We’re all very much aware — some might feel painfully aware — that payer models are transitioning us away from fee-for-service to a new era in which reimbursement is based on outcomes and provided value. As a result of that transition, effective revenue cycle management (RCM) in the near future will bear little resemblance to traditional billing practices.
That’s because traditional billing is rooted in the fee-for-service model in which information, originally paper-based, advanced directly from the point of care to the back office. Doctors saw patients and made records of procedures. Those records went to the back office for coding and the preparation of bills for services rendered. Billing volume corresponded to clinical transaction volume.
While simple, that method of revenue cycle management had plenty of challenges, most of them resulting when patient information collection and clinical care separated from billing and from the manual processes that linked them — error-inducing workflow that contributed to claim delays and denials. Even as practices moved toward the electronification of patient data by adopting electronic health record systems, there was typically no automated flow of information between a practice’s EHR and RCM systems to address these issues.
That situation began a course correction recently with a new generation of integrated EHR/RCM solutions that deliver more accurate information to the payer for faster, cleaner claims and fewer denials. As consumers take on a larger share of payment responsibilities, EHR/RCM integration has also made it possible to minimize “sticker shock” and improve patient satisfaction by identifying patient financial responsibilities at check-in.
Those advantages in leveraging data flow are just the start, and the move toward clinically driven RCM — in which data captured electronically at the point of clinical decision-making drives revenue cycle management — will provide a solid foundation to accommodate the new payer reimbursement models. Before that can happen, practices will need to move beyond older RCM approaches that merely document services and then assign fees to those services.
Identifying and closing care gaps, managing a patient population within a shared-risk program and contributing to improved care delivery within a region are major initiatives that shift the emphasis from clinical transactions toward population health. Participating in revenue streams associated with that shift will require a broad emphasis on clinically driven RCM. For example, systems will need to identify diabetics who haven’t been in for a foot exam as well as those who have. Practices must also engage patients with monitoring and reminders outside of office visits, and translate that activity into the revenue cycle by effectively managing consumer populations as never before.
The reason is simple: Future revenue streams will reward physicians in part for healthy patients who do not have to come in for frequent treatment along with those who do, as financial performance becomes increasingly tied to the health of the population of healthcare consumers the provider serves.
While it remains to be seen precisely which of the new payer models will eventually dominate in the move away from fee-for-service billing, all emerging models point the way toward rendering traditional billing approaches ineffective. Practices at the forefront of clinically driven RCM today are not only reaping benefits in immediate improvements to billing and patient satisfaction; they are also among those that are best prepared for the new era in value-based reimbursements.