RCM/Financial Info Systems
Financial, operational assessment key to improving RCM
By establishing a committed partnership of third-party resources and internal staff, provider organizations can be proactive rather than reactionary.
By Nancy Ruff M
eaningful use of electronic health records (EHRs), HIPAA 5010, ICD-10 and federal programs that shift reimbursement models from fee for service to outcomes-based pay-
ment are shaking up the healthcare industry. Collectively, these programs will have a massive impact on the revenue and fi nancial viability of hospitals and medical groups. Throw in the Centers for Medicare and Medicaid Services expanding the number of audits to uncover overpayments and fraud, and the potential for fi nancial damage is signifi cant. To stay ahead of the continual clinical, fi nancial and regu- latory challenges they face, healthcare organizations must rethink their approach toward revenue cycle management (RCM) processes and software. With payers increasingly hold- ing providers accountable for the quality of care they provide, the fi nancial health of hospitals and medical groups will hinge on how effi ciently they bill and collect the money they are owed while reducing expenses associated with those tasks.
To stay ahead of the continual clinical,
fi nancial and regulatory challenges they face, healthcare organizations must rethink their approach toward revenue cycle management (RCM) processes and software.
By establishing a committed partnership of third-party resources and internal staff, provider organizations can be proactive rather than reactionary because reactive moves and Band-Aid technological fi xes will put them at a huge competitive disadvantage. The latter approach will create problems that organizations can ill afford to have, particularly
6 May 2012
in light of the continual and rising stream of legislative and market changes they will face in the foreseeable future.
Analyzing performance The fi rst step providers must take to ensure fi scal health is to conduct a fi nancial and operational assessment involv- ing an in-depth review of three core areas of RCM: fi nancial performance, technology and workfl ow. The fi nancial performance analysis includes gathering and reviewing accounts receivable (AR) reports that will enable providers to quantify a host of metrics tied to billing and col- lections. These include days in AR, collection rates, aged AR by payer and the percentages of clean and denied claims by payer. Providers also should review denied claims from their top 10 payers to determine why those claims were rejected and identify possible patterns.
Nancy Ruff is the director of health advisory services at CTG Health Solutions. For more on CTG Health Solutions: www.rsleads.com/205ht-209
Once this step is completed, an organization can use this data to compare itself against industry standards from the Medical Group Management Association (MGMA) or other third-party data source to see how its performance compares against peers and national norms. Through benchmarking, hospitals and medical groups can identify areas they need to address to improve profi tability.
Assessing technological capabilities and needs When it comes to billing software, it is common for pro- viders to make penny-wise, pound-foolish decisions. They invest in systems that allow them to capture demographics and perform basic processes, but decline to pay for separate modules – such as batch and real-time insurance eligibility, contract management and robust reporting − that can dra-
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