How Revenue Cycle Management Became an Important Career
In an interview, revenue cycle management expert Brian Sanderson explained why the role has become an important discipline.
- This is Part 1 of an exclusive interview. For Part 2, click here.
The importance of managing the proper revenue cycle system has grown significantly over the last few years. It has now become a discipline that requires trained professionals to fill it successfully.
In an interview with RevCycleIntelligence.com, Brian Sanderson, the managing principal of Crowe Horwath healthcare services group, spoke about how the healthcare revenue cycle has evolved and why this sector is now a career. According to Sanderson, the healthcare revenue cycle had a turning point 15 to 20 years ago.
“The concept of revenue cycle operations was a little bit foreign before that,” Sanderson said. “There was billing and there was collections and the people that lived and worked in that environment knew some of the challenges that they faced on a day-in-day-out basis but it was more transaction based. They had their share of headaches but the patient liability portion of that was not very significant. It was more about ensuring that we are getting things out the door.”
However, this started to change as managed care became more aggressive in contracting and started to strategically leverage organizations against each other, causing margins to tighten. This caused organizations to start looking for opportunities and challenges that can be converted to improve the revenue cycle.
One of the most “groundbreaking” turn of events for hospital revenue cycle operations happened 20 years ago when an academic health system was the first to fully combine its physician and hospital revenue cycles. This move solidified the fact that revenue cycle had become a discipline or career that could be focused on and was no longer a step brother to basic finance.
The hurdle now becomes an attempt at organization and understanding how to put all these pieces together and have it operate in a no defects environment. These are things like denials, bad debt, small balances and underpayments.
“This is happening at a time when we are starting to wonder who is responsible for this, not just the physician revenue cycle,” Sanderson said. “This brings things together as a system and include other ancillary business in there. Its a flashpoint of a bunch of things coming together to take on more of a manufacturing oriented mindset.”
However, this discipline has created new challenges. According to Sanderson, the most noticeable is a growing divide between the clinical side and the financial side of hospital and physician operations.
“Now, revenue cycle is a career. It used to be some guys in finance,” Sanderson said. “What’s happening is the clinical people are saying, ‘OK, tell you what, we’ll save lives if you guys collect the money.’ The problem is the same people that are saving lives still have to make notations in the medical records that drive what they are going to collect. We still find an enormous amount of revenue on a charge capture basis of services that they are providing but not billing for or not billing significantly for.”
Without someone that understands both worlds, hospitals are leaving money on the table. While some will blame insurance companies or the government for their revenue stagnation, Sanderson said that in a majority of cases, hospitals are just not doing it right.
