How automation can benefit healthcare revenue cycle management

February 15, 2024

Healthcare revenue cycle management is critical to healthcare operations. Learn how to automate and optimize the revenue cycle with our receivable’s solutions.

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.

Automating payment posting and more

For example, a comprehensive receivables solution designed for healthcare revenue cycle management can allow providers to automate the posting of traditional paper payments. 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.

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 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 company is considering adopting the service to achieve similar benefits when managing the payments coming into its patient pay lockbox.

A slew of benefits

For many providers, digitizing the revenue cycle begins with offering more electronic payment options. 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, automating the posting of payments increases productivity and cost savings, 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 revenue cycle can help on that front as well.

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 optimizing their healthcare revenue cycle.

“By automating cash application and reconciliation, providers can funnel data into their cash forecasting systems faster,” explains Dan Haber, a working capital consultant at U.S. Bank. “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 at least started automating their revenue cycle, but most have more work to do, Haber says. 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 digitizing the revenue cycle, contact a knowledgeable banker to learn about helpful tools that can enable you to accelerate the process.

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