Revenue Cycle Management Automation in Healthcare — Everything You Need to Know

Healthcare is, and should always be, primarily about health. But the inescapable truth is that all medical services cost money.

This obvious fact has led to the developing of a robust IT infrastructure that manages the healthcare revenue cycle, from handling insurance claims to collecting payments. The whole process is a sequence of numerous tightly interdependent steps. Its complexity leaves room for optimization and very little room for error.

Smooth Revenue Cycle Management (RCM) is critical for effective healthcare and reducing revenue leakage, but surprisingly few industry leaders perceive its importance. For example, a 2020 report showed that 87% of providers still used manual and paper-based processes for collections. The consequences? 78% claimed they failed to collect payments over $1000 within 30 days. Add fluctuations in healthcare spending, and you have a recipe for an unstable and inefficient system from the perspective of patients and providers alike.

Even though the pandemic has undoubtedly increased the level of digitization in healthcare organizations, many still rely on manual revenue management operations. Luckily, solutions exist that can be easily adopted and don’t require a massive investment in complex IT infrastructure setup or maintenance. This article will explore some of them, discussing RCM systems for medical services and suggesting how your medical organization can benefit from Revenue Cycle Management automation.

Learn more about using Robotic Process Automation in other industries, like RPA in insurance, RPA in logistics, or automation for consultancy.

Revenue cycle management refers to all the administrative tasks devoted to financial transactions between patients and their providers and how they are handled. The key processes in RCM are:

Pre-authorization — the process starts when a patient makes an appointment. To set up a patient account, the provider must gather and register all the necessary data, such as personal info and medical records, and assess the patient’s insurance eligibility.

Medical coding — next, medical data like test results, diagnoses, or procedures are translated into a unified code. This standardized system facilitates communication between physicians, office staff, insurance companies, and various healthcare providers involved in the treatment.

Claims submission — a coded record of the patient’s treatment is submitted to their insurer, who then reviews and approves or denies the claim.

Payment collection — if the insurer reviews the claim positively, the provider receives reimbursement. The amount depends on the patient’s eligibility, as insurance doesn’t always cover the amount due. If so, the provider must follow up with the patient and collect the rest of the payment.

Service review and reporting — once the payment is complete, the data used in the revenue cycle and clinical treatment is analyzed. This process ensures insight into possible issues and methods of overcoming them to streamline the entire process.

At this stage, it’s important to note that even though the term revenue cycle management is often used interchangeably with medical billing, the two aren’t synonymous.

RCM encompasses all the processes mentioned above, while medical billing refers only to those concerned directly with claims, i.e., coding, submission, and payment collection. In that view, RCM is a broader, end-to-end workflow that includes billing as an important part.

The revenue cycle is affected by many unpredictable, shifting factors that can be internal or external. These moving parts often complicate revenue cycle management, making many cases wholly unique.

Revenue Cycle Management software aims to digitize and replace paper-based procedures and documentation in the revenue cycle workflows. Think of it as the EHR of medical billing and claim management.

According to a 2021 forecast, the Revenue Cycle Management software industry is expected to grow by 10% annually through 2021 and 2025. This and other research prove that the demand for RCM solutions is rising. And for a good reason.

Revenue Cycle Management systems assist the back-office staff in many essential tasks within the revenue cycle management, such as:

• checking eligibility,
• claim correction and tracking,
• KPI reporting,
• data entry,
• medical coding,
• denial management and alerts,
• contacting patients and insurers,
• cost estimation.

… and more. They achieve all that by leveraging innovative technologies — including Revenue Cycle Management automation.

Many RCM processes—medical billing in particular—can be optimized with the help of intelligent software. What’s more, algorithms can entirely take over the execution of some simpler tasks. Here are the most popular solutions used for revenue cycle management automation.

While the above solutions find use in revenue cycle management automation, they vary in deployment complexity and day-to-day operations. RPA usually requires the least effort and investment of all five while promising relatively fast ROI.

That’s not to say that RPA implementation is easy. On the contrary, a recent survey by Becker’s Hospital Review reveals that although 51% of providers incorporate some form of RPA in their systems, just 7% would classify the adoption as “mature” and 33% as “robust.”

Still, when you are supported by a trusted team of automation experts, deploying the robotic process automation revenue cycle is a great first step toward further automating your financial operations. That’s because revenue cycle management, by its nature, is:

1. Repetitive — sending invoices, receipts, payment reminders, verifying patient data, and checking regulation compliance — are some tedious daily billing operations that RPA bots excel at.

2. Stage-based — as a whole, the revenue cycle is complex but consists of numerous simpler steps. Many of these stages can be managed by bots, allowing your staff to focus on other, more demanding tasks.

3. Prone to error — since scripts don’t get tired and don’t lose focus, they’re less likely to make typos or leave form fields unfilled. They can assist human billers in complicated cases, suggesting corrections and insights.

4. Costly — MGMA estimates that 2020 the US healthcare industry lost over $16 billion due to revenue cycle inefficiencies. Many of them could have been resolved with automated revenue cycle management.

Using RPA opens up new opportunities to optimize the processes within the revenue cycle. Here are some of them:

Faster cost estimates — automating the benefits retrieval process will expedite cost estimate turnover.

Pre-authorization assistance — RPA bots pull patient data from other systems and upload them directly into your Hospital Information System (HIS), reducing delays.

Enhanced patient communication — RPA will automatically schedule meetings and send patients reminders or recaps of the information shared on a phone call.

Automated data entry — RPA can integrate the data from various sources into your system faster and more precisely, preventing simple errors and resulting denials.

Compliance — by reducing manual processes, RPA helps providers avoid errors and assure compliance with HIPAA and other regulations.

Handling orders and referrals — manually reviewing referrals and orders creates further delays in the revenue cycle. In contrast, RPA handles order scheduling and confirmation, enabling a smoother RCM.

Claim denials management — simple cases of claim denials can be handled entirely by RPA bots while your staff works on the more complicated ones.

RPA for claims processing is also a great decision that will boost your company’s productivity

Third-party integrations — efficient RCM often requires multiple tools from different providers. RPA ensures that all of them work together seamlessly.

Improved patient experience — RPA revenue cycle ensures faster claim processing, improved communication, and higher efficiency, encouraging patients to choose you over other healthcare providers.

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With constant regulation changes, cost fluctuations, and unforeseeable challenges like COVID-19, delivering high-quality medical services isn’t possible without a stable financial infrastructure. For this reason, healthcare leaders are adopting automated solutions that allow for efficient and secure revenue cycle management.

Suppose you’re looking for a trusted partner to automate your organization’s RCM systems; contact us at Flobotics. We have vast experience working with medical companies and believe in the ROI-first approach — we always consider the costs and potential gains to help our clients save and earn as much as possible.