In today's increasingly complex healthcare landscape, medical practices face myriad challenges when managing their revenue cycle. From navigating ever-changing regulations and billing requirements to dealing with denied claims and collecting patient payments, revenue cycle management can be a time-consuming and frustrating process. Worse, medical billing errors come with a hefty price tag, costing hospitals a staggering $68 billion annually.
However, medical practices can maximize their financial potential and streamline their revenue cycle management processes with the right tools and strategies. Medical revenue services, including software and outsourcing solutions, can help practices improve revenue cycle management and ensure they are paid accurately and on time. This article will explore the benefits of medical revenue services and how they can help your practice maximize its financial potential.
What Is a Medical Revenue Service?
A Medical Revenue Service is a specialized service that assists with medical billing, including coding and billing, claims management, collections, patient accounts receivable, and other financial processes related to the medical industry. These services can refine existing billing processes and develop new strategies to maximize reimbursements for healthcare organizations.
Medical revenue professionals have expertise in all facets of the revenue cycle, such as documentation, credentialing, regulatory compliance, and appeals. They can also provide various other solutions to help increase payments and reduce costs. These services can include denial management, electronic data interchange, and contracting services. By leveraging the latest technologies, these organizations help healthcare providers achieve financial success and improve patient care.
How Is Medical Revenue Service Different From Revenue Cycle Management?
Medical revenue services are comprehensive financial pipeline infrastructure solutions that combine technology and expertise to address the entire revenue cycle of healthcare businesses. Revenue cycle management (RCM), on the other hand, is an integral part of medical revenue services but only involves tracking a patient's money as it moves through the doctor's office or hospital. RCM covers payment posting, denials and appeals, charge capture, and coding mistakes. If medical revenue services are the foundation of a healthy pricing system for medical practices, then RCM is its heart.
When used together by a talented team of professionals, medical practices can reduce costs and maximize cash flow and efficiency.
Why Medical Revenue Services Are Becoming More Important
Medical revenue services have become increasingly important in the healthcare industry in recent years. With rising healthcare costs, increased regulations, and the shift toward value-based care, medical providers face greater challenges when managing their revenue cycle. Here is an in-depth look at why these services are becoming so important.
Staffing shortage for medical revenue professionals
The medical industry has been facing an increasingly worrying shortfall of medical revenue professionals who are essential in administering billing and collections for healthcare facilities. This shortfall has been growing at an alarming rate, making it difficult for facilities to hire suitably qualified individuals for key positions.
Statistics show that 79% of healthcare professionals say the national worker shortage is taking a toll on their workplaces. The future looks even bleaker, with experts predicting a shortfall of up to 3.2 million healthcare workers by 2026.
This staffing shortage can seriously impair the functioning of a healthcare facility and the range of services they offer. Providing quality patient care may be hampered if there is insufficient staff to process payments or follow up on delinquent debts, so there's a vital need for medical revenue services that help healthcare institutions operate effectively and efficiently.
Increased denial rates from payers
One of the primary reasons medical revenue services are becoming more important is the increased denial rates from payers. In a pandemic-induced economy, denials have risen 11% nationwide. Insurance companies are becoming more stringent in their reimbursement policies, leading to a higher rate of claim denials for medical providers. These denials can occur for various reasons, including coding errors, missing information, or incorrect billing practices.
Managing denied claims is a time-consuming and complex process that can strain the resources of medical providers, especially smaller practices. Medical revenue services can help providers identify the root causes of claim denials, streamline their billing processes, and increase the chances of successful reimbursement.
Increase in HDHPs and out-of-pocket costs for patients
In the last few years, there has been a massive uptick in the number of people enrolled in high-deductible health plans (HDHPs). According to recent data, enrollment went from 39% in 2016 to 46% in 2019 and continues to grow. About 56% of workers are enrolled in HDHPs.
The increasing popularity of high-deductible health plans and the resulting increase in out-of-pocket expenses for patients have a major effect on the healthcare industry. Generally, patients enrolled in HDHPs are responsible for higher deductibles than traditional health plans and face higher coinsurance costs.
