Future-proofing healthcare treasury through automation

Healthcare organizations are automating manual processes to boost efficiency and enhance revenue cycle performance. And don’t look now, but thanks to artificial intelligence (AI), more technology support is on the way.

For healthcare systems, automating revenue cycle management (RCM) processes brings with it big and often intimidating change. But failure to embrace that change —continuing to rely on manual processes in the face of growing staff attrition and increasing workloads resulting from vertical integration — represents a lost opportunity.

“In healthcare treasury, leveraging automation tools wherever possible offers an excellent future-proofing opportunity that can lower costs and improve cash application,” advises Dan Haber, a working capital consultant at U.S. Bank who serves healthcare clients.

The impact of process inefficiencies

Sticking with traditionally manual RCM processes resigns health systems to inefficiency they simply can’t afford in today’s competitive environment. This applies across three critical workstreams:

Patient receivables. “With the increasing use of high deductible health plans, more of the financial responsibility for medical costs now falls on patients,” Haber points out. “This trend makes the patient financial experience more important than ever before.

“Many providers have seen their outstanding receivables lag further out as patients often pay their medical bills last,” he says. ““Digital capabilities like Text2pay, email payment notifications and digital statements are proven options to help address this challenge.”

Inefficient collection processes can result in delayed receipt of payments, impacting cash flow and the financial condition of a healthcare organization. Additionally, manual processes can lead to higher bad-debt write-offs as patients default on payments, increased operational costs related to following up with patients about payments, an inability to track outstanding payments, and confusing or disorganized payment collection procedures that create patient dissatisfaction.

“Studies indicate that if the patient financial experience is streamlined and easy, patients are likely to pay faster,” notes Meghan Wilmes, a senior vice president in healthcare product strategy at U.S. Bank. “And automation can play an important role in improving that experience.”

Claims payment. The claims payment process challenges providers with managing receipt of payment in different formats from different payers. Providers also need to download correspondence from payers or third parties and process various types of correspondence to post payments. Slow cash application often results due to these cumbersome manual tasks, which also make reconciliation very taxing.

A lack of healthcare RCM automation can hinder organizations in many ways. “Without access to real-time and comprehensive data, organizations struggle to make informed decisions regarding their revenue cycle management strategies,” Wilmes says. “A lack of visibility also makes it challenging to identify bottlenecks and inefficiencies in the revenue cycle process, hindering optimization efforts.”

Without timely and accurate reporting, Wilmes says, tracking key performance indicators (KPIs) becomes difficult, and resolving issues related to claims, denials or payment collections can be prolonged, leading to financial losses. “Inadequate reporting may lead to noncompliance with regulatory requirements and expose the organization to legal and financial risks,” she adds.

Patient refunds. Patient refunds involve an often check-heavy process that can be made much more efficient through automation.

By reducing the volume of checks issued, a provider can mitigate check fraud risk, reduce costs associated with issuing and mailing checks, reassign accounts payable staff to other duties, and cut down on escheatment tasks. Plus, patients would get their refunds faster and wouldn’t have to spend time depositing a check, which improves their financial experience.

“The patient financial experience is increasingly important, and offering a user-friendly, convenient patient financial experience is critical,” Haber says.

Automation you can employ today

Healthcare organizations can automate and add efficiency to these workstreams. Here are some additional areas where RCM automation is making a significant difference for healthcare organizations across the many steps of the revenue cycle:

Patient registration. With online scheduling, patient responses can be entered into a registration questionnaire and audited automatically. Today’s technology can identify any problems with the responses and notify the patient — plus review the patient’s coverage and verify eligibility — all in real time.

Coding. Machine learning, algorithms and bots can analyze clinical documents and assign the correct medical codes, reducing manual coding errors that can lead to claim denials and delays.

Automated correspondence routing. In the healthcare revenue cycle, correspondence can include everything from refund requests and eligibility notices to provider disputes and bankruptcy notices. Automation allows diverse types of documents to be routed to different work queues based on how the healthcare organization processes correspondence.

“Correspondence is generally communication about additional steps needed to process a claim,” Wilmes explains. “The faster this correspondence is worked, the quicker the healthcare organization can receive payment. Rather than receiving a pile of paper correspondence, you can load correspondence into a web portal that provides the capability to work the correspondence electronically and route items to a user for appropriate tasks.”

Reconciliation. Banks offer claims payment reconcilement solutions that simplify the revenue cycle by automating remittance management. Using these automated solutions, healthcare providers can receive, post and reconcile all payments and remittances from payers electronically. The solutions can incorporate paper checks and remittances as well as electronic remittance advices (ERAs), convert everything to digital 835 files, and automate posting and reconcilement.

Digital refunds. A growing number of banks now offer an electronic disbursement platform with a digital payments menu that allows providers to give their patients a choice about how they will receive their refund payments, including through various electronic payment methods. Typical options include an Automated Clearing House (ACH) payment to their bank account, a real-time payment such as a Zelle^® or RTP^®, push-to-card or a prepaid card.

“Refunds to the original method of payment is optimal. When that is not possible, most organizations rely on checks,” Haber says. “With these digital options, healthcare organizations can reduce inhouse check processing and escheatment, creating more bandwidth for staff to tackle other essential tasks.”

The promise of AI

Artificial intelligence already supports RCM automation in areas such as coding and automated correspondent routing, where machine learning is used to make fast decisions. Haber expects AI to continue ushering in healthcare treasury efficiency for tasks such as drafting claims denial appeal letters. He also sees a future in which AI will make other manual tasks more efficient, such as reconciliation and addressing recoupment requests.

In a typical recoupment request, a payer informs a provider that the provider has been overpaid on a claim and asks for the return of a specific dollar amount. “In a traditional manual environment, the provider organization must spend extensive time and effort researching and validating that request. It’s so cumbersome,” Haber says. “But AI tools have the potential to help that effort.

“The use of AI in revenue cycle management is in its early stages but holds a lot of promise,” he notes. “In the meantime, there are plenty of other RCM automation tools that organizations can leverage right now.”

Embracing change

Anytime a healthcare organization takes the leap of introducing a new tool or technology platform, there are challenges, Haber says. “Things can go awry with implementation, with the integration with other platforms, potentially causing a disruption in work flows.”

Most healthcare organizations’ limited technology resources are dedicated to operations. “They don’t have a lot of bandwidth or resources to make the shift to more automation, or they fear the new tools will present more manual tasks of their own,” he says.

Staffing shortages, due to both a lack of qualified candidates and rising levels of turnover within the industry, add to the challenges of introducing automation to RCM in healthcare.

“Programmers, process engineers and day-to-day revenue cycle management staff are often tied up with current daily tasks,” Wilmes explains. “There might also be competing challenges, like maintaining operations during a crisis such as COVID, implementation of new electronic medical records [EMR] software, and budgeting concerns due to inflation and rising expenses.”

But embracing these challenges is worthwhile and can bring much needed efficiency to the healthcare RCM process, both Haber and Wilmes agree.

“With staffing constraints and high levels of attrition, the cavalry isn’t coming,” Haber says, adding that “organizations need to look for ways to reduce manual tasks so they can better prepare for the future needs of healthcare treasury management.”

How do provider organizations overcome the potential obstacles to automating RCM in healthcare highlighted here? Wilmes says the key is educating senior leaders about the benefits and getting them to commit to automation. “There needs to be a long-term strategy, and leadership must be on board with automation efforts.”