Without a workable revenue cycle management system, 82 percent of the hospitals plan to go blind with value-based reimbursement and 85 percent may seek consulting services.
Approximately one-quarter of US hospitals (26 percent) do not have an effective healthcare revenue cycle management solution in place, according to a new Black Book survey.
Black Book surveyed over 4,640 individuals from 522 hospitals and healthcare delivery networks on their use of 165 revenue cycle management technology services and solutions. The survey showed that revenue cycle management improvement is happening, but a significant portion of hospitals still do not have workable solutions.
While 26 percent of hospitals do not have a plan to optimize or replace legacy revenue cycle management systems, the proportion of hospitals without a transition plan is down compared to six years ago. In 2012, 35 percent of all hospitals did not have a revenue cycle management strategy in place to improve or replace their solutions.
The most recent survey results show that about 400 hospitals implemented a viable, effective revenue cycle management optimization or replacement plans over the past six years.
However, the opportunity to improve healthcare revenue cycle management remains. Of the 1,600 hospitals without a revenue cycle management optimization plan, about 82 percent expect to make value-based reimbursement decisions in 2019 without the use of an advanced software or outsourced partner, the survey showed.
Value-based reimbursement is overtaking the traditional fee-for-service system. The proportion of healthcare payments tied to an alternative payment model is rising, reaching 29 percent of healthcare payments by 2016, the Health Care Payment Learning and Action Network (LAN) recently reported.
The number of payments linked to value-based reimbursement is only going to increase as private and public payers implement alternative payment models to lower costs and improve care quality. And hospitals will be expected to take on the clinical and financial risks associated with the models.
Effective revenue cycle management solutions can help hospitals make the transition to value-based reimbursement.
“What providers absolutely must have are really powerful analytics that are able to take clinical and outcomes data, a lot of which resides in clinical systems, and combine it with financial data to accurately measure where we improve quality based on outcomes results,” Deanna Kasim, Research Director of Payer Health IT at IDC Health Insights, told RevCycleIntelligence.com.
“There is an absolute need that if this is going to be successful in terms of changing reimbursements and care delivery models, payers need to get providers and the consumers to the table and there has to be the next generation of analytics applications to support these efforts.”
Without a viable, effective revenue cycle management solution, hospitals could lose revenue during the transition to value-based reimbursement.
In light of the challenge, 85 percent of Black Book respondents said they would partner with a revenue cycle management consultant or advisory company for short-term direction.
For the long-term, however, hospitals will need to partner with a third-party vendor to implement an optimized revenue cycle management solution that can deliver value-based reimbursement results.
Black Book explained that hospitals can invest in core, platform, and/or point solutions, which cover enterprise-wide functions. Or hospitals can implement bolt-on solutions that automate specific components of the healthcare revenue cycle.
At this stage in the market, hospitals are currently turning to bolt-on solutions to complement their legacy financial and clinical systems. About 45 percent of large and community hospitals in a recent Black Book survey plan to use multiple bolt-on solutions for revenue cycle management in 2019.
Few hospitals expect to use one core legacy vendor for a software solution. Only 23 percent of small hospital staff, 15 percent of community hospital staff, and 17 percent of large hospital staff stated that relying on a core solution was their organization’s revenue cycle management strategy for 2019.
Hospitals are investing in more bolt-on solutions versus core software because of staffing concerns, Black Book reported in the most recent survey. The five-month polling process revealed that staffing concerns were the top challenge hospitals faced with implementing new revenue cycle management solutions or improving legacy software.
Finding skilled revenue cycle management human resources for new solutions was a major obstacle to optimizing or replacing legacy systems. Therefore, outsourcing core functions or implementing bolt-on services was a short-term alternative, hospitals leaders said.
“If hospitals are to maximize revenue and reduce claims take-backs, it is imperative that those still behind the curve find a way to dedicate appropriate resources toward implementing an effective RCM system,” the market research firm concluded.