For the Record: Rev Cycling to a Better Bottom Line
“Measuring every touch in the revenue cycle is key to future sustainability—because every touch means money out of your pocket.” ~ Matt Seefeld
Fall 2024 Issue
Rev Cycling to a Better Bottom Line
By Selena Chavis
For The Record
Vol. 36 No. 4 P. 20
Reducing the cost to collect is paramount for all health care organizations against all these macroeconomic challenges. When it comes to reducing costs, one of the few things health care leaders have control over today is their labor. This is why measuring every touch in the revenue cycle is key to future sustainability—because every touch means money out of your pocket.
Financial resiliency in today’s health care organizations and technology adoption are intrinsically linked. That’s what health care executives increasingly acknowledge as they consider how to position for success going forward.
A recent Akasa report found that “74% of health systems and hospitals have automation in their revenue cycle; 46% of these same organizations use some form of AI.” And while financial leaders may be fatigued by the ongoing onslaught of topics related to artificial intelligence (AI) and automation, the reality is that forward-thinking health care organizations are finally joining the movement after decades of slogging through manual processes.
Jody Yarbrough, CFO of Arizona-based El Rio Health, says commitment to ongoing process improvements is a health system’s best strategy for financial resiliency. “Revenue cycle work is very challenging in the best environments; to be successful, you’ve got to continually evaluate the effectiveness and efficiency of your processes, your team’s understanding of the way things should work and their skillsets, so that the organization marches forward each day,” she says.
Process improvement in revenue cycle extends beyond considerations for bottom line impact. It touches many areas including staff burnout and patient experience, according to Andy Adams, managing director of advisory services and performance improvement at Nordic. “Often, a revenue cycle team member will support one of the first interactions a patient will have with a health system, and revenue cycle may have one of the last interactions, too, during final adjudication of the patient account,” he says, emphasizing that those first and last interactions are incredibly important. “Revenue cycle leaders must recognize the importance of a very patient-centered process throughout—customer service is a top priority.”
Razor-thin operational margins have upped the ante on how health care executives prioritize the effectiveness and quality of revenue cycle processes. According to Matt Seefeld, chief commercial officer and executive vice president with MedEvolve, health care organizations are facing a perfect storm of reimbursement challenges associated with declining reimbursements, higher costs, and another ongoing issue: staffing shortages in the billing department.
“Reducing the cost to collect is paramount for all health care organizations against all these macroeconomic challenges,” Seefeld says. “When it comes to reducing costs, one of the few things health care leaders have control over today is their labor. This is why measuring every touch in the revenue cycle is key to future sustainability—because every touch means money out of your pocket.”
Adams agrees, noting that labor costs associated with revenue cycle departments are on the rise. “Revenue cycle leaders are competing for talent with jobs outside of health care they never thought they’d be competing against, so recruiting and retaining top talent has become more challenging,” he says, pointing out that workflow efficiencies are more important than ever. “So, the question becomes how can you automate and use AI tools to drive efficiency, allowing staff to focus on higher value tasks by taking away some of the repetitive tasks?”
Adams adds that the push and pull of trying to operate in both fee-for-service and value-based reimbursement models makes revenue cycle strategies even trickier. Financial leaders now have to keep their eye on the on the ball as it relates to revenue cycle operations while also preparing for and managing new value-based care arrangements that contribute to important revenue streams.
Seefeld notes that health care organizations are also seeing payers change their behaviors. In general, claims denials are on the rise, and he cautions that the industry can expect payers to adopt advanced technology to identify claims issues and speed denials in the same way that provider organizations are using it to speed revenue cycle.
“Any revenue cycle leader will tell you it’s just getting harder to get paid by insurance companies. That’s because they’re running AI models, right? Those models are denying your claim, and they are only getting smarter,” Seefeld says. “You have companies trying to build AI to make providers smarter, and you have payers building AI to make the payer side smarter. And the question is: Who’s going to win the race?”
The first step toward strengthening financial resiliency, according to Adams, is maximizing the efficiency of an existing workforce by embracing the advanced technology that’s available in the market. He adds that Nordic often finds that health care organizations are underutilizing existing technology, even that which is already implemented.
“Existing EMRs and other revenue cycle software applications may support automation that is not being used. Advancements and new automations may be included with each upgrade, but taking advantage of the new functionality requires intention and focus,” Adams says. “The first step is to drive efficiency by optimizing the technology tools that are already in place.”
Maximizing existing tools is important, but Seefeld observes that many EMRs and practice management systems lack the capacity to collect data that can help health care organizations get in front of the workforce and workflow efficiency issues. “We believe that if you can measure people and understand all the touches and actions that go into collecting medical claims after a service has been rendered, you can start to diagnose the ‘why.’ And that’s really important, right?” Seefeld says. “With these deeper insights, I know where in the process all the humans are getting involved, and therefore I can start to figure out ways to automate work and reduce manual effort.”
Seefeld says the missing piece from most systems is human-generated data. Health care organizations are adopting AI and automation in the revenue cycle but only applying it to common data sets, such as those which show a claim status or denial. “Without visibility into data related to workforce effectiveness, financial leaders have no way of measuring the quality and number of staff touchpoints as they engage with claims.”