Not only do these out-of-pocket expenses put a financial strain on patients, but they also create an administrative burden. Keeping track of medical bills and payments can be complex and tedious. Consequently, more and more healthcare facilities recognize the need for medical revenue services to assist with managing billing data and carrying out other financial tasks related to patient care.
New regulations in healthcare
As healthcare remains in a state of continuous change, new regulations are helping shape the landscape. The No Surprises Act was passed as part of the 2020 COVID-19 relief legislation to protect consumers from unexpected medical bills caused by surprise out-of-network providers, and the Affordable Care Act works to decrease out-of-pocket costs for individuals. This also introduced new requirements for medical providers, such as implementing electronic health records and reporting quality measures. Medical revenue services can help providers stay on top of these regulations and ensure they are compliant. They can provide guidance on billing and coding regulations, identify areas of noncompliance, and offer solutions to help providers avoid costly penalties.
Many healthcare regulations are quite complex and require specialized knowledge to navigate successfully. Medical revenue services employ experts familiar with these regulations, enabling providers to focus on delivering high-quality patient care.
Inflation and other upward pressure on practice costs
In recent years, healthcare costs have been rising faster than inflation, leading to increased expenses for medical providers. These costs can include everything from equipment and supplies to staff salaries and benefits.
To manage these rising costs, medical providers need to optimize their revenue streams and find ways to increase their revenue. Medical revenue services can help providers achieve this by identifying areas where they can reduce costs, increase the efficiency of their billing processes, and improve their reimbursement rates.
For example, medical revenue services can help providers negotiate better contracts with payers, allowing them to receive higher reimbursement rates. They can also identify areas where providers may be losing revenue due to billing errors or inefficient processes.
Patient financial experience becoming a critical factor in loyalty
Patient financial experience is becoming an increasingly important factor in the patient loyalty equation. According to recent polling, 90% of patients stated that their loyalty to a healthcare facility highly depends on their financial experience.
This encompasses all payment areas, including understanding insurance coverage and deductibles, being aware of financial assistance programs and sliding fee scales, and having access to easy-to-use payment plans. As a result, healthcare facilities must prioritize their patient's financial experience if they wish to create a loyal patient base.
To meet this demand, many healthcare providers have turned to medical revenue services for advice and support with managing billing cycles and identifying collections trends. By leveraging the power of medical revenue service companies, hospitals can provide a more people-centric approach to the patient experience that directly impacts loyalty and retention rates.
Types of Medical Revenue Services
Providers can hire several types of medical revenue services to help with their financial process. From medical billing services to revenue management SaaS, these services are designed to improve the financial health of healthcare facilities. Let's look at some of the most common medical revenue services and what they offer.
Medical billing services and software
Medical billing has seen tremendous growth in recent years. There are many medical billing services and software that specialize in processing insurance claims and scheduling payments for medical care providers. These systems can be separated into two main categories: professional and institutional billing.
Professional billing services
Professional billing services offer comprehensive solutions for individual practitioners or small medical practices that need help navigating the complexities of insurance coverage plans and reimbursements. These services typically provide complete management solutions for patient accounts receivable, including insurance payment tracking, patient payment plans, appointment scheduling, electronic filing systems, etc.
Additionally, these services can provide training for staff members on how to process claims electronically for faster reimbursements as well as support for code selection and reimbursement analysis.
Institutional billing services
Institutional billing services offer comprehensive solutions tailored to larger facilities such as hospitals, laboratories, surgery centers, etc., which are often more complex than individual practitioners or small practices due to their size and scope of operations.
Institutional billing services are geared toward managing higher volumes of accounts receivable from health plans and government programs such as Medicare or Medicaid in a timely manner. Like professional billing services, institutional billing services include accounts receivable management solutions, including tracking payments from insurance companies, setting up electronic filing systems, and developing customized reports about claims processing performance.
They also provide coding accuracy audits, conduct prepayment reviews, set up procedures to ensure compliance with applicable laws or regulations, train staff to process claims electronically, and perform root cause analysis.
Medical debt collection agencies
Medical debt collection agencies can be incredibly helpful for healthcare institutions. These organizations specialize in helping healthcare facilities collect outstanding payments from patients and insurance companies. They typically analyze past-due accounts and advise on how best to collect those debts. This can involve making phone calls, sending letters, or engaging in other forms of communication with the patient or their insurance company.
