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It’s Time For Providers To Change Costly, Complex Administrative Processes

It’s Time for Providers to Change Costly, Complex Administrative Processes

One of the great things about the American healthcare system is the high degree of choice available to patients. Most people can choose from a variety of providers, insurance plans, treatment options, methods of payment, and so on. But too many alternatives and attributes, coupled with a lack of understanding of the process, leads to choice complexity and ultimately results in higher cost.

Providers need substantial administrative resources – often with a high price tag – to manage the many choices available in the mostly private, multi-payer system in today’s era of healthcare consumerism. It’s no small task sorting out the flood of options from health plans and maintaining absolute compliance when there is little to no consensus from insurers and public programs on standardized coding, pricing, reporting, billing, and collections.

The fact that administrative costs are a substantial portion of providers’ expenditures is nothing new, but it’s not necessarily getting better, either. Fortunately, there are ways to mitigate these costs and compliance risks – but first let’s take a closer look at the root cause of this problem.

A well-known study published in The New England Journal of Medicine in 2003 estimated that administrative costs accounted for 31% of healthcare expenditures in the U.S. Since that time, the amount of choice – and complexity – in healthcare has exponentially increased with constant changes in regulation and policy such as the Affordable Care Act, as one prominent example.

The New York Times recently reported on the high administrative costs of healthcare. The Times article explored specific portions of the health system to further illuminate the sources of some of these high-dollar administrative functions. It’s an interesting piece, despite how it seems to largely attribute what it characterizes as “astonishingly high administrative costs” that are “hidden from view” to billing rather than the entire revenue cycle.

The Times article cites a study published in the Journal of the American Medical Association in 2018 that indicates 15 percent of primary care visit revenue and 25 percent of emergency department visit revenue go toward billing. The variance in rates between specialties is not surprising. Each specialty comes with a unique set of obstacles. For example, in the ED, there is no pre-authorization, providers can’t ask for insurance up front, and there is considerable time spent determining insurance status and co-pays. In addition, many patients are under their deductible or are self-pay, increasing the administrative work required to collect revenue.

The Times quotes study co-author Kevin Schulman of Duke University as saying the high billing and insurance-related (BIR) costs were the result of the healthcare system’s complexity. However, there is a big difference between just the billing component and the revenue cycle in whole – and that is what truly represents the reason for the complexity. After all, dropping the bill at the end of all the work it took to get to that point is relatively easy, and that’s before the process of collecting has even begun.

Patients are bearing a much larger portion of the financial burden, thanks in part to the proliferation of high-deductible health plans. A 2018 report from the Kaiser Family Foundation reveals that from 2006-2016, the average out-of-pocket costs for patients rose 54%. In that same time period, patient payments toward deductibles increased 176%. This precipitous increase in patient financial responsibility has made the already challenging task of collecting from self-pay patients even more taxing on provider administration.

Choice begets complexity begets higher cost – such are the circumstances our healthcare system has given providers, with no indication things are suddenly going to get less complex. Many providers don’t have the internal administrative capacity to comprehensively manage their revenue cycle. Instead, they rely on a combination of in-house and outsourced processes awkwardly cobbled together in a disjointed series of consecutive steps.

Since the complexity of the healthcare system itself is out of providers’ control, then they would be best served directing their attention to the complexity that is IN their control – managing their own revenue cycle. The best way for providers to make any consequential change in disproportionate expenditures is by turning a critical eye toward their revenue cycle – the entire thing, soup to nuts. The first step is to conduct a thorough audit of existing administrative resources and then ask some hard questions.

Are the existing in-house resources capable of managing current and future patient volumes in a way that goes beyond the basic expectations for the business office and actually delivers financial care that matches the level of clinical care?

Do external vendor partners help streamline and integrate processes to run concurrently; e.g., both insurance and patient balances, or is that outsourcing merely adding steps that prolong the reimbursement process?

Are documentation and coding errors becoming such a common occurrence that complacency with the repercussions – patient denials and claim resubmissions – has set in?

Many providers will likely find that their resources aren’t quite answering those questions sufficiently, and that should signal it’s time for a change. MedData FastTrack is a comprehensive coding and billing solution designed as an alternate route to the traditional RCM tactics that providers struggle to manage. It leverages forward-looking technology to streamline all aspects of the reimbursement process through intelligent automation, seamless interface across all EHR systems, and intuitive reporting so providers can take data-driven action based on specific KPIs without compromising on compliance.

“Physicians and physician practices want a faster, less complicated method of medical coding and billing that helps maintain a steady stream of cash in the door,” says MedData President and COO Emily Fisher. “MedData FastTrack is a difference maker because of how it accelerates reimbursement and increases revenue in the simplest way possible for providers.”

I know MedData FastTrack can be a difference-maker for providers looking to cut down on the complexity of the healthcare revenue cycle. I’ve spent a good portion of my career in roles that bridge the clinical, technological, and business sides of healthcare; and, as a longtime practicing Emergency Medicine physician, I am acutely aware of the specific challenges that providers face in balancing all of those aspects. Contact MedData for a consultation so we can review your business and better understand your point of view.

Robert J. Wagner, MD, FACEP

Dr. Robert Wagner is the Senior Vice President of Medical Affairs at MedData. He has worked with healthcare organizations of all sizes, building consensus to integrate the revenue cycle, IT, coding, compliance, informatics, and care and utilization management to provide sound clinical, operational, and financial outcomes. Dr. Wagner is passionate about making sure patients receive excellent care – clinically and financially. He has helped multiple clients build end-to-end revenue cycle solutions, removing the challenges and ensuring patients and providers have a data-driven, compliant, and integrated financial experience.

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