Michigan-based Compass Health, an independent multispecialty medical group with nearly a dozen ambulatory locations, recently deployed an infrastructure that would support applying automation and AI to both common claims data and human-generated data with notable results. The organization was able to reduce its administrative staff needs by two full-time employees and realize a total increase in accounts receivable of greater than $1.2 million. According to Sandra Holdorf, revenue cycle manager for Compass Health’s central billing office, other key improvements include a reduction in cases with denials by 18% over a six-month period and total denied reimbursement by 28%, an increase in charges by 34% (> $5.4 million) and payments by 4%, and an increase in net collection rate by 1.3%.
“Getting the insights into issues like denials for authorizations, or why payment processing was taking longer than expected, was a nuisance,” Holdorf recalls. “We couldn’t get the information we needed in a way that would make some of the underlying causes of issues clear. Our [existing] system was fine for clinical stuff, but for back-end billing, it proved inadequate for our needs.”
Holdorf says they can now more easily manage data from multiple practice locations, stay ahead of health plan changes—especially those related to prior authorizations—automate workflows and gain insights into staff productivity.
Compass Health’s success goes back to the principles of total actions to outcome, Seefeld emphasizes. “If you have claims that have already been worked two times, five times, 10 times, they have probably been touched by multiple staff resources and most of those touches were wasted effort,” he says. “All that back and forth is costing money, and it’s eating away at your margin. In today’s financial climate, provider organizations need to ask: Can we afford to have a lot of erroneous touches going on in medical claims? No, we can’t.”
Adams notes that automation promises to improve multiple areas of the revenue cycle. For example, many organizations are turning to advanced technology to automate highly manual back-office billing and payment processes. The key is designing and deploying these solutions correctly and having strong ongoing governance processes in place.
Any highly repeatable or predictable process in the revenue cycle is ripe for automation, Adams adds. For example, many health systems have applied automation to the clearest opportunity areas such as claims submission, claim status, or payment posting to improve efficiency.
“Revenue cycle leaders are now looking for ways to automate more complex front-end processes including eligibility, benefits, and authorization,” Adams notes. “These areas are harder because third-party payers are involved. A willing partner is required on the other end.”
Financial clearance solutions exist, according to Seefeld, that can automate the preregistration process—covering all the steps a health care organization should take prior to a patient encounter. The purpose is twofold: to ensure the patients are aware and accountable for any balance owed (past, present, or future), and that all the necessary information is collected and verified up front to help ensure claims are not denied and reimbursement is timely.
Improving price transparency and helping patients understand balances owed through effective financial clearance strategies can support patient-centered revenue cycle designs. Adams points out that there’s also a lot of the focus on intuitive technology to support “self-service and delighting the patient by making it easy to complete a task.” He recommends a book—Designing for Health—by Craig Joseph, MD, Nordic’s chief medical officer, as a good starting point for patient-centered design.
“I really like the concept of designing processes in health care that are just simple and intuitive, ignoring the complexities happening in the background,” Adams says.
“AI in the revenue cycle has received more recent attention, going beyond automation, but there haven’t been as many proven applications yet,” Adams suggests. “We are starting to see some interesting applications in the coding and clinical documentation spaces with solutions that can help speed coding activities and improve documentation by providing recommendations to coders, CDI staff, and clinicians,” he says.
Yarbrough emphasizes that great leadership and collaboration are essential to financial resiliency success. “The revenue cycle process and team are dependent to the nth degree on the system and the IT team. Without reliance on this key group, a lot of work would not be accomplished, and the organization would suffer as a result,” she explains. “The collaboration between the CFO and CIO is critical to the organization’s shared goal of optimizing revenue and cash flow so that El Rio not only continues in but expands upon its mission.”
Adams agrees, noting that both the CIO and CFO roles have evolved over time, becoming much more strategic in nature. “The CFO is no longer heavily focused on getting the books closed and reporting financial performance. And the CIO is not just worried about implementing new technology,” he says. “Both of the roles have important seats at the table when it comes to setting the strategy for an organization and then executing on that strategy.”
This means the CIO and CFO must work hand-in-hand to execute on strategy since one holds the purse strings, and IT projects typically require significant investment. Adams adds that these two leaders, in particular, must put into place good governance structures to help guide investment strategy as that helps provider organizations speed implementation of impactful projects.
“From an innovation perspective, it’s also important that leaders set the tone at the top, because their teams need to work closely together,” Adams says, adding that this is where a third-party can help when there’s lack of collaboration and trust. “In an organization where operations and IT teams are tightly aligned and collaborative, there’s a shared understanding and less friction, which just makes things happen faster and easier—and probably at a lower cost.”
Matt Seefeld, Executive Vice President & Chief Commercial Officer at MedEvolve, brings over 24 years of management consulting experience in the healthcare industry. He has extensive expertise in the assessment, design and implementation of process improvement programs and technology development across the entire revenue cycle. Matt began his career with Stockamp & Associates, Inc. and worked for both PricewaterhouseCoopers LLP and Deloitte Consulting LLP in their healthcare and life sciences practice lines. In 2007, he developed a business intelligence solution and founded Interpoint Partners, LLC, where he served as Chairman and Chief Executive Officer. In 2011, he sold his business to Streamline Health Solutions where he then served as Chief Strategist of Revenue Cycle followed by Senior Vice President of Solutions Strategy until 2014. Matt ran global sales for NantHealth and provided consulting services for healthcare technology and service businesses nationwide, prior to joining MedEvolve full-time.
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