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Why Patient Engagement Is Critical To Revenue Cycle Management

Why Patient Engagement is Critical to Revenue Cycle Management

Historically, revenue cycle management has focused on maximizing insurance reimbursements, but as patient financial responsibility continues to increase, the landscape is quickly changing.

In the past five years, patient payment responsibility has risen dramatically and continues to increase with the implementation of the Affordable Care Act. More people insured means more people who don’t understand their health insurance and many of the plans on the healthcare exchanges are high deductible plans. Collecting from patients is estimated to cost up to 4 times more than collecting from payers and patient pay responsibility is projected to climb to 50% of the healthcare dollar by the end of the decade.

The New Normal: High Deductible Plans

Once considered a last-resort alternative for those with limited income, high deductible (HDP) or “catastrophic” plans have gone Fortune 500. As a result, self-pay now includes a lot of the people who have insurance with HDPs.

In fact, the effects of HDPs and the Affordable Care Act are already apparent. In just 9 months last year, the average patient responsibility volume for one of MedData’s clients nearly doubled even though their case volume only increased by 4% in that same time period. While we are helping them collect significantly higher levels than the national average, this physician group will inevitably have to write off more A/R than ever before.


ICD-10 is set to replace ICD-9 as the system to report medical diagnoses and inpatient procedures Oct. 1, 2015 when all HIPAA-covered entities are required to update their coding system. The new system increases the number of codes used from approximately 18,000 to 140,000 and based on the additions the Centers for Medicare & Medicaid Services (CMS) predicts that claim error rates will be more than double. Coding errors could induce providers to shift payment responsibility to patients if insurance doesn’t cover the diagnosis or rejects a claim.

Under ICD-10 rules, providers will be incentivized to educate patients on the details of their insurance policies, but many providers are not prepared for that reality.


The Affordable Care Act added Section 501(r) to the Internal Revenue Code that establishes criteria for non-profit hospitals to maintain their tax-exempt status. These include creating and publicizing written financial assistance policies (FAP) and making reasonable efforts to determine whether an individual is eligible before sending them to collections. That means every patient communication has remind them they may be eligible for assistance and this notification period must last at least 120 days from the date of the first post-discharge billing statement. And then the patient has 240 days to apply for assistance from this date. This requirement can drastically lengthen the revenue cycle.

The New Healthcare Consumer

Healthcare is perhaps the last major industry where the consumer does not generally have access to what they owe and how they can pay for their services. But because patients now have the power to shop for plans on healthcare exchanges, and they are paying higher premiums and more out-of-pocket, they are taking matters into their own hands.

Welcome to the age of the Healthcare Consumer.

Healthcare consumers are looking for the best value, convenience, and a better experience – an experience that meets their specific needs. Social media and other online tools are empowering patients to shop around for physicians and hospitals that not only provide the best care but also the best service. And service is more than having a good bedside manner. Service means providing frequent and transparent patient communications, especially as it relates to what they are going pay.

The first and last experiences your patients have often aren’t with your physicians and nurses – they’re with revenue cycle staff members. Patient engagement means understanding how well your organization is serving the needs of its patients. Creating a consumer-focused culture, one that emphasizes patient satisfaction over collections, can streamline your revenue cycle process and directly impact your bottom line.

Redefining the Revenue Cycle

The revenue cycle used to begin at the time of service, but with potential delays due to ICD-10 implementation or 501 (r) requirements and healthcare organizations need to be more proactive. In today’s consumer-focused environment the revenue cycle must begin before your patient ever walks in the door.

Join MedData for a HIStalk Webinar on March 31st to learn strategies for increasing patient engagement through your revenue cycle process and best practices for increasing patient collections. Sign Up Now>

Are you attending HIMSS15 in Chicago? Stop by our booth #4851 and learn how MedData can help your organization create a patient-focused and consumer-friendly plan to boost your bottom line.

Sean Biehle

Sean is Director of Creative Services for MedData, overseeing all content, design, and communications. With over 20 years of experience spanning multiple disciplines and media, Sean has helped launch several successful companies and grow business for multiple clients. He is a proud graduate of Northwestern University. Go Cats!

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