Are you a fan of the National Geographic channel or David Attenborough's nature spectaculars? If you are, at some point, you'll have probably watched an animal fleeing for its life, hotly pursued by another intent on turning it into lunch. Whether it's a killer whale chasing a seal or a cheetah chasing an impala, it makes for thrilling TV, but the stakes couldn't be higher for the participants. Being able to outrun your prey means you get to eat. Being able to outrun a predator means you get to live. Sometimes survival is about being fast; sometimes it's about being stealthy; sometimes it's about having the sharpest sense of smell. Whatever ecosystem you exist within, there'll be a particular thing you need to excel at if you're going to see the next sunrise.
In business, one rarely gets eaten alive (well, not literally, anyway), but being good at a particular thing can still be the difference between profit and loss, growth and decline. Smart companies know that investing in those differentiating capabilities and the processes which enable them will pay huge dividends. They also know it's a process of continuous improvement because the definitions of "good," "better," and "best" change over time depending on market maturity, the nature of competition with the industry, and in particular, new regulations.
For US healthcare providers, the consensus is that revenue cycle management (RCM) is today's differentiating capability. In a 2021 article for the Healthcare Financial Management Association (HFMA), Kevin Brennan, who served as CFO for Pennsylvania healthcare provider Geisinger for 23 years, stated, "Efficient, effective revenue cycle management, after all, is key to our survival. It also directly impacts our ability to contribute to the health and well-being of our communities."
Over the last couple of years, regulatory changes designed to create greater pricing transparency and protect consumers from surprise bills have created both a carrot and a stick. In "How health companies can prepare for the price transparency rules and surprise billing changes", PwC neatly summarizes the upside - "With more pricing information available than ever before, health organizations should rethink contracts, negotiation strategies and ways to build trust with consumers. Traditional health organizations and new entrants have the opportunity to extract fresh insights from the newly public data and create innovative tools to help consumers to clearly understand prices."
The downside is equally well-defined. January 2022 saw the implementation of penalties under the No Surprises Act whereby healthcare providers face fines of up to $10,000 for each violation of the regulations prohibiting unexpected patient bills – and the law doesn't differentiate between fraud and flawed billing processes. Whatever the cause, the outcome will be the same – a hefty fine, most likely accompanied by unwanted publicity and reputational damage. The Healthcare Insurance Portability and Accountability Act (HIPAA) has also raised the stakes by tightening the requirements for claim data submission – and fines for HIPAA violations are significantly higher.
The risks of bad billing processes aren't limited to fines either. With the shift from the traditional fee-for-service model to value-based reimbursement, efficient and accurate RCM is essential to ensure you're billing for everything you've provided and not leaving money on the table.
Whether money is going out the door in fines or not coming in because you failed to bill for it, it's not contributing to your bottom line. PwC's answer to the problem is straightforward: "Improve billing processes." They say providers and payers should "review their data systems to make sure they can deliver accurate cost estimates for patients. They also should review the systems used for insurance verification as the accuracy of those processes will be essential once the changes to surprise medical billing take effect."
BusinessOptix can help you avoid the risks and capitalize on the opportunities of these new regulations in four steps:
Like every other organization, healthcare providers need to reduce costs and increase operational efficiency to remain competitive and thrive in their market. However, the latest regulations on billing have significantly increased the importance of effective (and accurate) RCM. The cost of inefficient or broken processes has never been higher, not just in terms of revenue left on the table but also in fines, bad publicity, and erosion of consumer trust.
