Matt Bridge begins a three-part series on how to achieve a high-performing revenue cycle for your facility. Bridge reports that you need an understanding as to where your organization falls on the RCM Maturity Framework. Here is Part One in this exclusive series for ICD10monitor.
Though healthcare organizations were expecting 2023 to end on a modestly high note, with many telling Kaufman Hall that they expected to finally hit the 3 to 4-percent operating margins needed to help ensure long-term sustainability, the pressure is nonetheless on to hasten their rebound from 2022 margins that were 39 percent lower than 2021.
In response, finance leaders are seeking ways to accelerate cash flow, reduce expenses, and increase profitability, with many turning to global resources and technology to transform their revenue cycle management (RCM) operations.
Global Resources and Technology
Spurred on by pressure to regain solid financial footing in the midst of chronic staffing shortages, a growing number of healthcare organizations are turning to global partnerships to augment their internal resources. According to a survey from CWH Advisors and Synchrony, 61 percent of healthcare finance leaders were planning to outsource RCM processes.
That trend is further evidenced by the rapidly growing global healthcare RCM outsourcing market, which reached $23.7 billion in 2022 and is projected to grow to $62.4 billion by 2028 – a compound annual growth rate (CAGR) of 17.4 percent. That growth is being driven in part by the push to globalize broader swaths of RCM services.
On the technology front, more than three-quarters of respondents to one HFMA survey indicated that their organizations were already using or are in the process of implementing RCM automation tools, a 12-percent increase in just one year. Another survey further found that more than 90 percent of finance leaders expected strong budgets for technological advancement in 2023, while investment in RCM technology was a top-five priority for nearly 80 percent of provider organizations surveyed by Bain & Company and KLAS.
RCM technology tools are a wise investment, as research suggests that effectively deploying automation and analytics could eliminate up to $360 billion of spending in U.S. healthcare. Some of those savings would come from administrative functions, including RCM, as well as scheduling, coordinating care with insurers, documentation, and claim or bill adjudication.
RCM technologies range from computer-assisted coding (CAC) and computer-assisted professional coding (CAPC) to front-end patient access tools like intelligent automation for prior authorization and back-end billing compliance tools like claim scrubbers, denials management software, and audit workflow tools. There are also several emerging solutions that take advantage of the power of artificial intelligence (AI) and machine learning (ML) to automate greater swaths of RCM, such as autonomous coding. One new survey from HFMA and AGS Health found that 63 percent of respondents use or plan to use autonomous coding, with 67 percent believing it would accelerate the revenue cycle.
Most healthcare organizations that are working toward a digital transformation of their revenue cycle tend to use several of these technologies as part of their RCM strategy, with one survey finding that 30 percent of hospitals and health systems use two or more automation vendors, while 31 percent manage it internally.
Growth on both fronts – global staffing and technology – is key to achieving a high-performing revenue cycle and fully mature RCM processes. When that is the goal, understanding where an organization falls on the path is important to ensuring that the journey is guided by a strategic roadmap, which should in turn be informed by the organization’s level of RCM maturity, based on an established framework.
The RCM Maturity Framework
The RCM Maturity Framework is a powerful diagnostic tool in the quest to optimize and digitally transform revenue cycle performance. It is the basis for a practical approach to RCM transformation that can help future-proof operations through a hybrid model of in-house management, globalized services, advanced technologies, and actionable analytics.
Four stages make up the Maturity Framework: Emerging, Foundational, Advanced, and High-Performing. Where an organization falls within those stages is determined by its level of maturity across three pillars:
- Service delivery;
- Technology and interoperability; and
Knowing one’s organization’s status within each pillar, and therefore its stage of maturity within the Framework, allows finance and revenue cycle leaders to determine where their organization stands in comparison to other similar institutions. It also allows them to benchmark their current maturation level, identify the steps needed to accelerate the maturation process and gain insights from high-performing organizations.
The RCM Framework allows leaders to create a customized roadmap for navigating their organization’s unique journey toward operational maturity and enhanced revenue cycle performance by answering questions such as:
- What level of RCM maturity has your organization achieved?
- Are you aware of how high-performing organizations are achieving advanced maturity?
- Do you know what’s needed to accelerate the maturation of your organization’s RCM?
- Have you determined the intended destination for your journey?
- Does your team have the necessary skills and experience to take your revenue cycle operations to the next level?
Knowing your organization’s stage of maturity and where it falls short within each pillar provides the directional clues needed to continue advancing toward operational goals.
Part two of this series will examine the four stages of maturity, as defined by the RCM Maturity Framework.