Challenges in Healthcare Revenue Cycle Management and How Hospitals Can Weather the Storm


Last year, local hospitals reported good records despite the challenges in revenue cycle management. Increasing operating costs, regulatory issues, flat reimbursements and the switch from patient volumes to lower-paying outpatient and observation services didn’t faze many healthcare providers. Thanks to a strong stock market and lower tax-exempt bond costs, hospitals continued to do well.

While this is good news, providers can’t be complacent now with the changes and regulations awaiting the Affordable Care Act. Under the Trump administration, the U.S. House Republicans recently gave the greenlight to a bill that would revise the 2009 Obamacare. It still needs to get the approval of the Senate, but many are concerned about the impact it will have if it’s passed.

Repealing the Expansion of Medicaid

One of the major concerns is Medicaid expansion. If the bill pushes through and removes that program, it will affect people who are enrolled in it, along with the revenue of their associated hospital. St. John Providence Health System in Warren, for example, has seven hospitals and 670,000 people enrolled in Medicaid. Non-profit hospitals like these will be the hardest hit when Medicaid expansion is repealed.

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Medicaid Expansion Shown to Improve Healthcare Revenue Cycle Management


Operating a healthcare facility is no mean feat. For hospital executives, the task involves not only providing excellent medical care to patients, but it also means keeping a business afloat. After all, a hospital is an expensive venture to run—almost all of its manpower are highly skilled professionals, and the facility uses advanced equipment to help diagnose and treat ailments.

As such, keeping a healthy bottom line is crucial to any hospital’s survival. However, unpaid medical bills prove to be an all too real threat. According to a report from The Tennessean, about half of all hospital bills go unpaid. Healthcare executives know that potential bad debt can hobble their facility’s ability to deliver excellent care to the infirm.

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Monitoring the Metrics of Healthcare Revenue Cycle Management Poses Benefits to Revenue Stream



Amid high-deductible health plans and healthcare consumerism, providers are experiencing changes in revenue sources. However, many of them still face challenges in cash flow and payment collection. According to one study, although hospital receiving offices collect from 35% of their patients, the total amount accounts for only 19% of patient financial responsibility.

One way to keep the cash flowing is to monitor revenue cycle management metrics. With regular monitoring, healthcare organizations and systems create the ability to gain maximum reimbursement and improve the assessment of their billing departments. These metrics should be carefully selected and tracked to inform providers of where their flows currently stand and whether they are heading in the right direction, based on their goals and objectives.

Rate of First Pass Payment Recovery

Experts say that organizations should be receiving a first pass recovery rate of at least 80% to ensure that they are able to close out receivables accurately and on time. Monitoring this metric allows providers to determine efficiency in terms of getting full payment for insurance claims at first pass. Due to submitting claims a second time around wastes time and money, hospitals must strive to collect on the initial submission. They should focus on checking whether claims are processed instantly and closed on time. Read more on this article.