The COVID-19 pandemic has prompted changes in various sectors, especially in healthcare. Medical practice administrators and IT managers have seen how the pandemic has affected their focus on revenue cycle management (RCM) and automation. Technology in RCM is now seen as crucial for healthcare institutions to meet current demands while preparing for financial uncertainties ahead.
The pandemic has led to significant challenges for healthcare providers, including a rise in claim denials. According to Experian Health’s 2024 State of Claims survey, 73% of finance leaders in healthcare noted an increase in claim denials. This situation indicates a need for updated RCM systems and better strategies to manage the complexities of claims processing.
The reasons for rising claim denials are varied. Key issues include the lack of automation and insufficient data analytics, which hinder efficient claims processing. Many practices relied on traditional, manual methods before the pandemic, leading to administrative delays. COVID-19 has prompted healthcare providers to recognize these outdated systems as problems, leading to a reevaluation of RCM priorities.
The Key-Whitman Eye Center in Texas demonstrates the benefits of automation in RCM. After adopting an automated revenue cycle management solution, the center noted a 38% decrease in aging accounts receivable within three months. This improvement shows that the move toward RCM automation is practical and has provided real benefits for both contact centers and medical practices.
The rise in claim denials has pushed healthcare organizations to focus more on optimizing their financial processes. A KLAS survey conducted in 2020 revealed that healthcare leaders expressed concerns over inefficiencies in outdated manual processes, fueling a demand for modernization in revenue cycle management. This urgent issue has led providers to explore advanced automation technologies to streamline workflows and improve their financial health.
With an emphasis on key performance indicators (KPIs) in the revenue cycle—including the number of days in accounts receivable and initial denial rates—healthcare providers are realizing the benefits of transitioning to automated workflows. Organizations that did not prioritize automation in the past are beginning to see its vital role in maintaining healthy cash flows, particularly in the changed environment caused by COVID-19.
Healthcare finance leaders must reconsider their strategies given these new challenges. The pandemic has highlighted the role of technology in easing administrative burdens, prompting many organizations to update their RCM systems. There has been a shift in how automation is viewed—from a luxury to a necessary element of effective financial management in healthcare.
In a climate of uncertainty and shifting payer policies, healthcare organizations can no longer overlook automation in their revenue cycle management. Many executives now see intelligent automation as a way to boost productivity and ensure timely reimbursements. The pandemic has led to a change in thinking where modernizing RCM is recognized as crucial for sustainability and not just as a method for increased efficiency.
Automating parts of RCM not only accelerates the claims process but also lowers error rates. Intelligent automation tools can help healthcare organizations manage billing and claims processing with real-time error detection and correction. These enhancements are especially important as 60% of healthcare leaders report that inadequate claims scrubbing affects revenue streams. By adopting automation, practices can streamline their billing and collections, creating conditions that support better cash flow and financial stability.
Artificial intelligence (AI) is changing the field of revenue cycle management. The use of AI can simplify and enhance different aspects of healthcare RCM processes. AI-driven tools are critical, especially in claims processing. They help make submissions smoother, improve cash flow, and enhance accuracy by lessening administrative workload.
For example, predictive analytics use past data to predict future outcomes. This approach is increasingly used to refine financial forecasting and resource distribution. By recognizing trends and patterns in data, predictive analytics assist organizations in making smart choices, contributing to operational efficiency.
AI also enhances coding accuracy. Automating coding tasks lets healthcare providers ensure that claims are submitted correctly and promptly, which is essential for getting reimbursements on time. Furthermore, AI systems can track compliance with regulatory standards, maintaining revenue integrity while lowering risks related to audits and discrepancies in reimbursement.
Another issue that surfaced during the pandemic is the frequency of changes to payer policies, as noted by 77% of healthcare finance decision-makers. These complexities in claims processing require RCM systems to be adaptable. As practices aim for compliance in a constantly changing setting, they are turning to technology to help navigate these challenges more effectively.
Healthcare organizations are recognizing that a strong RCM system with intelligent automation can significantly reduce difficulties from complicated payer environments. This necessity has accelerated the adoption of advanced automation technologies within healthcare operations, enabling providers to manage evolving payer dynamics better.
Automation in RCM also improves the relationships between healthcare providers and patients. By using automated communication tools, practices can keep patients updated regarding their billing procedures. Automated notifications about payments, claims submissions, and insurance updates help reduce confusion and enhance patient satisfaction.
Organizations like Waystar, in collaboration with partners such as Patientco, are increasing the resources available to healthcare providers. Their solutions are designed to meet the essential needs within revenue cycle management by offering various payment options, which might ease payment concerns during the pandemic.
The future of revenue cycle management in healthcare seems linked with technological progress. More than half of hospitals not currently using automated solutions indicate plans to implement them soon. This trend shows that medical practice administrators and IT professionals are prioritizing automation in their operational strategies moving forward.
Healthcare executives who see the need to modernize their revenue cycle management processes are positioning their organizations for immediate benefits and long-term sustainability. By investing in automation and AI technologies, these leaders boost efficiency and cut operational costs, creating frameworks that can better endure future disruptions, including pandemics or economic fluctuations.
As medical practice administrators and IT managers deal with the complexities resulting from the COVID-19 pandemic and its impact on healthcare, the need for automation in revenue cycle management is clearer than ever. The past few years have emphasized the need for flexibility, innovation, and responsiveness in maintaining financial stability within healthcare organizations. By integrating intelligent automation and utilizing AI tools, healthcare providers can tackle current challenges and prepare for an unpredictable future.
The partnership aims to deliver an AI-powered hospital revenue cycle solution to improve efficiency in reimbursements and compliance, using predictive analytics and machine learning technology.
Healthcare leaders have noted the over-complicated and outdated manual processes as key reasons for the need to optimize revenue cycle management.
The top revenue cycle KPIs include number of days in accounts receivable (A/R), aged A/R, initial denials rate, discharge not final billed (DNFB), final write-offs rate, and cost to collect.
About a third of hospitals and health systems do not currently utilize automation in revenue cycle management.
Implementation can lead to difficulties, such as needing to engage multiple vendors and having to manage internal automation teams or external consultants.
They reported a 38% decrease in aging accounts receivable within three months and improved staff efficiency through optimized worklists.
Automation is more common among larger health systems compared to smaller hospitals, likely due to costs and financial constraints.
Over half of hospitals not using automated solutions plan to implement them by the end of 2021.
The acquisition focuses on simplifying healthcare payments and offering patients payment plans, financing options, and financial education.
The pandemic has likely hindered smaller hospitals from prioritizing automation due to financial challenges.
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