The healthcare landscape has been drastically changing in the last decade. Along with incorporating the newest technologies to drive improved quality of healthcare, hospitals also have to comply and provision for several regulations and mandates for their operations that go beyond patient care. While hospitals’ primary responsibility is to offer the best possible medical care and attention to the patients, they have to also ensure that as an institution, they are financially organized and healthy. Revenue management is, hence, one of the most critical aspects of hospital management. It covers the identification, management, and collection of patient service earnings to ensure that the administrative and clinical functions operate smoothly. The hospitals have to also deal with insurance criticalities and claim settlements to ensure the due revenue is cleared promptly.

As hospitals move past the traditional means of operation and embrace a more sophisticated and technology-driven process, revenue management continues to be one of the key complexities they have to deal with.

Let’s dig deep into what leads to these complexities and how they can possibly be streamlined for effective revenue management.

Key challenges in revenue management in hospitals:

Collecting at point of service

No matter how comprehensive healthcare insurance is, there are several costs incurred in the course of receiving treatment, especially when the patients are suffering from complex, long-lasting conditions. So while it may seem ethical to wait for the patient’s recovery or after the discharge for the services, over 85% of the healthcare organizations find it extremely tedious. Also, when the patients or their families are not abreast of the potential spending, it may result in a sudden shock at the end of the treatment. Collecting at point of service, at least partially or initiating a conversation regarding the potential cost is of utmost importance.

Instead of leaving uncollected revenue at the table waiting to be collected at the end of the treatment, healthcare facilities can initiate real-time bills to ensure a consistent inflow of cash.

Patients also can benefit from making partial, on-to-go payment instead of waiting out to pay a huge chunk at the end of the service. For healthcare revenue success, point-of-service payment collection is a huge game-changer, and 90% of the physicians participating in a study ascertained the same.

 Errors in billing

Medical billing is one of the most crucial elements of revenue management in hospitals and healthcare facilities. According to a report, 80% of the medical bills contain errors. No matter if the patients are covered by insurance or are paying out of their pockets, the increased medical costs can cause an impact on the patient as well as the hospital’s finances. Patient billing errors take place due to staff entering incorrect diagnostic code on the bill, which can cause an impact not only on the amount the patient has to pay but also the quality of healthcare the patient may potentially receive.

Errors in medical billing can result in insurance companies rejecting the claims, putting a financial burden on the patient, or can result in severe fraud charges on the hospitals triggered during audits and investigation.

It is important to use appropriate codes, have a double-check process in places as well as an internal auditing team to ensure that medical billing is error-free.

Adhering to compliance standards

To maintain accuracy in the service as well as medical billing, staying up to date with the latest healthcare regulations and healthcare reforms is critical for hospitals. These rules are constantly changing, and the hospital administrators need to be precise with billing while adhering to the latest regulations.

In the United States, the hospitals must work in sync with the Healthcare Information Portability and Accountability Act 1996 (HIPAA), which encompasses Standardization of the medical codes, regular compliance audit of the facility, and electronic filing of medical claims along with maintaining the privacy of the patient data.

Interoperability of IT systems

For consistent billing and maintenance of healthcare records, it is essential for the IT systems in healthcare facilities and hospitals to be interoperable. Physicians, surgeons, and other caregivers have a huge amount of patient data that they today integrate into a consolidated data management system. But without a standardized healthcare terminology, this data is not interoperable across different IT systems, which can further lead to inaccurate billing.

This can also add to the healthcare maintenance costs and also impact hospital revenue.

Insurance verification and claim tracking

Most of the developed countries in the world have huge penetration of insurance awareness, with around 100% public health cover. The developing economies are also trying to catch up with private health insurance, meaning a considerable amount of hospital billing across the world is dependent on the insurance remittance. But it is also true that the insurance claims process is tedious, complex and often takes the hospital a considerable amount of time to get their due. This creates a significant lag in the revenue management process.

The claims need to be monitored closely, with no errors. From insurance verification to potential claims reimbursement amounts, it is important to streamline the revenue management.

Lack of financial policy for payment follow-up

As mentioned in the first step, it is critical to have a point-of-service payment system. But for the payments that cannot be billed upfront, payment follow-up is pivotal to ensure a smooth revenue management process. And hence, hospitals and healthcare facilities need to have a financial policy in place. These policies should be legally vetted and made available to every staff member. These policies should guide the staff in taking decisions regarding copayment, delayed payments, as well as unpaid balances, and failed insurance claims.

Technology at rescue

Revenue management for healthcare needs continuous evolution to keep up with the ever-changing healthcare ecosystem and the use of technology. Hospitals need to stay at the top of their revenue management process and workflows to ensure that patients continue to receive appropriate healthcare, the staff is paid on time, while the financial system of the hospital is always going strong. By leveraging strong revenue management solutions, hospitals can streamline their revenue management processes, reduce errors, optimize costs, ensure employee satisfaction, and also deliver stellar patient experience.