthcare administrators and staff without needing specialized technical skills, streamlining workflows. This technological approach improves error management and increases confidence among providers challenged by coding complexities.
The financial effects of incorporating custom edits into revenue cycle processes can be considerable. The cost savings from better claim management capabilities allow practices to reinvest in technology, staff, or quality improvements in patient care. The cost-effectiveness of these edits is clear, as automating rule changes, such as those implemented by Piedmont HealthCare, resulted in around $33,187.50 in labor cost savings. Automated systems ensure that every claim undergoes evaluation that can efficiently identify issues, preventing costly errors and increasing overall revenue streams.
Healthcare administrators in the U.S. should think about how custom edits can enhance their existing RCM systems. With ongoing regulatory changes and an anticipated healthcare growth rate of 30.42% from 2024 to 2034, practices need to adopt new technologies that not only lower expenses but also improve efficiency.
Despite the potential benefits, healthcare organizations encounter hurdles in implementing effective RCM processes. Challenges include staffing shortages, especially among billing and coding personnel, affecting the ability to manage claims accurately. Furthermore, the complexities of medical coding, compliance with standards like HIPAA, and proper clinical documentation management can overwhelm many practices.
To tackle these issues, adopting comprehensive RCM software that integrates custom edits is essential. Technology that includes automated coding, decision support, and workflow management can address these barriers. The Solventum™ 360 Encompass™ System, for example, connects coding and Clinical Documentation Integrity (CDI) teams, promoting collaboration to enhance coding accuracy. This system’s features, including computer-assisted coding and AI-driven workflows, simplify coder tasks and boost productivity.
The use of artificial intelligence (AI) in RCM processes is changing how healthcare practices approach billing and coding. AI-driven solutions enable automation, allowing practices to manage routine tasks that would normally require considerable human effort. This helps streamline the RCM workflow—reducing human error, improving data quality, and enhancing patient interactions.
By 2024, 43% of healthcare leaders are using AI for in-hospital patient monitoring, with 85% planning future investments in AI technology. This indicates a significant trend in healthcare, characterized by the widespread adoption of automated systems for managing patient data and optimizing cash flow. For billing administrators, this means greater efficiency and reduced labor costs, particularly when used alongside custom edits that ensure accuracy throughout the claim lifecycle.
Telehealth services illustrate how AI and technology enhance healthcare delivery. Approximately 79% of U.S. hospitals now provide virtual services, demonstrating the growing demand for integrated solutions that serve both RCM and patient care. By adopting technologies that support telehealth, organizations can improve accessibility while continuing revenue collection across various methods.
The future of RCM points toward better scalability and interoperability, especially as 90% of health systems are expected to use FHIR APIs by 2025. These open-source Electronic Health Record (EHR) solutions facilitate easier integration between different healthcare systems while providing flexibility to customize workflows. This is vital for practices aiming to maximize efficiency without becoming dependent on a single vendor.
Adopting open-source systems can enhance a practice’s ability to manage diverse tasks—from scheduling appointments to processing insurance claims. The interoperability of such systems ensures healthcare providers have access to real-time information, crucial for promptly addressing patient needs.
As healthcare organizations face the complexities of revenue cycle management, combining custom edits, AI-driven processes, and scalable technologies offers a path to a sustainable and efficient future. Practices can better manage their financial health, comply with evolving regulations, and ease the administrative burden on employees. With many physicians dealing with burnout connected to rigid EHR systems, customizable and interoperable workflows can greatly enhance physician satisfaction and lead to better patient care.
The impact of custom edits on revenue cycle management in healthcare practices across the United States is significant. These proactive measures improve financial performance by preventing claim denials and optimizing workflow efficiency. Along with advancements in AI and integrated technologies, practices find new ways to streamline operations and enhance patient experiences. In light of increasing healthcare demands and regulations, using these strategies will support compliance and contribute to the lasting success of healthcare organizations. For medical practice administrators, owners, and IT managers, the future of RCM appears promising—a promise that is now a practical implementation for sustainable growth and operational success.
Piedmont HealthCare struggled with recruiting experienced staff for managing complex claim processing and frequent denials. As an independent, physician-owned multi-specialty practice, effective claim management was vital for their financial well-being.
ACE provided a user-friendly interface for managing custom edits, reducing claim denials and rework. It enabled providers to efficiently resolve issues and adapt to regulatory changes, enhancing overall RCM performance.
Custom edits are specific rules applied to claims to prevent errors before submission. They help avoid costly denials, streamline processes, and contribute to significant cost savings in claim handling.
In 2023, applying 704 custom edits to 14,245 claims resulted in an estimated savings of $89,031.25, as it cost only $8 per claim compared to $25 for handling a denial.
Applying 704 custom edits saved approximately 10,667 hours. This proactive approach prevented a median of 45 minutes of additional work per claim by addressing issues before they resulted in denials.
Automating 21 rule changes affected 52,830 claims and yielded around $33,187.50 in labor cost savings by minimizing manual intervention and streamlining claim processing.
Plain language error messages clarified issues for providers, enhancing their confidence in claim submissions and enabling proactive resolutions, ultimately saving time and resources.
Timely payment is crucial for cash flow management and financial sustainability. Delays can lead to operational challenges, particularly for independent practices without large health system support.
By leveraging ACE, Piedmont HealthCare experienced a substantial reduction in claim denials, leading to improved accuracy in claim submissions and better financial outcomes.
RCM technology like ACE regularly updates editing packages to reflect Local and National Coverage Determinations, helping practices stay ahead of payer trends and regulatory changes for continuous improvement.
Simbo is using AI agents to automate all phone related workflows. Connect now to know more.
Schedule AI Agents Demo Now© Since 2019, Simbo AI.
