How automation can benefit healthcare revenue cycle management

The paper-based healthcare revenue cycle — with the added elements of insurance verification, claims reviews and denial appeals — has traditionally hindered efficient treasury management for providers ranging from physician groups to large hospital systems. But treasury professionals at these organizations are starting to automate revenue cycle processes to achieve an array of efficiency and other benefits.

The effort to digitize the flow of information from the initial patient encounter to final payment resolution has been aided by the emergence of powerful banking tools. In this evolving landscape of revenue cycle management in healthcare, automation is critical for improving operations efficiency and patient satisfaction.

Automating payment posting and more

For example, a comprehensive receivables solution ddesigned for healthcare revenue cycle management allows providers to automate payment posting and reconciliation. Revenue cycle process management and automation offers a consolidated view of all remittance and payment information both from patients and insurers.

“A comprehensive receivables service also reconciles payments that are made electronically,” notes Meghan Wilmes, senior vice president and group product manager, healthcare, at U.S. Bank. “So, if an insurance company pays via ACH and sends an electronic remittance advice, the service will reassociate all of the claim data with the dollars being paid, allowing the provider to see the full reconciliation picture.”

A comprehensive healthcare receivables service will be able to convert all claim payments, both paper and electronic, into an industry-standard 835 file, which can auto-post to the provider’s practice management system. “Ultimately, this type of bank service automates posting, gives providers more visibility into incoming claim payments, supports research and trends on denials, and assists with simplifying correspondence workflows,” Wilmes says.

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One step at a time

A large integrated healthcare system in the Mid-Atlantic region has adopted a comprehensive healthcare receivables service from U.S. Bank to initially target a particular pain point in its revenue cycle — the processing of correspondence from insurers, such as denial letters and requests for additional information, that was being sent separate from payments to the organization’s central office.

Responding to such paper correspondence had been an arduous manual healthcare revenue cycle process taking up significant staff time, and the provider was experiencing a major processing backlog.

With the U.S. Bank service, payer correspondence at the healthcare system now gets image-captured, categorized and routed into appropriate queues that staff can access online, which dramatically speeds processing of those documents and has eliminated the backlog. Additionally, the organization is now able to automatically post 75% of its payments that come into its payer lockbox, allowing staff to focus on other tasks such as researching exception items.  

As a next step, the healthcare system is now considering expanding its use of revenue cycle automation to manage patient payments received via the lockbox.

A slew of benefits

For many providers, digitizing healthcare revenue cycle management improves productivity, reduces costs and enhances the patient experience – including enabling up-to-date balances and payment information. By adopting front-end tools that support multiple electronic payment methods at both the point of care and online after the visit, providers can give patients the payment options they have become accustomed to in the retail world, which enhances their healthcare experience.

Meanwhile, implementing automated revenue cycle management reduces days in accounts receivable, boosts employee satisfaction by reducing manual tasks, and further improves the patient experience by supporting more timely responses to customer service inquiries. 

At a time when market and economic volatility have intensified the focus on effective liquidity management, digitizing the healthcare revenue cycle can help.

Improving liquidity management

Maximizing visibility to cash is a major focus of corporate liquidity management these days — and particularly challenging in healthcare. It can take weeks and even months from the initial patient visit until the determination of patient responsibility and for both patient and payer payments to be delivered to the provider and posted to its accounting system. The inability to apply receivables leads to trapped, unusable cash.

“When the method of processing claim payments was largely manual, there were a number of things providers wouldn’t have visibility into without picking up the phone and calling the insurance company or doing some extensive research,” Wilmes explains. “For instance, has the claim been submitted? Was it submitted accurately? What is its status? Has it been paid? Has it been denied?”

However, with today’s digital tools, providers can significantly improve visibility to cash while bolstering their healthcare revenue cycle management.

“Automation in revenue cycle management accelerates the flow of cash data into forecasting tools, enabling more timely and informed liquidity management,” explains Jessica Schopp, Head of Healthcare Product and Technical Sales for U.S. Bank Treasury and Payment Solutions, who works extensively with healthcare organizations. “Not only do they get that working capital available to them sooner, but they also receive the data faster to help them make better investment and borrowing decisions.”

Time to finish the job?

Many healthcare providers have started their journey toward revenue cycle management automation, but Schopp says there is still work to be done to fully realize the benefits. Typical speed bumps include some patients’ hesitance about using digital payment methods, as well as the need to comply with federal regulations designed to protect patient health information.

 Wherever you are on your journey toward automated revenue cycle management, contact a knowledgeable banker to learn about helpful tools that can enable you to accelerate the process.