The RCM landscape is poised for significant change as the healthcare industry continues to embrace new technologies.
The health care industry has undergone an incredible technological revolution in recent years. As we look ahead to 2024, it's evident that this progression will continue.
According to a report released by the Healthcare Financial Management Association (HFMA) and Eliciting Insights, a recent survey found that more than one-third of health system executives are planning to automate two or more revenue cycle management (RCM) or finance functions in 2024.
- Back-end RCM is the highest automation priority with 40% of respondents planning to invest, followed by patient access (37%) and mid-revenue cycle (32%).
- Top RCM priorities cited by survey respondents include prior authorization (39%), denials/appeals management (37%) and patient self-service/digital front door (37%).
Here are some other revenue cycle trends to watch in 2024 that are reshaping the healthcare industry, enhancing revenue cycle management processes, and ultimately improving patient outcomes.
All About AI
Generative AI has emerged as a groundbreaking innovation that surpasses any previous wave of technological advancements, presenting the health care industry with a multitude of potential solutions to its complex challenges.
The integration of artificial intelligence (AI) and automation is transforming the landscape of revenue cycle management. With the ability to process vast amounts of data quickly, AI algorithms are revolutionizing tasks like patient registration, eligibility verification, and claims management, making them more efficient and accurate. Additionally, predictive analytics, a key aspect of AI, can forecast late payments and identify trends that may lead to claim denials, empowering healthcare providers to proactively address issues and enhance revenue integrity.
With ongoing debates within the industry regarding the promises and risks of artificial intelligence in healthcare, patients are increasingly optimistic about the potential of generative AI to enhance access and potentially reduce healthcare costs. Simultaneously, there are still patients and executives who maintain a sense of caution regarding security and privacy issues. Protecting patient privacy and ensuring data security throughout the AI workflow is crucial, considering the sensitive nature of patient data and the strict regulations, such as HIPAA, that govern its use.
The Office of the National Coordinator for Health Information Technology (ONC) has recently finalized a new rule that focuses on promoting responsible AI in certified health IT. This rule establishes transparency requirements for AI and other predictive algorithms, ensuring that clinical users have access to essential information about the algorithms they utilize to drive decision-making. By providing this baseline set of information, the ONC aims to assess the algorithms for their fairness, appropriateness, validity, effectiveness, and safety.
However, despite the current low adoption rate of generative AI solutions in healthcare organizations, it is anticipated that the number will significantly increase in the coming year. A recent report from KLAS reveals that 58% of healthcare executives express their intention to implement or acquire a generative AI solution within the next year.
Increased Scrutiny of Denials Management
The payer/provider relationship in 2023 has become increasingly strained, leaving providers feeling trapped amidst ever-changing payer requirements and the constant stream of denials. These denials have a significant impact on healthcare revenue, prompting organizations to prioritize denial management.
What can providers do? To combat this issue, they are turning to AI and data analytics to identify the root causes of denials and develop effective prevention strategies. Additionally, they are enhancing their appeal processes to successfully recover revenue in the event of denials.
In order to overcome the challenges of denials and improve revenue, providers are increasingly turning to automation technology, specifically Robotic Process Automation (RPA). RPA is a powerful tool that mimics human behavior through rules-based actions, allowing it to perform transactions and complete repetitive processes without the need for human intervention. By implementing RPA, providers can eliminate manual tasks and reduce errors. This not only helps reduce denials but also streamlines operations without the need to hire additional staff.
Leveraging the Power of Data
Healthcare providers can leverage the power of data analytics to pinpoint areas of enhancement within their current RCM processes, gaining valuable insights into their financial operations and identifying areas in need of improvement. With data analytics, providers can uncover trends, identify bottlenecks, and take a proactive and strategic approach to managing the revenue cycle. Additionally, data analytic tools allow providers to enhance the patient experience by using satisfaction surveys and responses to make improvements.
Navigating Regulatory Compliance
Throughout 2023, hospitals faced numerous regulatory hurdles, with one of the most prominent being the struggle to achieve compliance with the CMS's price transparency rule. Despite being in place for nearly two years, there is still a lack of consistency and completeness in the information that has been posted. While compliance remains a challenge, hospitals can use this challenge as an opportunity to increase their efforts on revenue cycle initiatives that support price transparency, streamline patient collections, and make it easier for patients to pay.
