From Head in the Clouds to On the Ground Cloud-Based Revenue Cycle Management

September 06, 2022 - If you suggested moving healthcare data to the cloud a couple of years ago, healthcare leaders would have told you to get your head out of the clouds. Now, that is precisely where cloud-based health IT systems are being deployed: on the ground in hospitals and practices, especially in their revenue cycle management departments.

Cloud-based health IT systems are trending right now. Over three-quarters of healthcare organizations are already deploying some cloud computing, according to BDO’s 2021 Healthcare Digital Transformation Survey. Another 20 percent also plan to deploy cloud computing. Not to mention, a leader in cloud-based technology offerings, Oracle has bought EHR and revenue cycle management heavy-hitter Cerner in a $28.3 billion deal slated to close later this year.

Healthcare leaders are overcoming their concerns with cloud-based health IT systems. Healthcare has held out on adopting cloud-based technologies over healthcare security concerns since providers are legally and ethically bound to protect patient health information. Being a heavily regulated industry, HIPAA compliance has also been a top reason for healthcare lagging with cloud technology adoption.

Increasingly healthcare has warmed to cloud-based solutions, leveraging the technology to tap into and store large amounts of data providers need to use every day to deliver high-quality patient care. But a new use case for cloud-based health IT is forming—if it has not already been established.

Cloud-based technologies have the potential to solve one of healthcare’s biggest challenges: administration.

Administrative costs attributable to the US healthcare system are astronomical compared to other developed countries. Take billing an inpatient surgical procedure: What takes $6 in Canada costs $215 in the US. Researchers who uncovered that statistic also discovered that the primary reason healthcare administration is so expensive in the US is the cost of coding. Each payer in the US has its own set of rules for submitting a claim, meaning revenue cycle management teams must know each payer’s specific documentation and submission requirements to create a clean claim.

More provider organizations are tapping health IT companies to implement cloud-based revenue cycle management technologies to overcome the complexity of healthcare administration.

Addressing the whole revenue cycle

Revenue cycle management is ripe for innovation. The process of tracking healthcare revenue is highly complex and often manual. Moreover, the revenue cycle is split into several parts—front, middle, and back—which do not always work together to get clean claims out the door.

Automation has been key to overcoming the challenges of revenue cycle management. Healthcare organizations have invested in revenue cycle management solutions to solve inefficiencies from patient scheduling to account resolution, and many solutions have achieved what they are meant to do. For example, claims denial management solutions have helped to reduce claim denial rates for providers. And patient scheduling and eligibility tools have made it easier for organizations to capture accurate demographic and insurance information before erroneous data ends up on a claim.

These standalone or bolt-on solutions have led to measurable improvements. However, providers still face challenges with revenue cycle management innovation largely because of these fragmented technologies and a lack of an enterprise solution.

An enterprise approach to revenue cycle management has not been fully realized quite yet, according to market research firm KLAS. However, more providers are heading down that path as advanced users of revenue cycle management vendors report greater satisfaction with their top vendors and better value compared to users with ad hoc revenue cycle management technology.

“More and more of our clients are recognizing that there’s a correlation and correlative benefit if you have, say insurance eligibility and coverage detection working side by side,” explains Matthew Hawkins, CEO and board member of Waystar, one of the vendors whose advanced users participated in the KLAS report.

“Then, if you couple those capabilities with a prior authorization product and the claims management solution, then you get the benefits. I could say the same thing for the denial and appeal management solution that automates what happens when a claim is denied,” Hawkins says.

With cloud-based technology, vendors can turn on different capabilities and products for clients wanting more solutions for other aspects of revenue cycle management. They do not have to go through full implementation of a new platform that requires physical space for things like data access and storage.

Cloud-based technology may be bringing healthcare closer to realizing enterprise revenue cycle management.

“Cloud technology can essentially break down the silos, literally and figuratively, within an organization so that we can help them become more efficient and transparent,” says Gary Long, executive vice present and chief commercial officer at R1 RCM.

Long maintains that healthcare needs to think about revenue cycle management differently than providers have in the past.

