As our list of the top 5 challenges for 2016 underlines, practices will need to navigate some tough obstacles in 2016. These include value based reimbursement, collecting co-pays and deductibles, and administrative burdens on physicians.
Few industries are experiencing as many changes as healthcare - an industry where reimbursement is far from straightforward. And yet physician practices and other medical facilities are expected to accommodate these changes while providing patients with as much of a "business as usual" experience as possible.
So what's in store for 2016? While there are no signs for major changes, there are some significant challenges that your medical practice needs to prepare for. Here are the top 5 challenges you can expect in terms of revenue cycle management in 2016.
1. Keeping up with payer requirements
Having software to spell out current payer requirements isn't just nice to have - it's essential. Insurance plans change their requirements frequently, and you're expected to keep up with them at all times or risk rejected claims.
Physicians find themselves under constant pressure to get paid for the work they do. “It used to be that physicians made enough money that they could let a lot of things slide. The margin is so much thinner now. You do have to micromanage the money. No one taught us to do that.” Cindy Ackrill (Follow her on Twitter)
Part of your effort to getting paid for the services you provide is keeping up with payer requirements. Your practice needs to have an effective denial management strategy in place for 2016 and beyond. If there is an unexpected uptick in denials and rejections, taking the time to assess what's going on and see if there are trends is important.
You may find, for example, that claims with one particular insurer are rejected more often. Or you may find that a particular diagnosis code leads to more rejections. A simple change in insurer requirements that goes unnoticed could be responsible for an increase in rejected claims, and uncovering that reason can help you quickly and substantially increase your clean claims rate.
2. Value-Based Reimbursement
The shift away from fee-for-service reimbursement and toward value-based reimbursement is occurring, albeit slowly. But that doesn't mean you can ignore it. In fact, the healthcare providers that make the effort to learn about value-based reimbursement and plan for incorporating it into their practice are the ones that will experience the greatest long-term success.
According to the results of Managed Healthcare Executive's 2015 State of the Industry Survey 81% of survey respondents said they have started shifting operations toward value. While most respondents said their organization has at least started shifting its operations toward value, nearly one out of every five said they have not yet started transitioning and are "waiting to see what works for other organizations."
Of the 81% of survey respondents who said they have started shifting operations toward value:
35% said they have started a few initiatives in this area;
23% said they have started many initiatives; and
23% said most of their business/operations is focused on value.
The survey findings, based on more than 600 responses from executives at health systems, health plans, pharmacy benefit organizations, and more, show the biggest challenges today and in the year ahead.
For providers gearing up to participate in a value-based reimbursement initiative, Connolly advises to focus closely on efficiency. "... For some period of time, the alternative payments may in fact generate less revenue, so you've got to be prepared as an organization for that initial financial squeeze," she says. It's also critical to remember that physicians who are accustomed to operating in a fee-for-service world are going to have to do their jobs very differently and rely much more on a coordinated approach to care that includes nurse practitioners, pharmacists, data experts, and so on, says Connolly.
3. Collecting co-Pays and deductibles
Collecting on co-pays and deductibles has always been a challenge for physicians. The new plans created under the Affordable Care Act (ACA) have added to that burden in 2015 and we will also see this as a challenge to getting paid in 2016.
Many ACA plans have higher deductibles and co-pays than existing commercial plans. As a result, those plans could increase the provider collection burden as more patients purchase and use them.
How do you avoid getting stuck with unpaid bills?
Verifying patient eligibility at each visit may seem like overkill, but it really isn't. Not only are more people buying insurance through state and federal health insurance exchanges, they're switching plans from year to year. They may change plans during the year as well, if, for example, a spouse takes on a new job with better insurance benefits. Outstanding revenue cycle management software can help you streamline this process.
Physicians should also collect co-payments at the time of service. Patients are responsible for an increasingly large proportion of their medical bills, so what you collect at the point of service can have a tremendous effect on your overall revenues.
Many practices find greater success if they collect co-payments when the patient signs in, rather than waiting until after the visit. If a patient leaves without having made a copayment, your chances of collecting it at all drop significantly.
Your practice should also consider offering various payment options. These should include online and mobile payment processing, as well as automated and recurring payement plans that collect from a debit or credit card or directly from the patient's bank account.
4. Administrative burdens
Physicians are spending a significant amount of time on administrative tasks. In the Practice Profitability Index, almost two-thirds of physicians (64%) spend a day or more per week on administrative tasks. While this has declined from 71% last year, physicians are still wasting time on admin tasks when it could be focused on patients.
Medical Economics reports that this trend is eroding physicians’ on-the-job happiness. “The physicians I know truly enjoy spending time with patients and teaching, and anything that takes them away from that is a negative,” says Henry Borkowski, MD.
Physicians are spending a significant amount of time on EHR implementation/operations and keeping up with industry changes like ICD-10 or the changing incentive programs. However, when it comes to the main source of administrative drain on physicians, prior authorizations seem to be taking up the most time.
Photo credit: Medical Economics
“Obviously, if you’re in front of a computer and have all these different mandates of quality and ICD-10, you’re going to see fewer patients and have less financial return,” Murphy says. “That’s what’s driving a lot of physicians to sell their practice. On average, you’re seeing 25% sustained productivity losses around the country. That makes it hard to keep a practice open and hard to give your staff raises” (Medical Economics, 2015).
5. Industry Consolidation
Industry consolidation in healthcare picked up in 2015, and it affects a large number of providers. Whether your particular practice is part of industry consolidation or not, chances are good that at least one organization with which you interact is part of industry consolidation. One hospital you refer patients to may be absorbed by a larger hospital system, for example. Make sure your revenue cycle management software is able to interact with the entities you expect it to when mergers and acquisitions take place.
The transition to ICD-10 may be behind us, but plenty of challenges remain ahead in 2016. Your practice's revenue cycle management will face just as many disparate influences in the coming year as it ever has, and your ability to understand and cope with these influences will affect your success.
Some coping strategies are relatively straightforward, such as verifying patient eligibility and collecting copayments up front. Others, like the shift to value-based reimbursement, will require a more concerted effort to stay on top of in the coming year.
GroupOne Health Source invites you to contact us for a free revenue cycle management demo. We're ready to help you meet the many challenges the future of healthcare brings.