Article
How healthcare organizations can optimize financial performance and increase revenue
May 16, 2024
The state of financial performance in healthcare today
These challenges pose serious threats to the long-term viability and sustainability of many healthcare organizations, and potentially jeopardize access to care for millions of Americans. Understanding the root causes and ramifications of these financial headwinds is crucial for healthcare leaders if they seek to improve financial performance. So, before we dive deeper, let’s examine the most pervasive barriers that healthcare organizations face to growth.
Common challenges: the biggest barriers to efficiency and growth
- Difficulty collecting full payment – It’s getting harder to get paid, and the overall denial rate has increased to 12% in 2023, up from 10% in 20203 and large healthcare organizations often struggle with collecting timely payments from patients for care provided. The biggest reasons for this barrier include outdated digital systems and patient portals, issues with payer and claims denials, and long lag times after a claim is approved.4
- Administrative and operational burden – Like many providers in the U.S. today, hospitals and other large healthcare organizations struggle with the systemic issue of burnout and the phenomenon known as “pajama time”, which describes time spent by care providers doing clinical notetaking and documentation after hours. These trends – alongside unsustainable administrative tasks, lack of operational rigor, and lack of automation in healthcare technology—are all major challenges that healthcare organizations must overcome if they seek to drive efficiency and growth.
- Struggling to stay on top of industry changes – Staying in the know about industry changes like new medical codes, as well as a lack of interoperability, are also preventing healthcare organizations from achieving progress when it comes to financial stability. With literally thousands of medical codes to keep track of, it can be hard to keep up.5 The growing burden of regulatory and compliance changes has tacked on added administrative work and expenses that affect the bottom line.
Understanding revenue cycle management in the healthcare industry
Revenue cycle management (RCM) is a vital process used by healthcare organizations to manage financial operations, from the point when a patient schedules an appointment all the way to accounts receivable (A/R) follow-up. RCM is essential to the day-to-day operations of all healthcare organizations in the U.S., with the global RCM market valued at over $658 billion by 2030.6 The process is complex, involving patient intake, insurance verification, authorization management, medical coding, communicating with payers to bill claims, managing claim denials, and ensuring compliance with all billing rules. But the overall goal of RCM is to help healthcare organizations ensure they’re paid timely and efficiently, collect what’s owed for care provided, and in such a way that mitigates any potential errors or denials from the payer.
The key steps of the RCM process include:
- Patient schedules an appointment
- Patient is registered in the healthcare org’s system (EHR or EMR)
- Charge capture is completed for the patient encounter
- A claim is created, submitted, and billed to the payer (the insurance company of the patient)
- Any possible denials that may arise from the payer are managed so that the claim can be resubmitted and processed
- Patient billing for any costs owed that are not covered by the payer
- A/R follow-up for any unpaid claims to ensure reimbursement
An effective RCM process works to streamline these steps and ensure regulatory compliance to optimize revenue capture, minimize denials and delays, and improve overall financial performance for healthcare organizations.
RCM best practices and core benefits
So, what does it look like when a healthcare organization has implemented an effective RCM process? In order to maximize financial performance and increase operational efficiency, all RCM processes used by large care providers should follow the below best practices:
• Streamlining administrative tasks - reducing burden and freeing up time to perform other essential work and better serve patients.
• Operational excellence and strong back-office standards - helping drive maximum productivity.
• Training and education for staff on the RCM process - helping increase efficiency and proactively preventing any issues with payers.
• Strong denial management systems - ensuring that any claims denials from payers are addressed to secure reimbursement.
• Monitoring and analysis of revenue - leveraging data and reporting to help track KPI and drive revenue growth.
• Maintaining updated, mobile-friendly digital payment systems - allowing patients to pay their bills quickly and conveniently.
By implementing these RCM best practices into their daily workflow, healthcare organizations can overcome operational and financial challenges, capture appropriate reimbursement, and lay the foundation for long-term sustainability.
Now, let’s take a closer look at some of the ways that your healthcare organization can alter your RCM process to drive increased revenue and support your bottom line.
Opportunities to transform the RCM process and increase your financial performance
1. Enhance the patient experience to attract and retain more patients
Dedicating time to enhancing and bettering the patient experience can help your healthcare organization in the short and long term. Current patients will be encouraged to regularly return for the care they need and will also share their positive experience with others, creating a network of referrals to you. Focusing on the patient experience yields additional benefits like improved scheduling volume, reduced no-show rates, reduced gaps in care, and greater patient satisfaction and loyalty.
By engaging patients through automated messages and tailored messaging campaigns, you can improve patient communications while also reducing proactive outreach work for your staff. In addition, providing self-service actions for patients, like self-scheduling and digital bill pay, helps provide them with flexibility around care and payment options, and helps practices maintain schedule density without staff support. Digital bill pay also helps remove barriers to payment, so patients can make digital payments quickly and on their own time.
