Is Lack of RCM Automation Putting Your Revenue At Risk?

June 03, 2021 By: Quadax

Labs, hospitals and healthcare systems need a resilient revenue cycle not susceptible to disruptions.

The healthcare industry is constantly undergoing change from various drivers, including payer policy updates, new legislation, and volume-to-value payment transitions. Keeping abreast of important information coming from so many different directions is challenging. A complicating factor for many organizations is that on top of the constant wave of required updating of systems to accommodate change, claims never stop. If there is any hiccup in the billing process, revenue could be at risk.

A goal for every lab, hospital and healthcare system is to build a resilient revenue cycle that can bring in a steady revenue stream and is not susceptible to disruptions. With all its moving parts, achieving revenue cycle resilience can seem like a tall order, but it is possible to achieve by mitigating factors that cause inefficiencies.

Automation, for example, can have a profound effect on claims cycle efficiency. Manual, repetitive tasks are tedious, time-consuming, and subject to human error – making them prime candidates for automation. The reasons to automate go a bit deeper, however. A challenging labor pool and the high cost of manual tasks are two compelling reasons to look at automating your claims cycle.

Reason #1: Challenging labor pool
There was a time when medical billing was little more than filling in claim forms and mailing them to payers. The skills required for effective and efficient billing staff have changed dramatically in the last two decades. Today, billers need technology skills, critical thinking skills, and the ability to prioritize work – in a tight labor pool, finding these qualities can feel like trying to find a needle in a haystack. Even before COVID, anecdotal evidence indicated that finding experienced billers for labs, hospitals, and health systems was challenging.

Also problematic is a high turnover rate, which can be especially damaging to healthcare in two ways:

  • Losses in billing productivity directly correlate to drops in revenue.
  • Losses in institutional knowledge result in higher denial rates and slower denial resolutions.

According to the MGMA, the average turnover rate for business operations support staff is almost 10%. Front office support staff (which is critical to collecting correct patient information for billing) averages 20%. The MGMA comments that for small practices in particular, “a 20 percent turnover rate could cripple a practice’s progress toward practice transformation and value-based goals.” In addition to the high cost of hiring, new employees on learning curves often make mistakes, which is more difficult to quantify, but human error certainly adds up.

Reason #2: High labor costs
Many organizations understand that automating can lower labor costs, but few realize the significance of savings. According to the CAQH, there is a noteworthy cost differential between manual labor and automation for essential billing functions.

Transaction Provider cost per
manual transaction
Provider savings opportunity with automation
Eligibility and benefit verification $5.83 $5.01
Prior authorization $10.26 $6.62
Attachments $5.10 $3.60
Claim status inquiry $9.37 $8.27
Remittance advice $3.96 $3.02


The most substantial savings are for claims status inquiries – almost $8.27 per transaction can be saved by automating. On average, medical billers and coders make between $25 - $30 per hour. In other words, three manual claims status inquiries equal about one hour of labor. It’s easy to calculate how quickly manual tasks of almost any type can wipe out profitability.

Choosing an automation partner
There are many products on the market to help you automate, but how do you decide which is the best fit for your organization? Finding the answers to these four questions will help point you in the right direction.

    1. Does the automation solution integrate with your EMR and billing applications?
    2. Does the solution have experience in your specialty?
    3. Can the solution be customized?
    4. Is there reliable, expert, personal support when you call?

If the answer is no to any of the above questions, keep looking. Look to industry reputation as another point of evaluation. For example, Quadax Claims Management Xpeditor™ was named Best in KLAS for Claims Management. Xpeditor streamlines and automates claims submission and follow-up workflow according to customized parameters. The Quadax first-pass acceptance rate is 99.6%, drastically reducing the need for manual corrections, an essential component of building resilience and preserving profitability.

Learn more about Best Practices to Create Revenue Cycle Resiliency in our white paper here.  Interested in learning how Quadax can help you automate your claims cycle? Contact us today.

Let’s Take On The Revenue Cycle Together! 


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