Navigating revenue cycle challenges requires a robust, integrated and technically focused methodology.
Providers should review their billing policies for nonstandard care settings and ensure that coding policies are up to date.
AI has significant potential to help transform health care reimbursement, value-based care and patient satisfaction.
While health care providers grappled with the challenges of care delivery during the pandemic, payers began investing heavily in automating claim denials to expand medical record requests, and downgrade diagnosis-related groups (DRGs) and emergency department services. Today, workforce shortages continue to be widespread, competition for resources continues to increase, and patient expectations for care are evolving. Outside disruptions, including cybersecurity attacks and shifts in the mergers and acquisitions landscape, also present challenges. Navigating these challenges requires a robust, integrated and technically focused methodology.
“Deploying multifunctional teams can unlock improved financial performance and elevate employee satisfaction,” says Michael Brown, a director in management consulting at RSM US LLP. “Regular communications between providers, revenue integrity, care management, clinical leadership, managed care and IT will identify evolving patterns and information gaps, as well as measure the impact of payer practices and new technology solutions.”
Actionable data ensures both offensive and defensive strategies are well informed, and both have an important role to play in managing through change with less unpredictability.
Controlling labor costs is key to hospital margin improvement. According to the Healthcare Financial Management Association, the health care industry can expect to see continued staffing shortages and clinician burnout. During the pandemic, nearly 20% of health care workers quit their jobs, and nurses and physicians reported experiencing physical, mental and emotional exhaustion. Today we continue to see demand for workers consistently outpacing supply, with open roles far exceeding hiring.
In a survey by the American Hospital Association, around 89% of hospitals and health systems that were already seeing a rise in claim denials in the years leading up to the pandemic continued to see increases post-pandemic, with a 10% to 15% increase experienced by most. To supplement their own workforce challenges, insurers are investing heavily in automation.
“The rise of denials resulted in a new era of scrutiny, the prevalence of DRG downgrades, and emergency EMR adjustments,” says Brown. “The increased focus on documentation and severity capture is not going away and should be a part of all revenue cycle strategies.”
The increased prevalence of high-severity inpatient cases is the result of multiple factors:
AI has already been adopted by payers to deal with their incoming claims and to give out denials, and we don’t expect that to change over the coming decades due to macroeconomic factors, demographics and margin challenges.
The integration of artificial intelligence optimizes operational processes and elevates the quality of care, allowing health care providers to focus more on patient-centered services. AI has significant potential to help transform health care reimbursement, support value-based care and enhance patient satisfaction.
“Payers have already adopted AI to deal with their incoming claims and to give out denials, and we don’t expect that to change over the coming decades, due to macroeconomic factors, demographics and margin challenges,” says Colin Biggs, a manager in the management consulting practice at RSM. “Implementing AI on the provider side is simply a defense. As the market demand for automation solutions has risen in response to resource challenges and payer behavior, the competition among AI vendors has resulted in a dramatic drop in the cost of the technology and the ease of implementation.”
Biggs recommends viewing AI as a tool to automate tasks, not jobs. “Jobs will continue to evolve as low-complexity tasks are automated,” he says, noting that according to OpenAI, 80% of the U.S. workforce could see GPTs handle at least 10% of their work tasks. “There really is an opportunity at every level of health care systems to introduce these technologies and free your staff up from administrative tasks,” he adds.
Policy changes, patient care demands, advancement in virtual and digital technologies, and lower costs will drive a restructuring of the current care system. Some of the site-of-care shifts that occurred due to clinical necessity during the pandemic will forever change the way care is delivered. Virtual care visits will grow significantly, while in-person visits with physicians are projected to decline 19% by 2029. Workforce pressure—including the acute care nursing shortage—the cost of capital, administrative costs and cybersecurity threats show no signs of decline.
“Using predictive analytics, we can preempt the barriers we expect from payers before a claim is submitted,” says Biggs. “It is important to ensure the data being pulled across systems is standardized and supports predictive analytics that are both reliable and actionable. A provider checklist can help with managing costs and complying with new regulations coming down the pike.”
Providers should review their billing policies for nonstandard care settings and ensure that coding policies are up to date. They should also invest in technology that accurately documents care outside of traditional hospital or clinic environments (e.g., by issuing iPads to home health nurses) and strategies for alleviating workplace pressures.
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