Why RCM Challenges Are Draining Hospital Resources (And What to Do About It)
Revenue cycle management (RCM) is the financial engine of every hospital. It keeps cash flowing, ensures bills are paid, and funds the resources needed for optimal patient care.
However, managing the complexities of RCM is anything but straightforward. From provider enrollment delays to persistent claim denials, hospitals face obstacles that can derail efficiency, strain resources, and jeopardize financial health.
The numbers tell the story. A 2023 report revealed that claim denials alone accounted for up to 15% of uncollected revenue for healthcare providers. Workforce shortages and administrative bottlenecks have compounded these issues, leaving healthcare leaders on the search for sustainable solutions.
Here’s a closer look at four critical RCM pain points and how targeted strategies based on expert advice can make a world of difference.
1. Enrollment Bottlenecks
Provider enrollment is often where the revenue cycle hits its first roadblock. The process is anything but simple—mountains of documentation, payer-specific requirements, and shifting timelines all create unnecessary delays.
When providers can’t bill insurers promptly, hospitals face revenue losses that sometimes amount to thousands of dollars per provider every week.
But the frustration doesn’t end there. Enrollment bottlenecks strain administrative resources, disrupt provider schedules, and delay care for patients relying on insurance approvals.
Streamlining the process is essential to prevent these setbacks. Hospitals can achieve this by standardizing workflows, adopting automated tracking tools, and training staff on payer-specific requirements.
With efficient systems in place, they can avoid revenue loss and the associated negative impact on patient care.
2. Denial Management
Denied claims are a problem no hospital can afford to overlook—especially for claims made to commercial payers. Nearly 9% of claims are denied on first submission, and, alarmingly, up to 60% of returned claims are never resubmitted.
When hospitals fail to follow up on denials, they leave money on the table. Equally worrisome is the fact that the drivers of claim denials are often preventable—incorrect coding, incomplete documentation, and non-compliance with payer requirements are common culprits.
Each denied claim demands hours of follow-up from appeals to resubmissions. These inefficiencies also cost money and exacerbate the financial losses from denied claims. In essence, hospitals are choosing not to pursue money that is rightfully theirs.
There is, of course, a better way forward. Hospitals that want to tackle this issue head-on must identify the root causes and focus on prevention. Real-time claim scrubber tools catch errors before submission, while denial trend analysis helps uncover recurring problems.
3. Eligibility Verification
Eligibility verification is another step in the RCM process where hospitals often run into issues. In a recent survey of more than 350 CFOs and revenue cycle leaders, 47% said denials had increased, with eligibility errors cited as the most common driver.
Such errors tend to be driven by:
Misinterpreted insurance coverage policies.
Overlooked exclusions and limitations, and
Neglected verification of coordination of benefits (COB) processes.
These mistakes may seem minor, but their consequences are anything but.
A single overlooked coverage gap can halt a claim, create unnecessary delays, and add hours of rework for staff. Worse, it can leave patients surprised by unexpected bills—something no hospital wants.
Automated tools make this process faster and more accurate. Coverage details are validated in real-time, which reduces the risk of errors and flags potential issues before services are rendered.
4. Workforce Challenges
RCM depends on skilled professionals, but a lack of qualified staff has left hospitals unable to maintain operations.
The data puts this problem into perspective, with 25% of healthcare organizations needing 20 or more additional employees to fully staff their revenue cycle departments. These gaps not only slow down processes but also increase the risk of errors and burnout among existing staff.
To address this problem, hospitals must employ both short and long-term solutions.
Retaining staff through competitive salaries, professional development, and a supportive workplace culture can reduce turnover. But more immediate relief can be had from outsourcing key RCM functions.
External partners bring specialized expertise and can quickly fill gaps to maintain continuity.
How Radiant Can Help
Revenue cycle management can drain resources, slow processes, and create frustration, but these obstacles can be eliminated with tailored strategies and support.
Hospitals that reduce enrollment delays, manage claim denials effectively, and eliminate eligibility errors can take back control of their revenue cycle and by extension, their time.
Radiant Healthcare is here to make these tasks easier. Our latest whitepaper is packed with practical solutions to the RCM hurdles that slow hospitals down. It’s designed to help you recover revenue, improve efficiency, and focus on optimal patient care delivery.
Grab your copy now and see how Radiant can help your hospital thrive.
Ready for a real conversation about solutions? Schedule a call with Radiant COO Jacob Byrlen today. Let’s get you on the path to smoother operations and better outcomes.
References
https://ingeniousmed.com/7-revenue-cycle-management-trends-for-2024/
https://www.physicianspractice.com/view/why-getting-claims-right-first-time-cheaper-reworking-them
https://www.physicianspractice.com/view/resubmitting-claims-get-it-right-second-time
https://thessigroup.com/blog/2024-revenue-cycle-management-challenges-and-emerging-trends
