The healthcare industry is constantly evolving, and one area where this is especially apparent is revenue cycle management (RCM). As we head further into 2024, healthcare leaders and revenue cycle teams need to be aware of emerging revenue cycle management trends.
This awareness helps healthcare teams adapt their strategies to maintain financial stability and deliver quality patient care. From innovative technological advancements to shifts in patient expectations, understanding and addressing these revenue cycle management trends is crucial for success in today’s complex healthcare landscape.
Whether you're a seasoned healthcare executive, a revenue cycle specialist, or new to the field, staying ahead of the curve is essential for success.
7 Key Revenue Cycle Management Trends Shaping the Future of Healthcare
Let's take a closer look at some of the significant revenue cycle management trends that demand attention. Understanding these trends offers a roadmap to not just survive, but to thrive amidst a changing industry.
1. Embracing AI and Automation
Artificial intelligence (AI) and automation are rapidly transforming the healthcare landscape, especially within revenue cycle management. Healthcare organizations must contend with vast amounts of data, and these technologies provide much-needed relief.
About 80% of healthcare executives are increasing spending on IT and software due to the rise of AI technologies, including AI-based tools like generative AI. These powerful tools help healthcare providers improve efficiency, optimize workflows, and minimize errors. They are particularly helpful in areas like:
- Patient registration and eligibility verification.
- Claims processing.
- Denials management.
- Payment posting.
Many organizations use AI to improve efficiency. However, integrating AI across the entire revenue cycle, from patient scheduling through final payment, creates a more holistic, patient-centric approach, leading to a better patient experience.
2. The Rise of Value-Based Care Models
There is a noticeable shift from traditional fee-for-service models to value-based care models. This impacts reimbursement and forces providers to adapt to new payment structures. Although adoption is slow, McKinsey projects this trend to continue for the next five years.
Revenue cycle management is closely tied to reimbursement. Adapting strategies to accommodate this changing landscape is crucial and requires a few things. These include:
- Focusing on quality metrics and patient outcomes.
- Encouraging stronger provider-payer collaboration.
- And providing the ability to track and report performance data effectively.
As value-based care gains prominence, RCM must align with these principles. It puts patient outcomes at the forefront of the healthcare ecosystem, signifying a move from a quantity-driven to a quality-driven model. The good news is that as we make this shift, patients also benefit.
3. Persistent Staffing Shortages and Rising Labor Costs
Even though hospital margins have started to rebound, staffing shortages and labor costs continue to put a strain on the healthcare industry. Contract labor costs have seen a significant spike of nearly 258% over the past four years. This burden is forcing many health systems to seek external help from revenue cycle management providers.
Revenue cycle leaders can take advantage of outsourced RCM services to reduce their in-house workload. They provide efficient ways to manage patient collections. Some ways these outside providers help ease the burden on healthcare systems include:
- Patient billing and collections.
- Claims processing and submission.
- Denials management and appeals.
Working with external providers allows hospitals to use experienced revenue cycle teams. This helps minimize claim denials and increase revenue flow, giving them a competitive advantage.
4. Evolving Healthcare Regulations and Policies
Healthcare is a heavily regulated industry with constantly changing rules and requirements. However, the past couple of years has brought about some major overhauls.
It’s been a challenge, and everyone from healthcare administrators to revenue cycle managers has found themselves scrambling to stay up-to-date. This includes staying current on everything from new coding guidelines to evolving privacy regulations.
Consider the 7, which aims to increase transparency in medical billing. Healthcare providers are responsible for providing accurate cost estimates upfront so patients aren't surprised by unexpected bills.
While this is a positive step for patients, it does create more work on the backend for providers. In 2024 and beyond, staying compliant requires ongoing staff training, vigilant monitoring, and possibly even working with compliance experts or legal counsel. These efforts help to avoid costly penalties and maintain financial health.
5. Increased Focus on Patient Financial Engagement
The rise in patient financial responsibility, including high-deductible health plans, means patients are shouldering a greater portion of their healthcare costs. This shift influences how patients interact with the financial side of healthcare. Today, it’s about so much more than just sending out a bill; providers must prioritize the patient's financial experience and find ways to engage patients.