Medical revenue cycle management outsourcing services
Medical revenue cycle management outsourcing services typically include a range of services to help healthcare organizations manage their revenue cycle processes. Three key services often included in these outsourcing arrangements are patient collections, denial management, and payer management and negotiation.
This service involves managing the collection of patient payments for healthcare services provided. This can include managing the process of sending patient statements, following up with patients with outstanding balances, and providing customer service to patients who have questions about their bills. Outsourcing patient collections can help healthcare organizations reduce the administrative burden on their staff and improve their collection rates.
This service involves managing the process of appealing denied insurance claims to maximize reimbursement. This can include identifying the root causes of denials, appealing denied claims, and tracking appeals to resolution. Outsourcing denial management can help healthcare organizations improve their revenue cycle performance by reducing the number of denied claims and increasing the amount of revenue collected.
Payer management and negotiation
This service involves managing relationships with insurance payers to negotiate favorable contracts and resolve billing issues. This can include negotiating payment rates, managing disputes with insurance payers, and monitoring payer performance to identify areas for improvement. Outsourcing payer management and negotiation can help healthcare organizations optimize their revenue cycle processes by ensuring they receive fair reimbursement for their services.
Revenue management software as a service (SaaS)
Revenue management software as a service is a resource that can help healthcare providers improve their revenue cycle management, optimize patient experience, and increase financial success. This type of software helps streamline operations and provides access to key data that can be used to make informed decisions. Let's take a closer look at two of the most important components of revenue management SaaS: patient cost estimate software and denial management automation.
Patient cost estimate software
Patient cost estimate software is one of the most important components of revenue management SaaS. This software allows healthcare providers to promptly provide accurate estimates for potential services or procedures to their patients.
It also helps ensure that patients have a better understanding of what they are expected to pay up front, as well as how much insurance will cover. Access to this information is critical for improving patient experience and reducing the chances of patients being left with unexpected bills after receiving care.
Denial management automation
Another key component of revenue management SaaS is denial management software. This type of software automates much of the manual work involved in managing denials and appeals, allowing staff members to focus on more pressing tasks.
Denial management automation also allows staff members to quickly identify patterns in denials so that they can make data-driven decisions about how best to address them. This helps improve operational efficiency and increase denial resolution without negatively impacting the bottom line.
Contract analytics and management software
Contract analytics and management software is designed to help healthcare organizations manage their contracts with payers, vendors, and other stakeholders. This software typically includes various features to help healthcare organizations create, manage, and analyze contracts, such as document management, automated contract approval workflows, and reporting and analytics capabilities.
In the medical industry, contract analytics and management software can be particularly valuable for managing contracts with payers. Payer contracts are critical to the financial health of healthcare organizations, and managing them can be time-consuming. Contract analytics and management software can help healthcare organizations ensure that their contracts comply with regulatory requirements and identify opportunities for improvement.
Benefits of Healthcare Revenue Services
Healthcare revenue services, such as revenue cycle management outsourcing, can provide a range of benefits for healthcare organizations looking to optimize their financial performance.
One of the primary benefits of healthcare revenue services is increased collections. This means not only an increase in net collections but also an increase in upfront collections. Healthcare revenue services offer several benefits that can help you increase collections. First, they provide expert analysis of your past performance data to identify areas for improvement in your current processes.
From there, they can develop strategies that will help you optimize your workflow and streamline processes like billing and collections. This ensures that all insurance claims are submitted accurately and on time, reducing denials due to errors or omissions. Furthermore, many healthcare revenue services offer automated solutions such as e-billing which can help reduce paperwork and speed up the collection process.
Healthcare revenue services can also help healthcare organizations collect payments more quickly. Providers can get paid faster with fewer delays by taking advantage of automated solutions such as electronic funds transfers, patient portals, real-time eligibility checks, payment plans, and other technologies. This can reduce the number of days in accounts receivable, so healthcare organizations can improve their cash flow and reduce their reliance on expensive short-term financing options.
Additionally, healthcare revenue services often have access to additional resources that can track down outstanding payments due from third-party payers or delinquent patients. At the same time, they protect providers from costly compliance issues related to HIPAA regulations or other state laws governing medical billing practices.
