Optimized workflows in healthcare receivables management remain an elusive goal, as hospitals, health systems and practices continue to focus on cost savings and financial recovery in the pandemic's aftermath. Efficient processes are also central to successful management of the value-based reimbursement models gathering industry momentum.
This CommerceHealthcare® Solution Perspective briefly examines typical remittance automation barriers, defines the characteristics that comprise an automation “gold standard” and describes how Commerce’s solutions meet the standard.
Key Issues
Cost containment is a healthcare imperative. An estimated 40% of hospitals continue to incur operating losses.1 PwC predicts that medical costs will rise 7% in 2024 driven by high inflation, wage increases, and the effects of clinical workforce shortages.2 A leading rating agency sees longer-term "protracted margin compression."3 Rising insurance claims denials add to the burden, costing hospitals and health systems who fight them an average of $43.84 per claim.4
This environment mandates a high-performing revenue cycle, with automation of the core remittance management process an increasing necessity. Unfortunately, the receivables area continues to face several hindrances to optimized automation. Two of the most prominent:
- Labor intensive processes. Manual steps still burden the remittance process. For example, the closely-followed CAQH Index recently calculated that 161 million remittance advices were still processed manually in 2023, with another 365 million partially automated.5 CAQH estimates that one-fifth of spending on high-volume healthcare administrative transactions could be cut through fully electronic processing.
- Disparate systems. The revenue cycle also relies on a variety of financial, EHR and patient management systems that often are non-integrated, creating workflow complexity and forcing manual splitting and posting of aggregated remittances. Reconciliation across the various systems is difficult.
To overcome these hurdles, providers have pursued remittance automation with varying success. It's not uncommon for remittance staff to access twenty or more payer websites, only to download paper forms for completion. Such scenarios help explain why over half of surveyed revenue cycle management (RCM) executives are dissatisfied with their current automation technology.
Advanced technology such as generative artificial intelligence is likely to drive further automaton investment. One study touts its potential to "lessen health system' dependency on resource-intensive processes" and offers the example of supporting accounts receivable with automated follow-ups.7
The CommerceHealthcare® Solution
What does the right automation entail? Organizations must evaluate remittance automation investments through the lens of a “gold standard.” RemitConnect®, by CommerceHealthcare®, automates the entire posting and reconciliation process for insurance and patient receivables, reducing complexity caused by variable payment formats. It adheres to the essential gold standard requirements by offering:
- A single unified system. RemitConnect® is a unified technology/services platform that integrates with revenue systems and establishes one centralized hub for all payments processing.
- Automated handling of diverse payment types. The solution manages the full array of payer and patient payments, from checks and paper Explanation of Benefits Statements (EOBs) to Electronic Remittance Advice (ERAs) and Electronic Fund Transfers (EFTs).
- Comprehensive process automation. RemitConnect® goes “all in” to prevent automation leakage with end to end coverage, including (Figure 1):
- Proactively working toward 100% EFT for every remit claim.
- Automatic unbundling of commingled payments.
- Automatic reconciliation of payments and claims.
- Automatic posting to the appropriate financial system.
- System-generated management reporting and audit trails.
This feature set creates exception-based workflow, so staff can focus on non-routine cases. Software functions such as an Exceptions Tab, Posting Review, and Follow-Up further streamline exceptions management.
Full Optimization Yields Major Benefits
Pursuing a “gold standard” rather than accepting workarounds or partial automation unleashes significant benefits:
- Maximizes cost savings and cash flow.
- Truly optimized workflow. Delivers ROI and sustains long-term gains.
- Heightens workforce productivity. Exception-based workflow boosts output. Automation also supports efficiency for staff working remotely.
- Value-based care readiness. Efficient processes are foundational to manage value-based reimbursement.
- Advancement of digital transformation efforts.
Conclusion
The “gold standard” requirements for remittance automation are clear, value-generating and achievable. RemitConnect® conforms to these requirements and deserves consideration as a core automation solution.
Resources
- S. Becker and M. Gamble, "7 Healthcare Trends We're Watching Now," Becker's Hospital Review, March 4, 2024.
- PwC, Medical Cost Trend: Behind the Numbers 2024, June 2023.
- Fitch Ratings, "2023 Median Rations: Not-For-Profit Hospitals and Healthcare Systems," July 25, 2023.
- Premier, Inc., "Trend Alert: Private Payers Retain Profits by Refusing or Delaying Legitimate Medical Claims," March 21, 2024.
- CAQH, 2032 CAQH Index, January 30, 2024.
- J. Ray, "Rev Cycle Leaders Double Down on Their Dissatisfaction with Automation and Payers," HealthLeaders, November 9, 2023.
- McKinsey & Company, "Setting the Revenue Cycle Up for Success in Automation and AI," July 2023.