“Generally speaking, there is a fatigue with the old way of doing it, which is working in a vacuum with a vendor for a given part of the revenue cycle to address only a functional piece of the problem in isolation, not the entirety of the revenue cycle,” Long states. “They have to think about this in a holistic fashion.”

R1 RCM recently acquired cloud-based healthcare revenue company Cloudmed to further its digital transformation of the revenue cycle. Cloudmed specialized in healthcare revenue intelligence solutions that used cloud-based data architecture to automate the analysis of large volumes of medical records, payment data, and other sources of information.

Cloud-based capabilities would allow R1 RCM to scale end-to-end revenue cycle management and technology-driven revenue intelligence, the company said in a statement.

A single source of truth

Healthcare has been hearing about a single source of truth for years. When data lives in one place, providers can feed information into their IT systems to streamline clinical, financial, and operational processes. This single source of truth seems to be the holy grail to better, more efficient healthcare.

However, disparate health IT systems often cannot talk to one another. That is especially true in the revenue cycle, where IT systems and even staff may not be able to communicate effectively between front, middle, and back-end processes.

Many healthcare organizations also still hold their own data on-premise to ensure data security. This has made the quest for a single source of truth just difficult as finding the real holy grail, until cloud-based technology.

With cloud technology, healthcare organizations use remote servers to store, manage, and process data. They can access the data through the internet rather than relying on on-site data services or hosting data on their devices.

“If you have a single database and you build your cloud-based technology on that single database and then deploy it to many locations, then you get all sorts of data efficiencies. You are able to draw insights from that data to improve the way clinical care occurs, to improve the way you administer healthcare,” Hawkins says. “And you're able to achieve that in HIPAA compliant, highly secure way.”

The cloud also enables healthcare organizaitons to tap into more of their data. Hosting data on computers or storing the data in data centers limits the size of the dataset providers can use because their physical storage containers have limits. In contrast, cloud storage is scalable, which has made it an attractive option for healthcare in the age of EHRs.

This single source of truth feeding health IT systems, including revenue cycle and practice management platforms, has perhaps never been so important, too.

Healthcare organizations are rapidly growing, acquiring new providers, practices, and even other health systems to leverage economies of scale in an increasingly coordinated healthcare system. In fact, nearly three-quarters of physicians are now employed by hospitals, health systems, and other corporate entities because of acquisitions. Additionally, the top ten largest health systems control about a quarter market share because of consolidation.

“This creates a very heterogeneous environment when physicians or physician networks join hospitals that also work with laboratories, post-acute care groups, and maybe surgical centers,” Hawkins explains. “Think about how complex it has been to administer software that can talk to each other across all those various workplaces and environments.”

“A lot of that complexity can be resolved very elegantly with cloud-based technology,” Hawkins asserts.

With cloud-based revenue cycle management technology, a single source of truth lives in a secure, off-premise location that can feed into the systems used by every provider within a health system. This means that revenue cycle management technology may be able to tap into EHR data to give anyone within an organization a more complete picture of a patient. It also means revenue cycle management technology users can leverage the know-how from other organizations.

Revenue cycle management vendors like R1 RCM and Waystar serve hundreds to thousands of healthcare providers. When a company has data from that many providers, it can leverage the cloud to create a single source of truth even outside of one health system.

Rules engines have been popular in revenue cycle management because the technology can automate claims management to improve clean claim rates. The technology uses the rules each payer has for submitting a claim and applies those to the bills providers create through their systems. A cloud-based rules engine can take it a step further because vendors can tap into the data they are analyzing for all of their clients to update their technology with the latest rules and requirements.

“Say a provider organization notices, for example, that one of their payers has updated a claim rule or perhaps requires a certain field or they want additional information for a specific service. They can share that with us and we can curate and validate that that change has occurred and update our rules engine immediately,” Hawkins states. “We can then deploy it to our whole network of customers for their immediate benefit.”

Not just for the integrated health system

Cloud-based revenue cycle management technology may be well positioned to improve operations and increase efficiencies for large, integrated health systems. However, certain aspects of the cloud also make it ideal for even the smallest of practices.