The implementation of the No Surprises Act has also posed a considerable challenge, resulting in a backlog of payments due to the overwhelming number of claims undergoing dispute resolution. To address the concerns and challenges raised by stakeholders, the departments of Health and Human Services, Labor, and the Treasury have proposed a new rule aimed at enhancing the functionality of the independent dispute resolution process under the No Surprises Act. This proposed rule, which allows for a 60-day public comment period, introduces various requirements for plans when it comes to payment denials. These requirements include the inclusion of claim adjustment reason codes and remittance advice remark codes, as well as other relevant information, in the initial payment or notice of payment denial for specific items and services protected under the No Surprises Act.
The proposed rule introduces changes to the way items and services are batched for payment determination. Under the new requirements, items and services can be batched together if they meet certain criteria. These criteria include being furnished to a single patient on consecutive dates of service and being billed on the same claim form. Additionally, items and services can be batched if they are billed under the same service code or a comparable code from a different procedural code system. This rule also applies to anesthesiology, radiology, pathology, and laboratory items and services that are billed under service codes belonging to the same Category I CPT code section, as specified in the agencies' guidance.
One effective solution to address these challenges is the implementation of patient responsibility estimations. This technology provides both healthcare providers and patients with a comprehensive understanding of the total amount owed for medical services. By enabling a more productive financial conversation between providers and patients, it empowers individuals to make well-informed decisions regarding their healthcare expenses. Ultimately, this initiative contributes to the overarching goal of enhancing price transparency while healthcare organizations continue their efforts to achieve full compliance with regulatory requirements.
Increased Oversight of LDTs by the FDA
The U.S. Food and Drug Administration (FDA) proposed rule to enhance oversight of laboratory-developed tests (LDTs) has the potential to bring significant changes to the clinical laboratory industry and patient care. This proposal includes a gradual implementation of stricter regulations for lab tests over a span of five years.
The American Clinical Laboratory Association (ACLA) expressed its concerns to the FDA in a letter, urging the agency to reconsider its proposed rule on LDTs. In their comments, the ACLA emphasized that the proposed rule significantly underestimates the costs of implementation while overestimating the benefits it claims to bring. The ACLA believes that the FDA's proposal fails to acknowledge the existing comprehensive regulations and assessments already in place for LDTs, as well as the crucial role these tests play in healthcare delivery. The FDA’s proposed rule fails to recognize the essential role that LDTs play in health care delivery and the already significant federal and state regulation and assessment of LDTs. In fact, laboratories and the LDTs they offer are subject to robust regulation under federal and state statutes, supplemented by rigorous accreditation standards and review by payers.
The American Hospital Association (AHA) also voiced its concerns to the administration, urging them to reconsider the application of device regulations to hospital and health system laboratory developed tests. According to the AHA, the proposed rule lacks specificity, is overly broad, and has the potential to impose significant burdens and costs on hospitals. Furthermore, the AHA believes that such regulations may hinder innovation and compromise hospitals' ability to deliver effective and appropriate care to patients.
As stated in a plan outlined by the Office of Management and Budget (OMB), the FDA is working towards completing the proposed rulemaking on LDTs by April 2024.
Join us for "Dissecting the FDA's Proposed Rule Governing LDTs & Its Effect on Laboratories” webinar with Keynote speaker Christine P. Bump, Principal, and Founder of Penn Avenue Law & Policy who will provide a comprehensive understanding of the proposed changes to 21 C.F.R. Part 809 and their potential impact on laboratories. Register here.
PAMA Reporting Postponed Again in the Search for a Lasting Solution
Labs were granted a respite from the imminent cuts to the Clinical Lab Fee Schedule (CLFS) when the reporting and reimbursement reductions associated with the Protecting Access to Medicare Act (PAMA) were postponed until 2025. This delay, made possible by the passage of a short-term government funding bill, marks the fifth time Congress has taken action to defer PAMA cuts and reporting. Without this temporary measure, numerous CLFS tests would have faced reductions of up to 15% in January, and labs would have been required to report new data from private payers. If the reporting requirements under the act are reinstated in their current form, laboratories will need to submit the private payer data they collected between January and June 2019.