Healthcare revenue services specialize in helping practices maximize their reimbursement rate. From claims processing to insurance verification, they are experts in navigating the complexities of medical billing and coding.
By utilizing these services, practices can ensure they're reimbursed for all of their services as quickly as possible. In addition to improving reimbursement rates, healthcare revenue services can help identify opportunities for additional sources of revenue by uncovering errors in existing bills or finding new ways to bill for certain services.
Improved staff productivity
Another benefit of using healthcare revenue services is that they can free up your staff's time by taking on some of the administrative work related to billing and RCM. This means that your staff can focus more on patient care rather than spending their days dealing with paperwork or filing claims. In addition, having an experienced team handling these tasks ensures accuracy and consistency in all aspects of RCM. This allows you to rest easy knowing that every patient's bill was handled properly — something that might otherwise be difficult when dealing with complex billing procedures on your own.
Why You Should Choose In-House Software Over Outsourcing Revenue Services
Now more than ever, healthcare providers must consider their software investments to remain competitive. According to a recent survey, 45% of providers accelerated software investment over the past year, and an additional 95% anticipate investing in the upcoming year. If you are among the healthcare professionals considering software investments, it's essential to understand the benefits of keeping your software in-house instead of outsourcing.
Data is more secure
Outsourcing services will have access to sensitive patient information and financial records, which could put patients and providers at risk for privacy breaches or malicious intent. When you keep your data in-house, you can ensure that only those with clearance have access. Furthermore, it ensures compliance with relevant standards such as HIPAA, reducing the risk of regulatory penalties.
Changes can be made faster
When you keep your software processes in-house, any changes or updates can be implemented quickly and easily since there is no need to coordinate with a middleman or wait for their response. This gives you greater control over changes and allows you to fine-tune processes as needed without relying on outside help. Plus, if you encounter any issues with your software, you can contact your support team directly instead of going through a third party.
There's more face-to-face communication
Keeping all aspects of software development and management within the office environment allows for better communication among stakeholders and quicker decision-making when needed. It also ensures that everyone involved understands how various components work together and what functions are being managed by each department. Face-to-face communication also promotes team collaboration and problem-solving, which helps ensure that every step taken toward optimization is effective and successful.
It can be more economical
In-house software can be more economical because you won't have to pay a third party for their services. You'll only have to pay for the software itself. Additionally, some outsourcing services charge a percentage of revenue recovered/collected, which can add up over time. With in-house software, you typically pay based on encounter volume levels.
The Cost of Medical Revenue Software as a Service
Investment in healthcare SaaS technology is becoming increasingly important as the demand for a more connected, accessible, and secure healthcare ecosystem keeps rising. The advantages of these solutions are clear. Dependable data protection and improved practice workflow can result in decreased costs, improved access to care, and better patient outcomes. Recent data forecasts the healthcare SaaS market to be valued at $51.7 billion by 2028, which tells us that this technology trend is only growing stronger.
The cost of medical revenue SaaS varies greatly. Small practices usually pay less than large health systems due to their smaller patient base. Patient encounter volume is one significant factor that influences pricing. The cost can depend on additional factors, such as the size and type of practice, desired features and reporting capabilities, level of customer service needed, the number of users required, and the amount of data that needs processing.
Furthermore, while many medical revenue software-as-a-service providers offer a one-time license fee model or require a large up-front payment, many others have subscription pricing plans. These are designed to allow healthcare professionals access to as much or as little functionality as they need at any given time — providing greater budget control than upfront license fees. Many services also offer custom pricing by assessing the infrastructure and requirements before releasing an accurate quote.
Automate Medical Revenue Cycle Management In-House With MD Clarity
As healthcare organizations face increasing administrative complexity and compliance requirements, many turn to in-house solutions to automate their revenue cycle management. MD Clarity's software was built specifically with these changing dynamics in mind, providing intuitive and accessible services that help streamline operations and maximize financial performance.
With MD Clarity, healthcare organizations can automate patient cost estimates, denial management, and underpayment detection. Navigating complex regulatory challenges also becomes simpler and more cost-effective. Book a demo today to learn more about how MD Clarity can help cover all your revenue cycle needs.