“That primary care practice with 10 providers and perhaps a billing coordinator, a practice manager, and maybe a part-time IT resource, they can deploy cloud technology and have that simply administered,” Hawkins says. “It saves a lot of technology headache and downtime.”

The primary benefit of cloud-based revenue cycle management technology is that it can be implemented, configured, and used with relative ease across a variety of settings.

There are major savings attached to this type of technology implementation. Healthcare organizations do not need to invest in physical data storage, which comes with many fixed costs. Organizations can also right-size their data storage needs as they go since cloud-based technology is more flexible and does not require any rearranging of physical space.

Cloud-based technology also generally needs fewer feet on the ground when it comes to IT resources.

“If you do it right, you can get very fast updates and consistent innovation to the cloud software,” Hawkins explains, comparing cloud-based revenue cycle management technology updates to those people get on their smartphones.

“If you have a smartphone, you can go in and download the latest update to applications and it takes seconds,” he elaborates. “Those application creators are delivering consistent updates to their application on your smartphone.”

Leveraging the cloud for revenue cycle management allows for scalable, flexible, integrated platforms, which is why R1 RCM acquired Cloudmed, Long also says.

“It allows us to address an organization’s needs no matter where they are on their journey with transforming revenue cycle operations,” he explains.

For healthcare organizations of all sizes, the cloud-based platform also addresses the industry-wide problem of labor shortages. The “Great Resignation”—a term people have used to describe the high levels of turnover in 2021—has hit healthcare particularly hard, with more employees have left the field after high levels of burnout during the COVID-19 pandemic. Providers are now having trouble filling revenue cycle positions with qualified individuals, even for entry-level roles.

Automation has been key to bridging the gaps, allowing providers to turn over certain tasks, such as scrubbing claims and following up with payers on claims status, to machines when appropriate. However, cloud-based technology has been especially helpful in the new hybrid work environment.

Many providers had their administrative staff work remotely during the pandemic. However, shifting to a remote work environment when revenue cycle management technology relies on on-premise data centers or workstation computers can be a challenge. Cloud-based technology enabled staff to access the systems and data they needed to complete their tasks when out of the office.

The shift in work environment may be permanent for some organizations as staff demand a more remote or at least hybrid environment. This trend could be a catalyst for greater cloud adoption.

The future of cloud-based revenue cycle management

Healthcare organizations are moving more and more of their data to the cloud and revenue cycle is no exception. Providers are seeing the benefits of more flexible technology solutions in light of major trends in healthcare—mergers and acquisitions, remote work for administrative staff, and tighter margins, to name a few.

However, there is still a lot more opportunity for lifting revenue cycle management to the cloud. Providers must overcome data security and HIPAA compliance concerns when it comes to adopting cloud-based technology. Infrastructure challenges, such as planned and unplanned downtimes, can also hinder some providers from moving their billing to the cloud.

Regardless, revenue cycle management technology vendors are envisioning a bright future for cloud technology.

“It’s a phenomenal time to be in healthcare and we’ve never had more technological capabilities than we do right now,” Hawkins asserts. Not only has cloud-based revenue cycle management technology given providers of all sizes the scale and flexibility, but it has also enabled further innovation for medical billing, including artificial intelligence.

“One of the beautiful things about when you deploy cloud technology is you can also begin to deploy artificial intelligence and machine learning for common tasks being done in or around the technology,” Hawkins explains.

Artificial intelligence works best when the algorithms have access to large, clean datasets. Cloud-based revenue cycle management technology can facilitate that. However, providers will need to ensure they have complete, accurate data in order to get the best results, such as a higher clean claim rate. Interoperability between IT systems is also a barrier to funneling the data to innovative revenue cycle management technologies.

Despite challenges still on the horizon, there is still plenty of opportunity for cloud-based revenue cycle management technology.

“We can give caregivers and providers more time back in their day to care for patients,” Hawkins says. “They can spend less time trying to figure out how they’re going to get paid for the services that they are rendering and that’s a great thing for patients.”