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Front to Back: Automation in RCM

Michele Zimmerman
May 29, 2024
back-end RCM

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The Importance of Automation in the Back End of the Revenue Cycle

Technology is becoming the answer to many of the challenges facing revenue cycle management (RCM) organizations throughout the healthcare industry, with many of these organizations turning to automation. Industry leaders have embraced the benefits automation can provide for the front end of the revenue cycle. However, many have overlooked just how much automation can benefit the back end of the revenue cycle.

Obstacles to overcome

Stop me if you’ve heard this before – RCM departments within hospitals and healthcare organizations are facing workforce shortages. And I’m sure you’ve seen several statistics to back up this claim. Well, here’s one more for you. A recent survey of healthcare executives found that 63% of respondents were experiencing staffing shortages in their revenue cycle departments.

As such, existing staff will continue to be asked to do more until this crisis subsides. But since answers of the human variety aren’t strolling through the door, RCM leaders are looking to technology to help.

By automating the repetitive and often time-intensive tasks, staff can be better allocated to tasks that require a human touch, making the department more efficient and improving your ability to recover revenue.

Help is on the way

Judging by recent trends, it appears as if hospitals and healthcare organizations are recognizing the need for automation and increasing the tech budget for their RCM organizations.

A 2023 survey showed that about 80% of healthcare executives are increasing spending on IT and software. This is, in part, to understand and adopt emerging technologies, such as generative AI. It also includes understanding how these technologies, including Robotic Process Automation (RPA), can benefit revenue cycle operations.

Focus on the front end

Front-end RCM helps ensure a smooth patient journey and plays a crucial role in managing financial operations by minimizing claim denials, reducing days in accounts receivable, and improving collections.

Technology has enhanced many of these actions. Mobile apps, patient self-service kiosks, and the like give patients the ability to schedule appointments, enter insurance and payment information (as necessary), and even check in for medical appointments.

In addition, information about insurance coverage and payment options can be sent to the patient ahead of the appointment.

Beneficial for the back end

back-end RCMOf course, the back end of the revenue cycle focuses on collecting payments after services have been rendered. This process includes billing, collections, and follow-up on unpaid claims. The goal is to ensure prompt payment collection and address any discrepancies or issues swiftly.

These processes help minimize claim denials, reduce days in accounts receivable, and optimize financial performance for healthcare providers. It also plays a vital role in compliance with regulatory requirements and improving patient satisfaction. Without efficient RCM, departments risk losing reimbursement, which could impact the entire organization.

However, quite a few back-end RCM tasks can be improved with technology and automation. Let’s take a look at some critical areas in the back end of the RCM process that can benefit from automation.

Denial management

Denials remain a problem for RCM organizations. Yet, automation can improve the process of managing denials, even reducing the number of denials. This can result in more reimbursements and receiving them promptly. Some of the ways automation can help with denial management include:

  • Standard workflow: Categorizes denials into clinical vs. technical with customizable CARC code mappings for appropriate routing and follow-up.
  • Payer mapping: Configure CARC mapping by payer for workflow and root cause analysis.
  • 835 EDI files: CARC/RARC codes used to determine root cause and route for appropriate workflow.
  • Appeals: Workflows specific to Level 1-3 appeals through action and result codes.
  • RPA-driven task completion associated with:
    • Incorrect or missing information
    • Invalid coordination of benefits or no coverage
    • Additional documentation requirements
    • Adjustment postings

Insurance follow-up

Healthcare organizations must manage the insurance process to ensure payments are received from insurance providers. Insurance follow-up is a time-consuming task that keeps RCM staff from tasks that require a human touch and help improve the patient experience. Some of the tasks that can benefit from automation include:

  • Standard, exception-based workflow: Automatically process accounts through follow-up actions.
  • 835 and 277 EDI files: Raw file scrubbing, combining claim status and CARC codes for root cause analysis.
  • Financial treatment plans: Workflow UI simplifies the management of follow-up activity cadences.
  • Pool management: Organize similar accounts based on status, phase, and other criteria.
  • Payer website assistant: Quickly navigate to payer websites.
  • Payment discrepancy: Ability to set payment discrepancy thresholds to streamline the working of over- and under-payments, improving accuracy and time spent working these accounts.
  • Timely filing: Configurations that track dates, alerts, escalations, denials, and appeals.
  • Unallocated payments: Record formatting and workflows that enable tracking, prioritization, and management of unallocated payments, which improves overall time to resolution.

Complex claims

These require additional time and resources to handle, including staff members with specific expertise in these types of claims. Complex cases often include:

  • Intricate levels of details
  • Multiple parties
  • Legal disputes
  • Large financial losses
  • Settlement tracking

These cases are often handled manually, which can be marked by inefficiencies, errors, and approval delays. Yet, automation can eliminate many of these errors and inefficiencies, and can also:

  • Send reminders about required documents with the ability to upload them within the application.
  • Track letters and phone calls made to all parties involved in the complex claim.
  • Timely filings applied to payer resolution requirements.

Automation for all

As revenue cycle tasks continue to grow in complexity, the need for intelligent, connected workflows is more important than ever. And that requires automation. This technology isn’t just for the front end of the revenue cycle anymore. It might be even more critical for back-end RCM. Automation helps RCM organizations run more efficiently and effectively, increasing revenue recognition while improving the experience for staff and patients.

That makes it a valuable technology to invest in!

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