2. Use cloud-based RCM tools to get paid what you’re owed faster and drive increased efficiency
If you’re currently using an on-prem RCM solution, you might want to consider switching to a cloud-based tool instead. Not only do cloud-based RCM tools help healthcare organizations save money on maintenance, energy, and operational costs, but using a cloud-based solution gives you access to real-time updates and data related to billing rules, medical coding, and more, while easily adding support software services that help reduce burden and create cleaner claims. Managing your RCM process in the cloud also provides better data security and reliability, and you can scale and adjust your cloud storage as needed, or as your healthcare organization grows.
3. Gain visibility into financial performance to make informed, data-driven decisions for your business
With the right RCM tool, you can gain actionable insights into the financial health of your business to discover revenue and efficiency gaps and identify opportunities to reduce burnout in providers and staff. Using metrics gleaned from your RCM solution, you can enhance your perspective on the market by leveraging healthcare industry insights and benchmark data of other organizations similar to your own, helping you understand what your peers are doing, what payers will require, what patients will be demanding, and how to stay on top of it all.
Key metrics like days in accounts receivable (DAR), claim denial rate, and net collection rate help you track where your healthcare organization could be underperforming compared to competitors. An RCM solution that includes a financial performance dashboard is an easy way to proactively address revenue challenges before they arise and can help your business identify new areas of potential growth.
4. Improve operational efficiency by streamlining workflows and reducing burden
In many respects, operational efficiency is the backbone to enhancing your RCM process. By setting goals towards achieving operational excellence, your healthcare organization can eliminate or outsource time-consuming administrative work, so you can free up resources to focus on patient care and patient volume. Streamlining processes and optimizing workflows can significantly reduce administrative overhead, minimize errors and redundancies, and accelerate cash flow.
Key areas where operational efficiency drives RCM success include front-end processes, such as registration, eligibility verification, and pre-authorization. And having standardized, digitized procedures in place minimizes delays and claim denials. Seamless integration of EHR, coding, and billing systems also enhances efficiency by eliminating coding errors, and manual data entry and reconciliation. On the back end, automated claim scrubbing, denial management protocols, and analytics-driven process improvements enhance operational efficiency. Workflow tools that prioritize outstanding accounts and automate patient billing and collections can further boost productivity.
Continuous efforts to remove administrative burden, reduce cycle times, and implement lean RCM processes yield significant operational gains, freeing up staff to focus on increasing patient satisfaction by supporting a smooth in-office experience.
athenahealth helps your organization succeed under any payment model
Our revenue cycle management solution is built to support practices of all sizes, from single physician practices to large healthcare organizations, equipping them with the software and services they need to effectively manage their RCM and practice management requirements. By choosing athenahealth's RCM solution, you're not just choosing a service provider; you're choosing a partner dedicated to your success—a partner who understands the intricacies of healthcare management and is committed to helping you optimize your operations, enhance patient care, and maximize financial performance.
RCM for value-based care
Value-based care models come with high complexity and few guarantees. For healthcare organizations to get the most returns, they must excel in everything from collaborating with other providers to integrating the systems required for reporting. If your business follows a value-based care model (VBC), athenahealth’s RCM solution can help you proactively gain actionable insights into care and diagnosis gaps at the moment of care. athenahealth helps you coordinate care and measure performance, with research and guidance support that we audit and submit on your behalf, so you’ll be able to track changes in quality program requirements to maximize revenue.
RCM for fee-for-service
With a fee-for-service model, your organization strives to maximize collections on services rendered while reducing administrative burden and overhead. athenahealth’s RCM solution helps practices with a fee-for-service model to simplify their medical billing workflow, while maintaining schedule density and getting you the information needed to make an accurate post-visit claim. We have over 30,000 rules in our billing rules engine to catch possible errors before claim submission7, minimizing denials and supporting a more efficient and precise payment process.
How athenahealth helps enterprise-scale customers to collect more, faster
With our revenue cycle management solution, healthcare organizations can maximize revenue, reduce administrative burden, and stay ahead of industry changes. We simplify revenue cycle work from the beginning stages at appointment scheduling, all the way to securing full payment. Robust benchmarking, reporting, and coaching within our RCM solution help empower practices to take control of their financial health, streamlining your revenue cycle and boosting your healthcare organization’s success. Here are some of the ways that we help healthcare organizations collect more of what’s owed, quickly and efficiently:
Efficient Scheduling: We start at the very beginning of the patient's journey with intuitive scheduling solutions that integrate seamlessly with the rest of the practice's operations, ensuring smooth patient flow and optimized appointment management
Advanced Billing Rules Engine: Our extensive billing rules engine is at the heart of our RCM offering. It's been engineered to help ensure that claims are more accurate from the outset, drastically reducing denials and the need for re-work.
Claims Creation and Management: With our sophisticated claims creation and management tools, we take the complexity out of this critical step. Our platform ensures that claims are processed efficiently and accurately, improving turnaround times and cash flow.
Denials Management: Our proactive approach to denials management helps identify potential issues before they result in denied claims. When denials do occur, our comprehensive review process makes resolution swift and straightforward, minimizing delays in payment.
Self-Pay Billing: Recognizing the growing importance of patient responsibility in healthcare payments, our self-pay billing solutions are designed to make this process as straightforward as possible for both practices and patients, enhancing satisfaction and improving collection rates.
