Providing exceptional patient care is healthcare providers’ first priority. But how much and how quickly they get paid is also vital to an organization’s success. And with ongoing payment reform and industry changes, properly managing revenue is becoming more challenging than ever.
Often, the common underlying cause of declining reimbursements and shrinking profitability lurks in outdated revenue cycle processes, such as waiting for a revenue-negative event to take action and failing to keep up with changing payer rules and fee schedules.
In addition, declining reimbursements, continually changing payer rules, poor patient collections, regulatory requirements and value-based payment models can make it tough for your organization to grow profitably and/or stay independent. The coming transition to ICD-10 could also take a financial toll on unprepared practices.
Ultimately, delivering the best care while managing revenue cycle complexities is a very delicate balance — one that can determine your organization’s future. Greenway Health’s clinically driven revenue cycle management™ (RCM) services can streamline clinical, operational and financial processes for optimal financial performance.
Medicare eligible professionals (EPs) who are not meaningful users are subject to payment adjustments beginning on Jan. 1, 2015. The payment reduction is 1 percent per year and is cumulative for every year that an EP fails to attest.
Beginning in 2018, the Secretary for Health and Human Services has the authority to increase these penalties if the percentage of physicians who are meaningful users is less than 75 percent, with a maximum reduction cap of 5 percent.
While the initial penalty may seem small, ongoing payment penalties for multiple providers can cause providers major revenue issues.
The rise of consumer-driven healthcare has the potential to hurt healthcare organizations’ revenue cycles because patients tend to be harder to collect from than payers. According to the National Business Group on Health, in 2015 nearly a third of large employers offered only high-deductible plans, compared to 22% in 2014 and 10% in 2010.
Greenway Health recommends that practices examine their patient collection methods to determine gaps and adjust their workflows accordingly. For example, front desk staff should be trained to always collect copays so that money is not lost after the patient walks out the door.
Maintaining profitability is challenging for healthcare providers because reimbursements continue to decline as payment hurdles grow, and revenue streams and billing practices have not adapted. This means many practices face increasing payer requirements at a time when they have fewer internal resources to work denials.
Simultaneously, operating expenses continue to escalate, which is driven largely by increased staffing and IT costs. To stay profitable, practices must look at areas where they can decrease their costs and increase reimbursements.
There was an influx of 30 million newly insured patients into the healthcare system in 2014 due to the ACA. Providers have seen an increase in patient volume due to the rise in insured patients. This results in a short-term boost to medical revenue based on a fee-for-service model. However, it is unclear whether the medical field will be able to handle this increase in the long run since there is already a shortage of skilled medical providers.
The Affordable Care Act also led to an increase in High Deductible Health Plans (HDHP). HDHPS often hurt a practice’s revenue cycle, because collecting payments from patients tends to be harder than collecting from insurance companies and other payers.
Value-based payment means the amount practices are paid is tied to the quality of care a practice delivers instead of the traditional model of being paid by number of visits and tests performed (called fee-for-service). The purpose of value-based payment models is for practices to deliver better care at a lower cost.
For providers who cannot meet certain requirements of the model, this could result in financial penalties or lower reimbursements that can create a significant financial burden. Alternatively, if a practice is able to meet the all the standards, then value-based payment models can increase their revenue.