Empowering Patients with Personalized Payment Solutions
In today's healthcare landscape, patients are demanding greater transparency and convenience when it comes to their medical bills. This shift is prompting healthcare providers to enhance the financial experience for patients. To meet these expectations, organizations are embracing digital tools that offer real-time cost estimates, online billing options, and flexible payment plans. These solutions not only improve patient satisfaction but also have a positive impact on revenue. By providing upfront cost information and simplifying the payment process, healthcare providers are making it easier than ever for patients to settle their bills.
In an effort to prioritize patient retention, healthcare providers are revolutionizing the payment process by adopting patient-centric approaches. Instead of applying a one-size-fits-all approach to payments, providers are now crafting personalized payment solutions. Moreover, they are enhancing convenience by implementing systems that allow patients to make payments through email and text messaging. By embracing these innovative payment methods, providers are not only improving patient satisfaction but also streamlining revenue collection.
Furthermore, it's important to note that the preference for mobile payments extends beyond just the younger generations. According to a recent survey by YouGov, a staggering 70% of individuals aged 55 and older are comfortable with paying their bills online, often via email. This statistic highlights the growing acceptance and adoption of digital payment methods among various age groups. In fact, research also indicates that 42% of patients between the ages of 18 and 34 prefer utilizing text messaging for making payments, suggesting that this method may eventually surpass even email payments in popularity.
Revenue cycle solutions that analyze patient payment history and determine which patients may need custom plans also help providers retain their patients. Providers will be leaning on this analytical side of their revenue cycle technology to keep patients in their system and capture the most revenue.
Overall, providers who reduce the friction involved in the patient experience and make it easier to do business with them have better chances of filling schedules, reducing no-show rates, minimizing care gaps, and increasing patient satisfaction and ultimately revenue.
With RCM systems playing a vital role in managing sensitive patient data, prioritizing cybersecurity is crucial. Healthcare organizations must take proactive measures to protect this data from the ever-evolving landscape of cyber threats. This involves implementing state-of-the-art encryption, multi-factor authentication, and robust intrusion detection systems. Additionally, providers may also consider investing in cybersecurity training for their staff to prevent any unintentional breaches.
The 2024 Health System Digital & IT Investment Trends report indicates that more than 85% of health systems are increasing their 2024 digital and IT budgets, and almost half project moderate to significant increases. Top investment priorities include cybersecurity (55%), electronic health record modernization (46%), digital care (32%) and advanced analytics, AI and machine learning (31%).
In response to the recent surge in cyberattacks targeting hospitals and health systems, the US Department of Health and Human Services (HHS) has unveiled a comprehensive plan aimed at enhancing cybersecurity measures and fortifying digital defenses. The department's strategy includes offering financial incentives to hospitals that adopt industry best practices and setting clear cybersecurity performance goals to assist healthcare providers in prioritizing the necessary steps to safeguard their digital systems. These proactive measures will help hospitals "lock their digital doors" and ensure the protection of sensitive patient data.
Workforce Challenges: Addressing Labor Shortages in Healthcare
The healthcare industry is projected to experience a shortage of qualified staff, with the number of healthcare professionals estimated to decrease from 18 million in 2016 to potentially drop to 10 million by 2030. This shortage poses significant challenges in meeting the growing demands of patient care.
Furthermore, this shortage underscores the significance of a collaborative approach between healthcare providers and financial teams in devising a holistic plan to tackle the staffing challenges. An innovative solution to overcome this hurdle involves embracing artificial intelligence (AI) to streamline and automate revenue cycle procedures that have traditionally relied on manual processes, which are prone to errors. By harnessing the power of AI technology, healthcare organizations can maximize their workforce productivity, enhance cash flow, and reduce the time it takes to receive payment, all while eliminating the need for additional staff. This ultimately guarantees that high-quality patient care is delivered without any compromise.
While financial challenges will likely persist for health organizations in 2024, the future of RCM is filled with promise as these emerging trends pave the way for a more streamlined, efficient, and patient-centered approach to managing healthcare revenue. By staying up-to-date with these trends, providers can ensure they are utilizing the best tools and strategies to improve their revenue cycle processes and achieve better results.
When you partner with Quadax, you can overcome these challenges with ease. Harness the power of our comprehensive suite of revenue cycle management and clearinghouse services to streamline your processes and boost your financial standing. Discover how Quadax can empower you to achieve success by scheduling a strategic call today!