Many healthcare providers in the U.S. have problems with revenue cycle management that hurt their income. For example, Lawrence General Hospital (LGH) faced several issues after starting a new electronic health record (EHR) system and dealing with COVID-19. These problems were:
These issues affected LGH’s revenue cycle, causing higher costs and making it hard to stay financially stable.
These problems are not just for big hospitals. Small and medium medical practices also face them, especially when billing is complex or they have limited staff.
Healthcare groups often need help beyond their own teams to solve these challenges. Consulting firms bring experience, knowledge, and tools to guide medical practices through changes in their revenue cycle.
Here are main reasons to work with consulting firms:
Consulting firms know healthcare laws, payer rules, and trends in revenue management. They understand rules like HIPAA and how they affect billing and collections. For example, DAS Health points out that healthcare consulting needs strong knowledge of regulations to keep groups following the rules and making more money.
Good consulting firms don’t just fix one part. They offer solutions for planning, patient access, service capture, billing, and collections. For example, Nordic Consulting worked with LGH on Patient Access, Service Capture, and Patient Financial Services. This full approach reduces write-offs and improves money management.
Every healthcare group is different. Consultants create solutions that match each client’s needs. LGH did not use a one-size-fits-all plan. Nordic Consulting looked at their unique issues before making changes. This helps keep success over time.
Consultants help hospitals use technology well. From implementing Epic and MEDITECH EHR systems to automating operations, consultants help make tech useful in daily work.
For example, Tegria helped several hospitals put in Epic systems on time and without overspending. They also gave ongoing support after setup. Their work with Washington County Hospital and Clinics helped standardize operations and smooth workflows.
Changing the revenue cycle is more than new technology—it needs staff to learn new ways of working. LGH’s experience showed that managing change matters. If staff don’t adopt new tools properly, results don’t last. Consultants make sure staff training and workflow changes fit well together. This improves worker output and cuts mistakes.
Many healthcare groups face rising costs. Outsourcing some revenue cycle functions to experts can lower expenses, solve staffing gaps, and help cash flow. FTI Consulting worked with a large nonprofit hospital in the Mid-Atlantic area. They collected $53.3 million, beating a goal of $34.3 million. This gave a 9:1 return on investment and fixed over 74% of old accounts receivable.
Consulting firms usually focus on important parts to improve revenue cycle work:
Patient access means collecting the right patient info and checking insurance before giving care. Fixing scheduling, registration, eligibility checks, and authorizations cuts claim denials and lost money. LGH’s work with Nordic Consulting improved patient access. This cut write-off rates and made staff more productive.
This means collecting charges correctly for services during patient visits. Better tech and workflows make sure charges are recorded at the right time. More accurate charge capture lowers losses from underbilling. LGH improved clinical documentation and had fewer denials by fixing service capture, which helped with proper billing.
This includes billing, collections, and handling disputes. Automating simple tasks and using better tech lets healthcare groups collect more money and lower costs. Nordic Consulting changed LGH’s billing systems and automation. This reduced their need to outsource and made patient billing easier.
New technology like AI and robotic process automation (RPA) is playing a bigger role in changing revenue cycle management. These tools cut manual work, improve accuracy, and speed up tasks. They are key to successful revenue cycle changes.
For example, FTI Consulting said outsourcing partners with AI can automate tasks like claims processing, denial management, and collections. This makes work faster and lets in-house staff focus on harder cases needing human decisions.
AI systems can study large amounts of data to find patterns in claim denials, payer actions, and billing mistakes. Predictive analytics help groups stop denials early by spotting problems before claims are sent.
LGH’s work with Nordic Consulting included adding automation for billing and coding. This led to better charge capture and faster accounts receivable times. These changes improved cash flow and lowered losses.
Automation handles repetitive tasks like prior authorizations, insurance checks, payment posting, and patient notices. It also offers real-time updates for faster decisions. Automating these helps reduce costs and makes patients happier because responses are quicker and billing errors fewer.
Consulting firms such as Tegria and FTI Consulting support using these tools as part of a larger digital transformation. They say AI and automation work best when combined with aligned people and processes.
Successful revenue cycle changes need more than tech and workflow changes. Good data rules and leadership participation are very important.
Tegria points out that executive involvement keeps data accurate, follows laws, and matches organizational goals. This makes sure AI systems get good data and provide useful information for decisions.
Including key stakeholders increases openness and support. This is needed to accept new systems and processes. Consulting firms help leaders, managers, and IT teams communicate well, track results, and adjust plans based on current data.
A big challenge is finding enough skilled revenue cycle workers. Research cited by FTI Consulting shows replacing an entry-level revenue cycle worker can take 84 days and cost $2,100. Replacing a worker with over ten years of experience takes more than 200 days and nearly $5,700.
Outsourcing partners with technology and expertise fill this staff gap. They offer flexible solutions so healthcare groups can keep cash flowing and avoid hiring and training hassles.
Outsourcing revenue cycle work lowers fixed labor costs and lets internal staff focus on patient care and other important tasks. Vendors provide clear reports and root-cause analysis, helping improve processes even after outsourcing ends.
Besides short-term money gains, healthcare groups working with consultants see lasting improvements:
LGH’s example shows how this works. Their partnership with Nordic Consulting boosted net revenue by 3.4%, or $8.5 million, in the first year. They expect up to $11.2 million later. They shortened accounts receivable days, cut write-offs tied to patient access and medical need, and raised point-of-service charge capture. This shows how working closely on technology, process changes, and workforce can bring clear financial benefits in U.S. healthcare.
Medical practice administrators, owners, and IT managers should think about the value consulting firms offer when transforming revenue cycles. Using expert help, adopting technology, and changing culture and operations can improve finances and keep organizations running smoothly.
LGH faced challenges including decreased revenue, higher volumes of avoidable write-offs, increased claims exceeding filing time limits, and increased days to payments on claims due to insufficient staffing, a new EHR system, and the COVID-19 pandemic.
LGH adopted a holistic approach, recognizing that revenue cycle improvement involves aligning technology, processes, and people across the entire organization rather than just focusing on isolated processes.
LGH partnered with Nordic Consulting to assess their operations, identify issues, and implement recommendations for operational and technical improvements.
The team focused on three areas: Patient Access, Service Capture, and Patient Financial Services to optimize workflows, technology, and improve revenue cycle performance.
In Patient Access, improvements included optimizing technology and aligning workflows across scheduling, registration, insurance verification, and authorization management, leading to decreased write-offs and improved staff productivity.
In Service Capture, LGH saw increased point-of-service charge capture, improved clinical documentation integrity, earlier detection of clinical denials, and a decrease in write-offs related to medical necessity.
The team redesigned workflows and optimized technology in Patient Financial Services, which resulted in increased automation, improved collections, reduced outsourcing costs, and enhanced customer service in billing.
By May 2022, LGH realized $8.5 million in annualized net revenue gains, representing a 3.4% increase in total net revenue, with expectations of reaching $9.7 to $11.2 million in sustainable improvements.
LGH sought expertise in process improvement, technology optimization, staffing alignment, change management, and strategic advisory to ensure comprehensive and sustainable revenue cycle improvements.
Change management is crucial as it ensures that improvements are sustainable over time, enabling organizations like LGH to maintain performance gains and adapt to ongoing changes in the healthcare landscape.
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