Healthcare Revenue Cycle: Looking Back at 2018 and Ahead to 2019

By Valerie Barckhoff and Danielle Epps

January 11, 2019

As the healthcare industry continues to change, so, too, will revenue-cycle management policies and processes. We saw that in 2018 and expect to see an accelerated version in the coming year.  

 
With 2018 behind us, it’s worth taking time to reflect on a year of unresolved challenges and fair opportunities that will also be present for 2019. In looking back at this past year, the three key revenue-cycle impacts worth noting were:

• Operating Inefficiencies Resulting from a Myriad of Challenges – 2018 presented revenue-cycle leaders with rising operating costs, an insufficient number of resources, and reduced reimbursements. These challenges stemmed from newly implemented government regulations, an inability to appropriately staff revenue-cycle departments, political decisions to forgo Medicaid expansion, and high-dollar/high-frequency managed-care denials.

• Hospitals Write Off Millions in Bad-Debt Expense – In recent years there has been an increase in the volume of high-deductible plans offered by employers, leaving patients with enormous balances for unforeseen hospital services. To address the emergence of these plans, revenue-cycle leaders have attempted to develop aggressive front-end Point-of-Service (POS) programs intended to collect as much of the patient portion as possible prior to or at the time of the patient’s visit. Even with the best-planned programs, hospitals found themselves reluctantly writing off millions of dollars to bad debt as a result of non-existent patient responsibility calculation technology and/or patients’ inability to pay.

• Enhanced Georgia’s Rural Health Tax Credit Aided Hospitals in Need – Last year, Georgia’s exiting Governor, Nathan Deal, signed legislation (effective on July 1) that enhanced the Georgia Rural Health Tax Credit―thereby improving the incentives donors that decided to redirect their tax liability would receive. On the other side, rural hospitals challenged by payer rules and regulations as well as decreased government and managed-care reimbursements received the benefit in the form of more opportunities to address improvements aimed at keeping citizens in need of healthcare services within their own communities. The tax credit was extended through 2021.

• We expect 2019 to present revenue-cycle leaders with additional advancements in technology, patient involvement, and vendor partnerships. In looking ahead in the new year, the four biggest trends we expect to influence revenue-cycle management are:
• Price Transparency Will Be a Requirement – As of January 1, all providers are required to publish their standard charges on the internet. To many leaders, this may mean simply publishing a machine-readable Charge Description Master (CDM). The government explicitly states via the federal register, a directive indicating providers must make available their standard charges, including Diagnosis-Related Group (DRG) inpatient charges. There will certainly be bumps in the road as providers work to thoroughly comply with the new price transparency requirements.   
• Managed-Care Payer Deductible Provisions Move Patients Away from Hospitals – United Healthcare is one of many payers that has decided to herd patients toward stand-alone, outpatient facilities for services such as mammograms and colonoscopies by enforcing a $500 penalty for subscribers and dependents who choose to visit hospitals for those services. This penalty could result in a huge variance in patient volumes for several hospitals, thereby affecting operations and financial health.
• Artificial Intelligence (AI) Will Move Deeper into the Revenue Cycle – The emergence of AI technology has become a focus for a number of revenue-cycle leaders. The technology has been proven to offer leaders more efficient, around-the-clock operations for repetitive processes without requiring human intervention. As AI’s “digital employees” continue to process requests and tasks, they continue to learn and identify opportunities for improvement, giving revenue-cycle leaders the ability to reassign staff to more complex activities.
• Patients Become the Center of the Revenue Cycle – As patients begin to research and observe charges, as published via the price transparency regulation, there will be a need for leaders to implement processes and procedures that will create a revenue cycle that is more patient- versus payer-focused. The ability for providers to better address patients’ concerns and needs will ultimately increase satisfaction ratings, involvement in care and the propensity to pay.
  Staying up to date on current trends, implementing the latest technologies, and keeping patients’ needs top of mind will help healthcare providers be better prepared in the coming year. For more information on how your healthcare organization can navigate these trends, contact Windham Brannon Healthcare Advisory Services Practice Leader Valerie Barckhoff at vbarckhoff@windhambrannon.com or Senior Manager of Healthcare Advisory Services Danielle Epps at depps@windhambrannon.com.