Key Types of Revenue Cycle Technology That Optimize Operations
Revenue cycle technology takes many shapes and sizes depending on a provider’s need, but the tools have become essential to smooth revenue cycle operations.
Source: Getty Images
- The healthcare revenue cycle is a sprawling operation that encompasses patient registration and insurance verification to denials management and patient collections. Provider organizations of all sizes have leveraged revenue cycle management technology to keep operations running smoothly and efficiently.
There is a wide range of technologies that providers use to streamline different parts of the revenue cycle. And providers tend to use several of these technologies as part of their revenue cycle management strategy. A recent survey of healthcare finance leaders found that about 30 percent of organizations use two or more vendors to automate the revenue cycle, while 38 percent use one vendor for all automation steps and 31 percent have an internal team to fully manage revenue cycle automation.
But provider adoption of revenue cycle management technology is not done. MarketsandMarkets projects the global revenue cycle management market to reach $84.1 billion by 2028 as healthcare organizations accelerate technology adoption after the COVID-19 pandemic.
“Newly developed RCM solutions help streamline workflows, enhance data accuracy, improve compliance, and provide a better overall experience for healthcare providers and patients,” the market research firm says. “Furthermore, these RCM solutions offer real-time insights, enable seamless data exchange, support interoperability, and reduce costs for managing multiple standalone systems.”
Providers have and continue to invest in a variety of revenue cycle management technologies, whether from one vendor or multiple. Below are some of the most common types of revenue cycle management technologies providers use to optimize operations.
Practice management systems
A practice management system, or PMS, supports the administrative and billing tasks of a healthcare practice. According to the American Medical Association (AMA), those tasks include capturing patient demographics, scheduling appointments, preregistering patients (including insurance eligibility and benefit verification), calculating patient financial responsibility for point-of-care collections, maintaining payer lists, generating reports, and billing.
PMS software helps to increase the efficiency of day-to-day operations for providers, contributing to the success of the revenue cycle and the organization as a whole. A PMS can automate a variety of workflows, as well as facilitate communication among staff.
For revenue cycle success, PMS software should integrate and coordinate with RCM workflows to maximize provider revenue. A PMS can generate patient bills and insurance claims using its data sources, after which the RCM system can take over to ensure claims are submitted properly and promptly.
MarketsandMarkets reports the systems can be standalone solutions or integrated, mostly commonly with an EHR system. Providers can also choose from on-premises, web-based, and cloud-based systems, with cloud-based options growing in popularity based on projected segment growth over the next couple of years.
Patient accounting systems
Patient accounting systems manage the financial aspects of patient care, from billing and invoicing and claims management to payment processing and patient statements. Sometimes called a PAS, a patient accounting system is separate from a practice management system because it is more aligned with revenue cycle management goals and focuses on each individual patient to generate claims and bills. A PMS has a broader focus on various administrative and operational tasks.
Patient accounting systems are typically deployed by a provider’s EHR vendor, with the most common being Epic, Oracle Health (formally Cerner), and MEDITECH. Although, other vendors offer PAS software that often integrates with a provider’s EHR system. EHR integration helps to synchronize clinical and administrative data for claims and patient billing.
The patient accounting system is crucial to revenue cycle management because the solution processes reimbursements and patient payments. A patient accounting system also automates billing and claims processes to streamline revenue cycle management. Additionally, the system can increase the transparency of the patient financial experience through automation and reports.
Claims management and clearinghouses
According to KLAS, claims management and clearinghouse solutions refer to software tools that help providers manage claims and submit them to payers.
A claims management system or software automates claims workflows from initial claim creation to final payment or resolution. The tool typically supports claims adjudication, status tracking, denial management, and reporting and analytics. Providers use claims management technology to maximize clean claims rates and minimize claim denials or delays.
A clearinghouse is a third-party entity that facilitates the electronic exchange of information, particularly billing and administrative data. For claims management, clearinghouses typically submit claims to payers on behalf of providers after they have validated and scrubbed the claims to ensure compliance and accuracy. Clearinghouses also adjudicate and provide claim status and reporting. Providers use a clearinghouse to expedite processing claims and other administrative transactions, streamline claims submission to multiple payer partners, and access enhanced reporting on claim trends.
The claims management system and clearinghouse market is fragmented, with many key players.
Patient eligibility verification solutions
Providers can use tools and software to verify a patient’s insurance coverage and eligibility for medical services using technology. These aptly-called patient eligibility verification systems can deliver real-time verification of coverage status before or during patient registration while giving providers more detailed information about a patient’s insurance benefit.
Patient eligibility verification systems are key to achieving the revenue cycle’s goal of maximizing reimbursement. Using the systems, providers can ensure insurance will pay for specific medical services before an encounter happens, and if not, providers can communicate payment options to patients. Some systems can even provide patient financial responsibility estimates.
Additionally, some patient eligibility verification systems can detect primary and secondary coverage for certain patients by searching private and public payers for eligibility. This capability is often referred to as insurance discovery.
Like many segments of the revenue cycle technology market, many vendors offer patient eligibility verification solutions, as well as outsourcing services. Vendors aim to prevent denials, reduce underpayments, and minimize bad debt for providers.
Revenue cycle analytics
Revenue cycle analytics solutions are business intelligence tools that tap into financial data to determine revenue cycle performance and efficiency. The solutions analyze data related to billing, claims, collections, and reimbursement to identify trends and areas for improvement.
Revenue cycle analytics solutions are key to measuring and tracking key performance indicators (KPIs). Providers should establish revenue cycle KPIs to elevate financial performance and work on areas that need improvement. Revenue cycle analytics solutions help to collect and analyze the data for the KPIs so providers can understand performance.
Data collection, clean-up, and analytics can be costly and time-consuming for providers, which is why many choose a technology or software tool to get insights faster. Many providers also do not have the internal resources to perform advanced analytics.
The solutions can be standalone tools, while some vendors offer revenue cycle analytics as part of their overall revenue cycle management platforms.
Patient payment solutions
Patient financial responsibility is on the rise. The average annual deductible for patients with employer-sponsored health insurance is over $1,700, representing a 61 percent increase since 2021, according to KFF’s latest “Employer Health Benefits Survey.”
Rising patient financial responsibility challenges providers who have traditionally relied on payers to cover the bulk of medical bills. But as patients owe more for their care, providers are investing in patient payment solutions to collect what is owed in an easy and convenient way for their patients.
Patient payment solutions include online payment portals, point-of-service collection tools, automated payment plans, mobile payment options, and cost estimation tools. The solutions may also have patient engagement and communication capabilities, such s payment reminders and statements.
Providers leveraging patient payment solutions have realized improvements in self-pay collections, point-of-service collections, and overall patient satisfaction.
Compliance and auditing software
Compliance and auditing software ensures providers adhere to coding and billing rules and regulations. The solutions identify potential compliance risks and issues within the revenue cycle that can lead to claim denials, reimbursement delays, and even healthcare fraud allegations. Solution capabilities include audit trail and documentation, claims and coding accuracy assessment, compliance monitoring, fraud detection and prevention, charge capture validation, and internal auditing.
Providers should leverage compliance and auditing technologies as part of their revenue cycle management strategy to mitigate financial risks, especially with an evolving regulatory landscape. The tools can also increase organizational transparency, boosting payment integrity and accountability.
Revenue cycle technology takes many shapes and sizes. Providers use these technologies—whether they are standalone systems or part of an end-to-end solution—to streamline the multitude of tasks they must complete to get paid for patient care.