Patients embrace digital transformation in banking and other aspects of their lives. They desire the same seamless, technology-driven healthcare experience.
For instance, the Healthcare Financial Management Association found that over half of patients prefer more online interaction. That’s not really surprising since a third of all patient payments already happen online.
This involves offering patients flexible payment options, providing easy-to-understand billing statements, and allowing online bill pay. By leveraging digital tools and strategies, such as mobile apps and online portals, healthcare providers can improve patient satisfaction. They can also reduce administrative burdens and accelerate the revenue cycle, ultimately increasing patient satisfaction.
6. Heightened Cybersecurity Concerns and Data Breaches
We live in a digital world, which comes with digital risks. The healthcare industry handles mountains of sensitive patient data. Cyberattacks are an ever-present threat, making data security a top priority.
Protecting this data is paramount. It ensures legal compliance and maintains patient trust.
A data breach could disrupt your revenue cycle and severely damage your reputation. You could also be exposed to lawsuits and hefty fines.
Investing in strong cybersecurity measures and robust data encryption practices is critical in today's interconnected world. This includes staff education, multi-factor authentication, and routine system updates.
Editor's Note: One of the reasons why healthcare admin teams like Plume and Zoomcare love Magical is because it's secure. Magical helps eliminate repetitive healthcare admin tasks like data entry and moving patient data between systems. Plus Magical doesn't store keystrokes or store any patient data.
7. Rise in Denials
Dealing with denied claims is a constant headache for healthcare providers. According to an AKASA survey, half of providers stated their denial rates increased in the past year, making this a big deal for revenue cycles going forward. Some of the main causes include errors with patient information, insufficient documentation, or issues with prior authorizations.
So, what are some things you can do to get denials under control? A proactive approach is best, which is why hospitals are placing more importance on staff training so employees are up to speed on the ever-changing requirements for claim submissions.
Providers can leverage technology by implementing automated systems for prior authorizations, proactively managing denials by prioritizing those with a high chance of recovery, and making sure claims are accurate the first time you submit them. They can also work to reduce denials by improving the quality of data and the accuracy of medical coding.
FAQs About Revenue Cycle Management Trends
What is revenue cycle management in healthcare?
Revenue cycle management (RCM) in healthcare involves managing the financial aspects of a patient’s encounter from registration and scheduling through the final payment of the balance. A typical revenue cycle includes patient registration, insurance verification, billing, and collections.
Managing the financial engagement of the revenue cycle well ensures your healthcare organization gets paid for the services it delivers. Healthcare organizations can improve their revenue generation by optimizing their revenue cycle.
What is the most crucial aspect of the revenue cycle in healthcare?
It’s impossible to point to one aspect of the healthcare revenue cycle as the most crucial because they all work together to ensure the financial health of your healthcare facility. However, a strong patient access and insurance verification process helps set everything up for a more seamless experience for both the patient and your staff. That’s because errors on the front end are sure to snowball throughout the remaining parts of the process.
How can data analytics be used to enhance the efficiency of revenue cycles?
Data analytics allows you to make more informed decisions, streamline your workflows, and use predictive modeling to see patterns, helping you identify and prevent potential issues. By harnessing data-driven insights, hospitals can pinpoint problem areas that might be creating billing errors and bottlenecks in their systems.
Revenue Cycle Management Trends: Final Thoughts
These are just some of the revenue cycle management trends shaping the healthcare field today. Keeping up with emerging technologies while staying informed about regulatory changes helps providers make smart, data-driven decisions. This supports the financial well-being of the facility, but providers should not overlook the importance of the patient's financial experience.
By embracing a proactive approach and investing in innovation, revenue cycle leaders can steer their organizations through challenging times and help patients understand their financial responsibility.
One of those proactive actions is implementing Magical into their workflows. Magical is used (and loved) at more than 50,000 healthcare admin companies to save 7 hours a week (on average) on their repetitive tasks. Try it for your team today!