Real-Time Connectivity: One of the most powerful aspects of our RCM solution is its real-time connectivity with our Clinicals and Patient Engagement platforms. This integration provides practices with unparalleled insights across the entire patient care spectrum—from scheduling and billing to patient engagement and clinical outcomes.
See how these athenahealth customers optimized their financial performance with our RCM solution
Consensus Health, comprised of New Jersey-based independent primary care and related specialty clinicians, provides administrative support to enable independent clinicians in New Jersey to focus on patient care while benefiting from organizational scale. Seeking to increase efficiency and growth, they partnered with athenahealth to drive operational efficiency and rapid growth.
By using athenaOne's integrated EHR, revenue cycle management, and analytics software and services, Consensus optimized billing, achieving top 25th percentile performance in accounts receivable metrics across their practices. As they took on more value-based contracts, they leveraged athenaOne data to track quality metrics in addition to financial metrics.
The cloud-based athenaOne platform allowed Consensus to rapidly onboard new practices with minimal manual work. This scalability enabled adding 63 new providers in 2 years and helped support their aggressive plans to add 100 more physicians within 18 months.
Consensus' investors value the efficiencies and data-driven insights facilitated by athenaOne. As COO Michael Lovett stated, "If you're going to grow exponentially and quickly, you need a scalable platform, and that's an advantage athena gives us."
StrideCare, a Texas-based podiatric group, transitioned all their practices onto athenahealth's athenaOne platform to enable scalable growth. They onboarded 15 practices in just a few months, capitalizing on reduced patient volumes during the pandemic.
The seamless data conversion and intuitive athenaOne system helped facilitate an efficient transition. StrideCare gained significant operational efficiencies, including increased electronic remittance from 90% to 99% and a nearly 100% improvement in A/R days.
athenahealth's clearinghouse and rules-based claim management allowed StrideCare to operate lean staffing levels as they rapidly expanded, adding 30+ providers yearly. Robust analytics helped provide denial visibility and identified financial opportunities missed by prior disjointed systems. StrideCare leaders cited athenaOne as critical for achieving their growth strategy while delivering high-quality, efficient care.
CenterPlace Health, a federally qualified health center in Florida, partnered with athenahealth to improve revenue cycle processes across their 7 clinics while maintaining compassionate, accessible care. As RCM Director Crystal Wolfe worked with athenahealth's Advisory Services team, together they analyzed workflows and developed staff training tailored to CenterPlace's values.
A key initiative was scripted patient communications to discuss payment options sensitively. This approach, along with automated claim scrubbing, led to a 42% increase in visit volume and over 124% growth in time-of-service collections in 12 months.
Leveraging athenaOne's reporting, CenterPlace gained visibility into key metrics to share with leadership and ensure community-focused mission delivery. The integrated solution empowered staff engagement and efficiency, allowing CenterPlace to serve more patients with fewer resources. Wolfe states, "With athenahealth, we've trained, empowered and given our teams confidence to do their jobs and serve our community to the greatest ability."
Maximizing your organization’s financial health with effective revenue cycle management
Effective revenue cycle management is vital for the financial health and operational success of large and enterprise-scale healthcare organizations. With reimbursement rates facing downward pressures and operating costs continuing to rise, healthcare providers must optimize their revenue cycle performance in order to succeed in today’s industry climate. RCM analytics provide crucial visibility into key metrics like denial rates, accounts receivable days, and time-of-service collections. This intelligence enables continuous process improvement and identification of revenue gaps.
In today's challenging healthcare landscape, organizations cannot afford to continue with inefficient, costly revenue cycle management. To make the most of your organization’s profitability, cash flow, patient satisfaction, and long-term sustainability, focus on an RCM partner that can do more.
To learn more about how athenahealth is helping healthcare organizations optimize their financial performance, take a look at our RCM solution.
12023 Physician Sentiment Survey, commissioned by athenahealth and fielded by Harris Poll, Jan 2024
2American Hospital Association, Costs of Caring Report, “The Financial Stability of America’s Hospitals and Health Systems Is at Risk as the Costs of Caring Continue to Rise”, April 2023; https://www.aha.org/costsofcaring
3Fierce Healthcare, “Payers’ increasing claims denials, delays ‘wreaking havoc’ on provider revenue cycles”, Dec 2023; https://www.fiercehealthcare.com/finance/payers-increasing-claims-denials-delays-wreaking-havoc-provider-revenue-cycles
4American Hospital Association, Report: Hospitals struggle to collect payments from commercial insurers, May 2023; https://www.aha.org/news/headline/2023-05-22-report-hospitals-struggle-collect-payments-commercial-insurers
5American Medical Association, “AMA releases the CPT 2024 code set”, Sep 2023; https://www.ama-assn.org/press-center/press-releases/ama-releases-cpt-2024-code-set
6Gartner, Jan. 2024, Market Guide for Revenue Cycle Management Software, pg no:7; https://www.gartner.com/document/5153231?ref=solrResearch&refval=397104950&; IS086
7Based on athenahealth data as of Apr. 2023; M017