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Automating Revenue — Healthcare Revenue Cycle Quick Wins Amid COVID-19

Matthew Jackson, Managing Director Healthcare IT and Digital Solutions Leader
Joe O'Malley, Senior Manager Electronic Medical Record Optimization Solution Lead

If you were to walk into the administrative office of a typical healthcare provider’s revenue cycle department and observe core functions, chances are you would observe similarities between 2020 and 2005: a system inundated with static processes that rely heavily on manual intervention. Processes such as financial clearance, claim status checks, denial resolution and late charge entry all look nearly identical for providers across the nation. These processes are generally unrefined and consume many valuable full-time employee (FTE) hours that could be repurposed to more value-added tasks. Most revenue cycle departments simply do not have adequate FTE bandwidth and must outsource certain functions to external vendors, such as low-dollar claim resolution, bad debt and third-party liability follow-up.

Healthcare providers have been focused on quality-of-care measures and value-based purchasing (VBP) payment models while also striving to provide optimal patient experiences in an increasingly patient-centric market. The challenges healthcare providers face through navigating more complex reimbursement practices, keeping up with the various mechanisms for reimbursement from VBP arrangements to fee-for-service and the various associated regulations, divert energy from innovative and proactive thought.

Transformation opportunities, such as automation, have been put on the back burner to survive the waves of a changing industry. With all the current shifts in the healthcare environment, the time is ripe for considering more automated and efficient solutions. The global pandemic has brought to the forefront the need for greater innovation and has resulted in dramatic increases in previously lower-volume treatment modalities, such as telehealth.

As a result of the pandemic and its impact on healthcare services, healthcare providers must revise their organizational priorities and begin to address how to deliver services and care more efficiently and effectively. The traditional centralized business office space and the need to protect employees through social distancing have resulted in the transition to a remote/work-from-home setting.

The static and inefficient nature of revenue cycle processes has been compounded recently by increasing immobility and the unavoidable furloughing of workforces. Healthcare providers should take advantage of this change to create new opportunities for improving revenue cycle departments. To provide additional context and framework regarding these challenges, let us examine two examples impacting both the front and back ends of a traditional revenue cycle department.

Front-End Financial Clearance Without Robotic Process Automation (RPA)

Traditional financial clearance teams delineate work in progress (WIP) into groups (commonly by an alphanumeric split). In a department where “schedistration” has not been implemented, this group is responsible for verifying the eligibility of a patient and obtaining any necessary authorizations. In response to the pandemic, this group is now required to identify both the eligibility and need for authorization for a larger subset since many resources within their departments have been furloughed. To compound the issue, if the department outsources these functions to a vendor, they may encounter similar workforce reductions and return-to-work challenges.

Claim Status Checks Without RPA

Accounts receivable (A/R) follow-up teams similarly delineate WIP into groups (commonly by payer, claim adjustment reason code (CARC), and/or alphanumeric split). Their responsibility is to determine the payment status of claims in which a CARC has been received by the payer upon adjudication. Due to furloughs and reductions in workforce, resources are forced to adapt quickly to any updated rules and guidelines of payers and are responsible for additional follow-up WIP and monitoring of work queues. This group faces a similar issue to the financial clearance group regarding the impact on operations due to utilizing an outsourced vendor, including the potential for increased and aging A/R, which often exceeds timely filing deadlines.

What is the overarching problem? These processes require time. Processes that are time-consuming and rely on human capital are less likely to be able to adequately respond to a dynamic and rapidly changing industry. RPA and “bots” can replace or augment many repetitive processes that are redundant and time-consuming, and allow the revenue cycle function to focus its workforce on more value-added tasks that require cognitive reasoning and experience to address. For the two examples above, let’s see how these scenarios would fare if robotic processes were being utilized:

Front-End Financial Clearance With RPA

The financial clearance department could implement a bot that identifies newly scheduled visits each morning and then utilizes patient demographic and insurance information entered by the scheduling staff to navigate to supporting payer modules to verify the patient’s eligibility for the scheduled procedure. Additionally, the bot could validate if prior authorization is required for the scheduled procedure.

Whenever incorrect insurance information is identified, or an authorization is required, the bot would redirect the account to the appropriate respective worklist, creating an exceptions-based workflow. When an employee accesses the worklist, they are presented with a list of accounts that have defined actions (e.g., need for identifying and obtaining the correct payer, authorization required).

Employees are no longer spending time tracking down what is needed on an account, but instead are spending value-added time on correcting information with the patient or obtaining authorization from the payer based on the automatically generated worklists. These functions help ensure billing accuracy and reduce expensive rework to correct billing.

Claim Status Checks With RPA

The follow-up team could similarly implement a bot that retrieves a list of all outstanding A/R accounts with a “no response” or “additional information required” CARC status from a payer after a defined period of time. The bot would search for each claim on the respective payer portal and, depending on the result, prioritize the claim within the appropriate work queue. The follow-up team would access the worklist each day and determine which accounts require action and the appropriate steps to remediate the outstanding accounts.

In the above two examples, both automated solutions enable revenue cycle resources to move more operations in-house, reduce reliance on vendors, and achieve greater efficiencies by streamlining these functions. A reduction in vendor-reliant net patient revenue can quickly result in positive impacts to the bottom line. These are simple yet practical examples of how automation is a low-cost solution that can take static revenue cycle processes and make them more resilient, efficient and cost-effective.

We see the rapid adoption of telehealth and drive-through testing as well as the introduction of other previously nontraditional ways of providing services to a wider population transforming healthcare. Automating necessary and redundant activities is key to maintaining or even growing revenue while concurrently reducing expenses. These new methods of care and operational shifts are most likely here to stay. Automation tools have positioned themselves as a strong ally in helping telehealth and other technologies integrate seamlessly with pre-existing EMR modules and billing systems, and this area will continue to expand rapidly as organizations emerge from the COVID-19 crisis. As healthcare organizations are eager to resume full-time operations for surgery and interventional procedures, automation can facilitate a quicker return to normal.

Partnering automation with existing processes throughout the revenue cycle will allow better adaptation of these changes and provide improved and more efficient outcomes throughout the revenue cycle. In addition to a variety of RPA software solutions, there’s a rising trend in the use of intelligent automation, which combines the principles of RPA already discussed with those of artificial intelligence. This optimizes the use of bots by enhancing the efficiency of a process by implementing machine learning and cognitive technologies.

Intelligent automation provides an avenue to continual improvement and enhanced analytics that can better empower revenue cycle departments to make validated financial decisions. Although the current climate is becoming more and more complex, with almost daily adjustments by payers, the future benefits of automation can have a dramatic effect on how healthcare organizations provide services and allows for the focus to be on the patient experience and ensuring access to critical services.

Matt McVey, a senior consultant in Protiviti’s healthcare industry practice, contributed to this content.

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